About half the world’s power will be generated by wind and solar resources by 2050. Generation from coal will drop more than 70% from today’s levels. That’s according to research from energy analysts published June 19 in the “New Energy Outlook 2018” (NEO) from Bloomberg New Energy Finance (BNEF).
The NEO report outlines information from more than 65 analysts researching energy worldwide, including country-by-country modeling of power systems along with the costs of different technologies.
The report says energy costs will continue to shift in favor of renewable generation, including wind, solar, and battery storage. The 2018 outlook is the first annual report from BNEF to look at the impact of falling battery costs on the global generation mix.
Seb Henbest, lead author of the report and head of Europe, Middle East and Africa for BNEF, said, “We see $548 billion being invested in battery capacity by 2050, two-thirds of that at the grid level and one-third installed behind-the-meter by households and businesses. The arrival of cheap battery storage will mean that it becomes increasingly possible to finesse the delivery of electricity from wind and solar, so that these technologies can help meet demand even when the wind isn’t blowing and the sun isn’t shining. The result will be renewables eating up more and more of the existing market for coal, gas and nuclear.”
The report says coal units will provide just 11% of worldwide electricity generation by 2050, down from 38% today, a drop of about 71%. It follows a recent report from BNEF, issued jointly with the United Nations Environment Program, that shows renewable energy capacity new-builds were responsible for 61% of all new net power generation additions in 2017.
“Coal emerges as the biggest loser in the long run,” said Elena Giannakopoulou, BNEF’s head of energy economics. “Beaten on cost by wind and PV [photovoltaic solar] for bulk electricity generation, and batteries and gas for flexibility, the future electricity system will reorganize around cheap renewables—coal gets squeezed out.”
Today’s report echoes recent announcements by U.S. utilities outlining plans to increase generation from renewables and phase out coal plants. Those include a “Clean Energy Plan” from Xcel Energy in Colorado and a recent integrated resource plan from Dominion Energy in Virginia.
The NEO 2018 says $11.5 trillion will be invested globally in new power generation capacity between 2018 and 2050. The report says $8.4 trillion will go toward wind and solar, with another $1.5 trillion invested in nuclear and hydropower. The report says the investments represent a 17-fold increase in solar PV capacity and a six-fold jump in wind power capacity across the globe.
The report also says the levelized cost of electricity (LCOE) from new solar plants will fall 71% by 2050, with the LCOE of onshore wind falling by 58%. The NEO 2018 says the LCOE for solar and onshore wind already has dropped by 77% and 41%, respectively, from 2009 to this year.
The forecast for natural gas-fired generation is mixed. The report says gas-fueled electricity output will jump 15% by 2050, but its share of global generation will fall from its current 21% to 15% over the next three decades. Analysts said $1.3 trillion will be invested in new gas-fired capacity to 2050, with half that total for peaker plants that provide power during periods of high demand—often backing up renewable generation—as opposed to combined cycle units.
The report says falling coal generation bodes well for the continued reduction of carbon emissions worldwide. But it notes that even with a forecast 38% drop in emissions from now until 2050, the power sector would still not meet a target of keeping global carbon dioxide (CO2) levels below 450 parts per million (ppm), the level the Intergovernmental Panel on Climate Change considers to be consistent with limiting the rise in global temperatures to less than 2 degrees Celsius.
“Even if we decommissioned all the world’s coal plants by 2035, the power sector would still be tracking above a climate-safe trajectory, burning too much unabated gas,” said Matthias Kimmel, energy economics analyst at BNEF. “Getting to 2 degrees requires a zero-carbon solution to the seasonal extremes, one that doesn’t involve unabated gas.”
BNEF says its report is based on the “evolving economics of different power technologies, and on projections for electricity demand fundamentals such as population and GDP. It assumes that existing energy policy settings around the world remain in place until their scheduled expiry, and that there are no additional government measures.”
Other highlights of the report include:
- Renewables will provide 87% of electricity in Europe and 55% of U.S. power by 2050.
- “Decentralization” will be a buzzword in places such as Australia, where 43% of generation capacity by 2050 will come from consumer PV and battery storage.
- Electric vehicles (EVs) will account for about 9% of total power demand globally in 2050. Bloomberg earlier reported that EVs will account for 55% of new vehicle sales worldwide by 2040.
—Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).