A new report by Bloomberg has projected that global investments in power generation could hit $11.5 trillion, between 2018 and 2050.
The Bloomberg New Energy Finance (BNEF)’s New Energy Outlook (NEO) 2018, published this week, indicated that wind and solar had a 50 percent chance for global energy generation by 2050.
This year’s outlook is the first to highlight the huge impact that falling battery costs will have on the electricity mix over the coming decades.
BNEF predicted that lithium-ion battery prices, already down by nearly 80 per cent per megawatt-hour since 2010, would continue to tumble as electric vehicle manufacturing builds up through the 2020s.
The Head of Europe, Middle East and Africa for BNEF and lead author of NEO 2018, Seb Henbest, 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.”
NEO 2018 report predicted that $11.5 trillion being invested globally in new power generation capacity between 2018 and 2050, would have $8.4 trillion of that amount going to wind and solar while $1.5 trillion would be invested in other zero-carbon technologies such as hydro and nuclear.
According to Bloomberg, the projected investment would produce a 17-fold increase in solar photovoltaic capacity worldwide, and a six-fold increase in wind power capacity.
Commenting, the Head of energy economics at BNEF, Elena Giannakopoulou, said: “Coal emerges as the biggest loser in the long run. Beaten on cost by wind and PV for bulk electricity generation, and batteries and gas for flexibility, the future electricity system will reorganize around cheap renewables – coal gets squeezed out.”
The BNEF foresees that the role of gas in the generation mix will evolve, with gas-fired power stations increasingly built and used to provide back-up for renewables rather than to produce so-called base-load, or round-the-clock, electricity.
BNEF projected also that out of the $1.3 trillion that will be invested in new capacity to 2050, nearly half of it would be committed to ‘gas peaker’ plants rather than combined-cycle turbines.
It stated further: “Gas-fired generation is seen rising 15 per cent between 2017 and 2050, although its share of global electricity declines from 21 per cent to 15 per cent. Fuel burn trends globally are forecast to be dire in the long run for the coal industry, but moderately encouraging for the gas extraction sector.”
NEO 2018 sees coal burn in power stations falling 56 per cent between 2017 and 2050, while that for gas rises 14 per cent. This is even as BNEF foresees global electricity sector emissions rising two per cent from 2017 to a peak in 2027, and then falling 38 per cent to 2050.
It predicted that however, this would still mean electricity failing to fulfil its part of the effort to keep global CO₂ levels below 450 parts per million – the level considered by the Intergovernmental Panel on Climate Change to be consistent with limiting the rise in temperatures to less than two degrees Celsius.
An energy economics analyst at BNEF, Matthias Kimmel, commented: “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. Getting to two degrees requires a zero-carbon solution to the seasonal extremes, one that doesn’t involve unabated gas.”