Surge of Optimism in Shell's Scenario
The scenario explores the potential of AI to change the energy system
๐ฆ๐๐ฟ๐ด๐ฒ ๐ผ๐ณ ๐ข๐ฝ๐๐ถ๐บ๐ถ๐๐บ ๐ถ๐ป ๐ฆ๐ต๐ฒ๐น๐น'๐ ๐ฆ๐ฐ๐ฒ๐ป๐ฎ๐ฟ๐ถ๐ผ. Shell put economic and energy upside in their new Surge scenario in its annual 2025 Energy Security Scenarios. What stood out?
Shellโs Surge scenario explores the potential of AI to change the energy system and โa new wave of economic growth spurred by productivity improvements catalyzed by AIโ.
There is tone of optimism about the human condition in the Surge scenario that stands out relative to the Horizon (reference case to 1.5C and the Paris Agreement) and the Archipelagos (a case that considers tensions, trade frictions and security), that I think reflects thriving middle ground. For example:
The Surge scenario sees the global economy ~15% larger by 2060 than the alternatives and underwrites economic growth above the 2% beyond 2030.
Net-zero emissions are achieved, but much later in the timeline (2080) as strong economic growth leads to higher energy demand (from sources of all types). Yet, it is still achieved and total warming is modelled to peak at 2.2C and they suggest โa future with warming above 2โ2.5ยฐC appears unlikely.โ
Natural gas demand grows through the 2030โs as economies (especially in Asia) demand more of it to meet their energy (and reliability) needs. Alternative scenarios see gas demand flat to declining.
Negative emissions from direct air capture (DAC), bioenergy and land use changes play a big role in getting to net-zero and capping temperature rise. Notably, the growth in inexpensive solar energy and declining technology costs push DAC enable this technology to play a meaningful role towards the end of the timeline, with the Middle East leading the way.
Some of my favorite images from Shellโs report:
