Wind and solar power are now the cheapest way to add new power in two-thirds of countries around the world and they will make up almost half of the electricity system by 2050, a new report claims.
BloombergNEF’s New Energy Outlook (NEO) 2019 says that renewable energy deployment is happening so quickly that it will put the world on track to limit global temperature rises to 2C by 2030. Staying on that path to 2050 will be much more difficult, though.
The report says that as the global economy becomes increasingly electrified, not just in the power sector but across transportation, heating, and cooling as well, electricity demand will rise by 62%, leading to almost a tripling of capacity by 2050 and more than $13 trillion of investment, of which wind will take $5.3 trillion and solar $4.2 trillion. In addition to the spending on new generating plants, $840 billion will go to batteries and $11.4 trillion to grid expansion.
The Outlook suggests that new wind and solar farms, often with battery storage, will be able to produce power more cheaply – without subsidies – than already-built coal and gas plants almost everywhere in the world by 2030. As a result, the role of coal in the global power mix will fall from 37% today to just 12% by 2050 while oil as a power-generating source will be virtually eliminated, as wind and solar grow from 7% of generation today to 48% by 2050. The contributions of hydro, natural gas, and nuclear remain roughly level on a percentage basis.
Matthias Kimmel, NEO 2019 lead analyst, said: “Our power system analysis reinforces a key message from previous New Energy Outlooks – that solar photovoltaic modules, wind turbines and lithium-ion batteries are set to continue on aggressive cost reduction curves, of 28%, 14% and 18% respectively for every doubling in global installed capacity. By 2030, the energy generated or stored and dispatched by these three technologies will undercut electricity generated by existing coal and gas plants almost everywhere .”
The projected growth of renewables through 2030 indicates that many nations can follow a path for the next decade and a half that is compatible with keeping the increase in world temperatures to 2 degrees or less, BNEF analysts say. And they can do this without introducing additional direct subsidies for existing technologies such as solar and wind.