The world will generate 50% of its electricity from wind and solar by 2050, helped by falling costs and the arrival of cheap batteries, Bloomberg New Energy Finance (BNEF) has projected.
According to BNEF’s New Energy Outlook (NEO) 2018, released today, USD 11.5 trillion (EUR 9.9trn) will be invested in new power generation capacity globally between 2018 and 2050, of which USD 8.4 trillion in wind and solar and USD 1.5 trillion in other zero-carbon technologies such as hydro and nuclear.
Solar photovoltaic (PV) capacity will as a result grow 17-fold and wind power capacity will increase sixfold. The levelised cost of electricity (LCOE) for new PV plants and onshore wind is expected to fall by 71% and 58%, respectively by 2050.
BNEF also forecasts that lithium-ion battery prices will continue to slump as electric vehicle (EV) manufacturing builds up during the 2020s. According to Seb Henbest, lead author of NEO 2018, USD 548 billion will be invested in battery storage by 2050, two thirds of which at the grid level and one third behind-the-metre.
The share of coal in global electricity generation will drop to 11% from 38% as it is unable to compete on cost with wind and solar for bulk generation, and with batteries and gas for flexibility, according to Bloomberg’s research service.
Gas-fired generation is expected to rise 15% between 2017 and 2050, but its share of global electricity is seen falling from 21% to 15%.
According to NEO 2018, the renewables penetration by 2050 will reach 87% of power supply in Europe, 55% in the US, 62% in China and 75% in India, while in Australia consumer PV and batteries will make up 43% of all capacity by 2050.
The report further projects that electric cars and buses will account for 9% of global electricity demand in 2050.
BNEF now predicts that emissions from the global electricity sector will rise 2% from 2017 to a 2027 peak and then decline 38% to 2050, which is better than its report a year ago. Even so, electricity would still be unable to contribute its share of efforts to limit temperature rises to below two degrees C and Matthias Kimmel, energy economics analyst at BNEF, said that getting to two degrees requires a zero-carbon solution to the seasonal extremes, and not unabated gas.