Energy Transition in North America: Analysis and Challenges
Key Ideas
  • Net energy-related emissions in North America's power sector are forecasted to decrease by 20% by 2030 compared to 2024 levels, driven by a drop in power sector emissions and electric transportation adoption.
  • Key challenges for the region's energy transition include trade tariffs, infrastructure bottlenecks, and policy uncertainties around emerging technologies, potentially leading to higher emissions in a delayed transition scenario.
  • Renewables and battery storage are projected to dominate new power generation capacity, with a significant decline in oil demand due to electrification of transport. Coal demand is also expected to plummet.
  • Innovation in advanced nuclear design, low-carbon hydrogen, and policies promoting cost-sharing and infrastructure reform are highlighted as crucial aspects to unlock a net-zero future in North America.
According to Wood Mackenzie's 'Energy Transition Outlook 2024-25: Americas' report, North America is expected to witness a notable decrease of 20% in net energy-related emissions from the power sector by 2030 compared to 2024 levels. This reduction is attributed to a 24% drop in power sector emissions by 2030 and the increasing adoption of electric transportation. However, challenges such as trade tariffs, infrastructure bottlenecks, and policy uncertainties surrounding emerging technologies could impede the energy transition progress. The report outlines that renewables and battery storage will comprise 80% of new power generation capacity, accelerating the phase-out of oil and natural gas. The study also emphasizes the importance of blue hydrogen and power generation in providing demand resiliency for natural gas. Policy-wise, key factors such as the Inflation Reduction Act (IRA) in the US and Canada's net zero target are crucial for decarbonization efforts, although uncertainties around carbon pricing and infrastructure permitting pose obstacles. Additionally, the report highlights the significance of innovation and emerging technologies in decarbonization strategies, with advanced nuclear design and low-carbon hydrogen playing key roles. The lack of progress on low-carbon infrastructure is identified as a major roadblock, with the need for policies promoting cost-sharing and expanding renewable power projects. Overall, the sentiment of the report is positive, emphasizing the potential for North America to achieve a net-zero future with the right policies and technological advancements.
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