Although $7.8 trillion will be invested globally in renewables between 2016 and 2040, another $5.3 trillion will be required to bring world emissions onto a track compatible with the United Nations 2°C climate target. That is one of the main findings of the New Energy Outlook 2016 report from Bloomberg New Energy Finance (BNEF).BNEF says that onshore and offshore wind will attract $3.1 trillion, utility-scale, rooftop and other small-scale solar $3.4 trillion, and hydro-electric $911 billion, for a total of $7.8 trillion. The 2⁰C scenario would require much more money. On top of the $7.8 trillion, the world would need to invest another $5.3 trillion in zero-carbon power by 2040 to prevent CO2 in the atmosphere rising above the Intergovernmental Panel on Climate Change’s ‘safe’ limit of 450 parts per million.Additional findings from the report:
Wind and solar costs will fall sharply. The levelized costs of generation per MWh for onshore wind will fall 41% by 2040, and solar photovoltaics by 60%, making these two technologies the cheapest ways of producing electricity in many countries during the 2020s and in most of the world in the 2030s.
Electric vehicles (EVs) will add 2,701TWh, or 8%, to global electricity demand in 2040 – reflecting BNEF’s forecast that they will represent 35% of worldwide new light-duty vehicle sales in that year, equivalent to 41 million cars– about 90 times the 2015 figure.
Small-scale battery storage will become a $250 billion market. The rise of EVs will drive down the cost of lithium-ion batteries, making them increasingly attractive to be deployed alongside residential and commercial solar systems. BNEF expects total behind-the-meter energy storage to rise dramatically from around 400MWh today to nearly 760GWh in 2040. We expect total behind-the-meter energy storage to rise dramatically from around 400MWh today to nearly 760GWh in 2040.
India is the key to the future global emissions trend. Its electricity demand is forecast to grow 3.8 times between 2016 and 2040. Despite investing $611 billion in renewables in the next 24 years, and $115 billion in nuclear, it will continue to rely heavily on coal power stations to meet rising demand. This is forecast to result in a trebling of its annual power sector emissions by 2040.
Commenting on the overall trend of power generated by renewables vs. fossil fuels, Elena Giannakopoulou, senior energy economist on the NEO 2016 project, said: “As a global generation source, gas will be overtaken by renewables in 2027. It will be 2037 before renewables overtake coal.”