Actions across all sectors will be needed to leverage the most cost-effective solutions. Technological opportunities abound in both the supply and demand sides of the energy system. A portfolio of technologies is needed to deliver secure and affordable energy services while also reducing emissions.

End-use electrification is expanding, but decarbonising power systems while increasing electricity in end-uses brings new challenges and opportunities. Current trends would increase the share of electricity in final energy demand across all end-use sectors from 18% today to 26% in the RTS by 2060, the largest relative increase of all energy carriers. End-use electrification can also enable a shift from direct reliance on fossil fuels to decarbonised power. In the 2DS and the B2DS, electricity becomes the largest final energy carrier, slightly ahead of oil. The shift is particularly notable in transport, where electricity becomes the primary fuel for land-based transport in the B2DS.

Decarbonised power is a backbone of the clean energy transformation. The global power sector can reach net-zero CO2 emissions by 2060 under the 2DS scenario. This would require a scaled up deployment of a portfolio of technologies, including 74% of generation from renewables (including 2% of sustainable bioenergy with CCS [BECCS]), 15% from nuclear, 7% from fossil fuelled power plants with CCS, and the remainder from natural gas- fired generation.

More efficient buildings support the whole energy system transformation. Rapid deployment of high‐efficiency lighting, cooling, and appliances could save 50 EJ or the equivalent of nearly three–quarters of today’s global electricity demand between now and 2030. Those savings would allow greater shifts to electricity without additional burden to the power sector.

Technology and policy can steer transport towards increased sustainability. Electrification emerges as the major low-carbon pathway for the transportation sector. This trend is already partly underway, with the electric car stock projected to increase 28 times by 2030 in the RTS from today’s two million vehicles. The 2DS scales up this ambition to 160 million electric cars, while the B2DS would require 200 million electric cars on the road in the same time frame, leading to 90% of all cars on the road being electric by 2060. Fast tracking electro-mobility will require major technological developments and infrastructure investments based on strong policy support. Policies and technologies that reduce the need for individual transportation — such as better urban planning or increased use of collective transportation — can make deployment of new technologies more manageable and significantly reduce the required investment.

Energy-intensive industries are essential actors in any sustainable transformation strategy. Energy demand in industry is the highest of the end-use sectors, and it is projected to increase by about two-thirds by 2060 in the RTS. Opportunities exist to improve manufacturing efficiency, maximise the use of locally available resources, and optimise materials use. Technologies that are not yet commercial play an important role in industrial process decarbonisation, contributing to an 18% reduction in cumulative direct CO2 emissions in 2DS and 36% in the B2DS. This demonstrates the need to support innovation in economically strategic sectors such as iron and steel, cement and chemicals.

There is a considerable potential for energy savings in heating and cooling that remains largely untapped. Today, heating and cooling in buildings and industry account for approximately 40% of final energy consumption — which is a larger share than transportation (27%). Additionally, nearly 65% of this demand relies on fossil fuel sources. Energy efficiency and switching to clean final energy carriers (including decarbonised electricity and district energy) could cut fossil fuel consumption for heating and cooling in half by 2060 compared with today.

Negative emissions, notably in power generation and fuel transformation, become critical as low-carbon ambitions rise. In the B2DS, BECCS delivers almost 5 giga tonnes of “negative emissions” in 2060. These negative emissions are key to the energy sector becoming emissions-neutral by 2060. While BECCS technologies face substantial challenges, they compensate for residual emissions elsewhere in the energy system that are even more technically difficult or costly to abate directly. This will require massive technological learning and scale-up in both sustainable bio energy and CCS, which have been lagging behind so far.

Innovation must be supported at all stages, from early research to full demonstration and deployment. Both incremental and radical innovations are needed to transition to a new energy system. Governments have an important role in ensuring predictable, long-term support in all stages of innovation - i.e. from basic and applied research through to development, demonstration and deployment phases. Allocation of resources to various technologies must consider both short- and long-term opportunities and challenges for innovation, as well as reflect the level of technology maturity.

International co-operation between various levels of governments and with the private sector is essential. Multilateral collaboration can improve the cost-effectiveness of energy technology innovation and build confidence that progress is being achieved at a worldwide scale. Globalisation is sparking more open innovation frameworks that help pool resources to accelerate research and development (R&D), underwrite demonstration, and stimulate faster deployment of proven technologies. Increasing local innovation capacity is essential to the successful deployment of innovative technologies that can help meet local policy and environmental objectives and contribute to global sustainability goals. Existing initiatives, such as the IEA Technology Collaboration Programmes, the Clean Energy Ministerial and Mission Innovation should be properly anchored in all policy decision-making processes.