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Shell releases new 'Sky' Scenario for the Clean Energy Transition

Shell has released a third ‘Sky’ Scenario, in addition to their two ‘Mountains’ and ‘Oceans’ scenarios. The Sky Scenario illustrates a technically possible, but challenging pathway for society to achieve the goals of the Paris Agreement. Sky builds on previous Shell scenarios publications and is their most optimistic scenario in terms of climate outcomes.

The Sky scenario reveals the potential for an energy system to emerge that brings modern energy to all in the world, without delivering a climate legacy that society cannot readily adapt to. The new Sky scenario includes important messages about hydrogen transport and the potential role of cities in delivering this transformation:

  • Success: New energy systems emerge. Onshore and offshore hydrogen electrolysis systems also begin to emerge around the world in Sky. Initially, they make use of the growing off-peak surplus of electricity from renewable sources, but later become fully integrated base-load systems. As a result, after 2040, hydrogen emerges as a material energy carrier, steadily growing to account for 10% of global final energy consumption by the end of century. As oil and gas use falls over time in Sky, redundant facilities are repurposed for hydrogen gas storage and transport. An immense build-out of electricity networks and hydrogen pipelines ensures secure and affordable electricity and hydrogen supply, which stimulates switching across sectors, particularly in transport and industry.

  • Success: Governments step up the pace. In Sky, governments around the world implement legislative frameworks to drive efficiency and rapidly reduce CO2 emissions, both through forcing out older energy technologies and through promoting competition to deploy new technologies as they reach cost effectiveness. For example, at the national and sub-national level, governments speed up the energy transition by adapting power markets to new renewable technologies and putting a meaningful price or constraint on carbon emissions from conventional thermal generation. Legislation in many jurisdictions forces grids towards100% renewable energy by the 2040s.Appliances, commercial and residential buildings, and personal transport are all targeted with aggressive efficiency or emission standards. The creation of low-emission zones by city authorities forces older vehicles off the road.

  • A successful transport revolution. By 2020, the foundation has been created for a revolutionary transformation of the transport system. In Sky, this transformation occurs more rapidly than many expect; as early as 2030, more than half of global car sales are electric, extending to all passenger cars by 2050. Passenger electric vehicles reach cost parity with combustion engine cars by 2025. By 2035, 100% of new car sales are electric in the EU, US, and China, with other countries and regions close behind. One reason is that in some prosperous large cities, workers enjoy the freedom and convenience that the fleets of autonomous electric vehicles provide.  Another reason for the rapid increase of electric vehicles has to do with the exciting new options being offered. For example, in Sky, a standardised chassis design emerges in combination with battery or fuel-cell (FCEV) architecture, being shipped in almost flatpack form to local design companies for bespoke body fabrication using 3D printing techniques.

A new energy system is emerging. The Paris Agreement has sent a signal around the world: climate change is a serious issue that governments are determined to address. By 2070 there is the potential for a very different energy system to emerge. The Sky Scenario outlines what Shell believe is a technologically, industrially, and economically possible route forward, consistent with limiting the global average temperature rise to well below 2°C from pre-industrial levels.

Nigel Holmes