Fossil fuels now account for around 80% of energy supply in the U.S. and Canada, a figure projected by global risk assurance company DNV to drop to less than 50% by 2050. Fueled by the Inflation Reduction Act (IRA) in the U.S. and policies enacted by the Canadian government, $12 trillion will be spent on grid capacity and renewables in this timeframe. Overall expenditure on energy will be the equivalent of 2.5% of GDP by 2050, compared to 4% now, due to the intrinsic efficiency of renewables and electrification.

Boosted by the IRA, solar and wind power will grow 15- and 8-fold, respectively, in the U.S. by 2050 as coal production drops 85% by midcentury as it struggles to compete with these cheaper forms of electricity production, such as wind and solar as well as natural gas. A shift to electric vehicles will foster a reduction in domestic oil demand, with consumption forecast to decline by 75% by midcentury. Natural gas demand is approaching its peak and consumption will almost halve by 2050 as power generation becomes dominated by renewables, but also here export remains stable.

Electrification will double by 2050 and account for 41% of the region’s overall energy demand driven by new demand categories such as electrified road transport, electrolysis for hydrogen production, and the use of heat pumps in buildings and manufacturing. Solar will emerge as the largest producer of electricity by the mid-2030s and will account for almost half of all electricity generated in North America by 2050.

Despite these sustainable energy gains, the U.S. and Canada will not reach net zero carbon dioxide emissions by 2050. Such emissions are forecast to drop 75% by 2050 as fossil fuels, especially natural gas, will still play a role in the energy mix. For the world to meet the goals of the Paris Agreement, North America would have to be net zero by early 2040s, an accomplishment that would require intensive scale-up of direct air capture and carbon capture and storage capacity.