The latest edition of the Bloomberg New Energy Finance (BNEF) report “New Energy Outlook 2016” finds that wind and solar power will start being the cheapest form of energy in many countries in the 2020s and most of the world by the 2030s—that’s starting in just about four years! It also anticipates that in the next couple of decades renewable energy will make up 60 percent of the world’s electric generation capacity.
“The New Energy Outlook incorporates a significantly lower trajectory for coal and gas prices than the 2015 edition did a year ago but, strikingly, still shows rapid transition towards clean power over the next 25 years,” said Jon Moore, chief executive of BNEF.
In fact solar power will be the least-cost generation technology in most countries by 2030, according to the report. Between 2016 and 2040, Bloomberg anticipated that 3.7 terawatts of new solar power will be installed. That’s 43 percent of the electric generation it anticipated will come online in the next 15 years.
The report also found that by 2040 wind, solar and hydroelectric generation will supply 70 percent of Europe’s electric needs up from 32 percent in 2015. In the US they will supply 44 percent of the country’s electricity in 2040, up from 14 percent in 2015. Developing nations already are investing more in wind and solar than in fossil fuels as well.
All that will happen despite persistent low costs for coal, gas and oil between now and 2040. The report reduced BNEF’s long-term forecasts for coal by 33 percent and gas prices by 30 percent, cutting the cost of generating power with those fuels.
But the cost of power from renewables will fall even more. Wind will fall 41 percent by 2040, and photovoltaics by 60 percent, that will make them the cheapest means of electric generation.
Between now and 2040 the report anticipated a worldwide $11.4 trillion investment. “Some $7.8 trillion will be invested globally in renewables between 2016 and 2040, two thirds of the investment in all power generating capacity,” said Seb Henbest, head of Europe, Middle East and Africa for BNEF, and lead author of NEO 2016. Of that wind will attract $3.1 trillion in investments, solar will attract $3.4 trillion and hydroelectric $911 billion.
On the other hand fossil fuels will only attract $2.1 trillion in new investments. Coal will fetch roughly $1.2 trillion in investments and gas-fired electric generation will see roughly $892 billion in investments.
Despite the trend toward renewable energy the report cautioned that the current investment alone would not enable the world’s nations to meet the United Nation’s 2°C. “It would require trillions more to bring world emissions onto a track compatible with the United Nations 2°C climate target,” Henbest said.Tweet