- The Energy Mix - https://theenergymix.com -

Renewables Hit 64% of Global Electricity Supply by 2050 in New Bloomberg Analysis

Kenuoene/pixabay

New investment worth US$11.5 trillion will drive renewable energy to 64% of global electricity supply through 2050, while coal will largely be squeezed out of the grid, according to the annual New Energy Outlook report issued last week by Bloomberg New Energy Finance.

“Wind and solar are set to surge to almost ‘50 by 50’—50% of world generation by 2050—on the back of precipitous reductions in cost, and the advent of cheaper and cheaper batteries that will enable electricity to be stored and discharged to meet shifts in demand and supply,” BNEF states.

“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,” said lead author Seb Henbest, BNEF’s head of Europe, Middle East and Africa. “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.”

Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.

The 2018 edition of the annual outlook “is the first to highlight the huge impact that falling battery costs will have on the electricity mix over the coming decades,” BNEF notes. “Lithium-ion battery prices, already down by nearly 80% per megawatt-hour since 2010, will continue to tumble as electric vehicle manufacturing builds up through the 2020s.”

Of the total new investment over the next 32 years, BNEF sees $9.8 trillion going to wind, solar, and “other zero-emissions technologies such as hydro and nuclear,” Bloomberg News states [2]. The report foresees total electricity costs falling 71% by mid-century, on top of a 77% drop between 2009 and 2018, PV Magazine adds [3]. Those reductions will support a 17-fold increase in solar photovoltaic capacity and six-fold growth of wind.

The “dire” trend for coal will see “fuel burn” in power stations falling 56% between 2017 and 2050.

“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 for bulk electricity generation, and by batteries and gas for flexibility, the future electricity system will reorganize around cheap renewables.”

In addition to squeezing out coal, BNEF says surging renewables will shift the role of natural gas in a transformed electricity system. Gas plants will be “increasingly built and used to provide backup for renewables rather than to produce so-called base load, or round-the-clock, electricity,” states BNEF’s summary of the report. “BNEF sees $1.3 trillion being invested in new capacity to 2050, nearly half of it in ‘gas peaker’ plants rather than combined-cycle turbines. Gas-fired generation is seen rising 15% between 2017 and 2050, although its share of global electricity declines from 21% to 15%.”

BNEF translates the shift in supply mix translating into 2% growth in electricity system emissions between 2017 and 2027, followed by a 38% drop through 2050. Those outcomes “would still mean electricity failing to fulfill its part of the effort to keep global CO 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 2.0°C,” the summary states.

“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 BNEF energy economic analyst Matthias Kimmel. “Getting to 2.0° requires a zero-carbon solution to the seasonal extremes, one that doesn’t involve unabated gas.”

But “even without tighter environmental rules, renewables will be increasingly attractive to utilities, if only because of their falling costs,” writes Bloomberg News. “Building wind and solar farms will become much cheaper by 2040, according to the BNEF estimates, while traditional nuclear and coal projects become more costly.”