New Energy Outlook: Renewables unstoppable
The New Energy Outlook 2016 by Bloomberg New Energy Finance was published last week. The report takes a look at the development of the energy world till 2040. The bad news: Coal and gas will stay cheap. But the good news is: Renewables will grow worldwide anyway.
Costs fall, investments grow
We sum up some important facts of the report:
1. Wind and solar costs fall sharply. The levelised 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.
2. Investments in fossil fuel continue. Investment in coal and gas generation will continue. Some $1.2 trillion will go into new coal-burning capacity, and $892 billion into new gas-fired plants. But the turning point will be reached 2025.
3. But renewables take the bigger part. Some $7.8 trillion will be invested in green power, with onshore and offshore wind attracting $3.1 trillion, utility-scale, rooftop and other small-scale solar $3.4 trillion, and hydro-electric $911 billion.
Batteries become more attractive
4. More Money for climate protection. 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 limit of 450 parts per million.
5. Cheap batteries. 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.
6. Renewables dominate in Europe. Wind, solar, hydro and other renewable energy plants will generate 70% of Europe’s power in 2040, up from 32% in 2015. In the US, their share will jump from 14% in 2015 to 44% in 2040, as that from gas slips from 33% to 31%.
In many points the trends of this Outlook correspond to results of our Megatrends-study we published together with our partner WWF – except the point of the investments in fossil fuel. In anticipation of more stringent climate targets and other social and environmental impacts of conventional energy sources, investors withdraw their funds from fossil fuels. And maybe this will happen earlier than 2025.
Batteries in a Schwarm®
And yes, batteries will get cheaper and cheaper. We expect a cost reduction for batteries by about 45% till 2020 (compared to 2015). This will make batteries more attractive for private customers. LichtBlick will soon offer batteries like the Tesla Powerwall. In the future, the ‘SchwarmDirigent®’, an energy transition platform by LichtBlick, will link up numerous small batteries to form a giant cluster, turning them into a powerful ‘SchwarmSpeicher®’, a storage system. Intelligently networked and managed, the ‘Schwarm®’, a battery cluster, will thereby feed solar energy, which is generated on site but is not needed, into the grid at times of high demand. Or it can take excess wind power out of the grid, for example.
Find out more about LichtBlick’s international activities and our IT platform ‘SchwarmDirigent®’ at: www.lichtblick.com