Editing IPCC:AR6/WGIII/Chapter-16 (section)

=== Box 16.1 | Comparing Observed Energy Technology Costs and Deployment Rates with Projections from AR6 Global Modelled Pathways ===

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Currently observed costs and deployment for electricity supply technologies from a variety of sources are compared with projections from two different sets of scenarios contained in the AR6 Scenario database: (i) scenarios that limit warming to 3°C (&gt;50%) and scenarios that limit warming to 4°C (&gt;50%), and (ii) scenarios that limit warming to 2°C (&gt;67%) or lower (AR6 Scenarios Database). Global aggregate costs are shown for the following technologies: coal with carbon dioxide capture and storage (CCS), gas with CCS, nuclear, solar PV, onshore and offshore wind.

The decrease in forecasted capital costs is not large compared to current capital costs for most technologies, and does not differ much between the two sets of scenarios (Box 16.1, Figure 1a). For offshore wind some of the models are more optimistic than the current reality ( [[#Timilsina--2020|Timilsina 2020]] ). Several sources of current solar PV costs report values that are at the low end of the AR6 Scenario Database. By 2050, the median technology cost forecasts decrease by between 5% for nuclear and 45–52% for solar (Box 16.1, Figure 1c).

Median values of renewables installed capacity increase with respect to 2020 capacity in scenarios that limit warming to 3°C (&gt;50%) and in scenarios that limit warming to 4°C (&gt;50%) (Box 16.1 Figure 1b), where energy and climate policies are implemented in line with NDCs announced prior to COP26. More stringent targets (2°C) are achieved through a higher deployment of renewable technologies: by 2050 solar (wind) capacity is estimated to increase by a factor of 15 (10) (Box 16.1, Figure 1c). This is accompanied by an almost complete phase-out of coal (–87%). The percentage of median changes in installed capacity in scenarios that limit warming to 3°C (&gt;50%) and in scenarios that limit warming to 4°C (&gt;50%)is within comparable ranges of that observed in the last decade. In the case of scenarios that limit warming to 2°C (&gt;67%) or lower, capacity installed is higher for renewable technologies and nuclear, and lower for fossil-based technologies (Box 16.1, Figure 1c).

The higher deployment in scenarios that limit warming to 2°C (&gt;67%) or lower cannot be explained solely as a result of technology cost dynamics. In IAMs, technology deployment is also governed by system constraints that characterise both 3°C (&gt;50%) and 4°C (&gt;50%) scenarios, for example, the flexibility of the energy system, the availability of storage technologies. From a modelling point of view, implementing more stringent climate policies to meet the 2°C limit forces models to find solutions, even if costly, to meet those intermittency and flexibility constraints and temperature target constraints.

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'''Box 16.1, Figure 1 | Global technology cost and deployment in two groups of AR6 scenarios: (i) scenarios that limit warming to 3°C (&gt;50%) and scenarios that limit warming to 4°C (&gt;50%) (“Reference and current policies”), and (ii) scenarios that limit warming to 2°C (&gt;67%) or lower (“2°C and 1.5°C”).''' Panel ''(a)'' Current capital costs are sourced from Table 1 ( [[#Timilsina--2020|Timilsina 2020]] ); distribution of capital costs in 2030 and 2050 (AR6 Scenarios Database). Blue symbols represent the mean. ‘Current’ capital costs for coal and gas plants with CCS are not available; Panel ''(b)'' Total installed capacity in 2019 ( [[#IEA--2020c|IEA 2020c]] ; [[#IRENA--2020a|IRENA 2020a]] , b); distribution of total installed capacity in 2030 and 2050 (AR6 Scenario Database). Blue symbols represent the mean; Panel ''(c)'' Percentage of change in capital costs and installed capacity between (2010–2020) and percentage of median change (2020–2030 and 2020–2050) (Median year –Median 2020 )/Median 2020 *100. ‘M’ indicates the number of models, ‘S’ the number of scenarios for which this data is available. ‘Reference and current policies’ are scenarios that limit warming to 3°C (&gt;50%) and scenarios that limit warming to 4°C (&gt;50%) (C6 and C7 AR6 scenario categories). ‘2C and 1.5C’ are scenarios that limit warming to 2°C (&gt;67%) or lower (C1, C2 and C3 AR6 scenario categories). Each model may have submitted data for more than one model version.

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