Bloomberg New Energy Finance is out with its New Energy Outlook, the annual assessment of the changing energy sector. The skinny: Renewables are set to dominate energy investments through 2040 “thanks to rapidly falling costs for solar and wind power, and a growing role for batteries, including electric vehicle batteries, in balancing supply and demand.” Five findings that caught our interest:
- Renewables dominate energy investments. Wind and solar plants could account for three-quarters of the $10.2 trillion in new energy investment through 2040. China is expected to attract 28% of all energy investment, and India 11% through 2040.
- Solar trumps coal. Solar is already (at least) as cheap as coal in Germany, Australia, the U.S., Spain and Italy. By 2021, solar will also be cheaper than coal in China, India, Mexico, the U.K. and Brazil. The price of solar is expected to fall another 66% by 2040.
- Batteries drive renewable reliability. Utility and small-scale batteries increasingly provide flexibility during peak demand. That will help drive renewable penetration by 2040 to 74% in Germany, 38% in the U.S., 55% in China and 49% in India. Charging electric vehicles when renewable energy is flowing and prices are low will help utilities manage their grids.
- Mexico is forecast to get 80% of its energy from renewables by 2040. Middle East and North Africa are expected to shift away from oil and embrace natural gas, which will make up 53% of installed capacity by 2040.
- Projected investments in renewables not enough. The world’s power emissions are set to peak within a decade (then decline by 1% per year through 2040). Another $5.3 trillion investment is needed to put the power sector on a trajectory toward the 2-degree temperature rise called for in the Paris climate agreement.
