By 2030 the cost of renewables will undercut the majority existing fossil fuel power stations in terms of price, found Bloomberg New Energy Finance (BNEF) in its New Energy Outlook 2017 (NEO2017), released today (June 15). It noted that renewable energy is expected to dominate new energy investments in coming years, and make up significantly more of the world’s energy supply in coming years.
“This year’s NEO shows an even more dramatic low-carbon transition than we have projected in previous years, with steeper drops in wind and solar costs and faster growth for storage,” Jon Moore, chief executive of BNEF.
The report anticipated that the cost of solar energy will fall a further 66 percent by 2040— although some others, like International Renewable Energy Agency anticipate it could fall much quicker. But BNEF anticipated the levelized cost of solar electricity from PV is now just about a quarter of what it was in 2009, according to NEO 2017. “By then a dollar will buy 2.3 times as much solar energy than it does today. Solar is already at least as cheap as coal in Germany, Australia, the U.S., Spain and Italy. By 2021, it will be cheaper than coal in China, India, Mexico, the U.K. and Brazil as well,” BNEF stated.
“This year’s report suggests that the greening of the world’s electricity system is unstoppable, thanks to rapidly falling costs for solar and wind power, and a growing role for batteries, including those in electric vehicles, in balancing supply and demand,” said Seb Henbest, lead author of NEO 2017 at BNEF.
Onshore wind costs will fall by another 47 percent by 2040, the report found. While offshore wind, which is starting to take off, will see costs fall by 71 percent by 2040. The cost drops in offshore wind will come through development experience, competition and reduced risk, as well as economies of scale achieved by building larger projects and turbines, BNEF explained.
In all, this means the renewable energy industries are likely to see $7.4 trillion or 72 percent of the $10.2 trillion BNEF anticipates the world will spend on new energy. Solar will see roughly $2.8 trillion of the funds and see a 14-fold jump in installed capacity. While wind will see $3.3 trillion as it grows fourfold by 2040. “As a result, wind and solar will make up 48 percent of the world’s installed capacity and 34 percent of electricity generation by 2040, compared with just 12 percent and 5 percent now.”
The report also anticipated that coal-fired power will collapse in Europe and the US soon. By 2026 it will peak globally. “We expect 369GW of planned new coal plants to be cancelled, a third of which are in India, and for global demand for thermal coal in power to decline by 15% over 2016-40,” the report stated.
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