Batteries, Solar, Wind, Australia and Japan: All Winners in New Bloomberg NEF Forecast
The winners are batteries, wind, solar, and the decentralized energy systems of Australia and Japan, in a forecast issued today by Bloomberg New Energy Finance (NEF). Coal is the loser.
Of the $11.5 trillion that the world will invest in power from 2018 to 2050, $8.4 trillion will go to wind and solar and $548 billion to batteries, according to New Energy Outlook (NEO) 2018, a 150-page report that models the future of power systems worldwide.
The report predicts a continual tumbling of lithium-ion battery prices, already down by nearly 80 percent per MWh since 2010, as more electric vehicles are manufactured through the 2020s.
Electric vehicles add around 3,461 TWh of new electricity demand globally by 2050, equal to 9 percent of total demand. The report forecasts that the world will meet about half of the EV demand by dynamic charging that takes advantage of low power prices brought on by high renewable energy output.
Among stationary batteries, two thirds will be used for the grid and one third for households and businesses, the report says.
In the US, batteries start to gain market significance around 2030 and reach peak around 2050.
Australia and Japan develop most decentralized energy systems
Meanwhile, Australia and Japan are on track to develop the two most decentralized electric systems in the world, the report says.
Japan’s decentralization comes as energy demand shrinks and consumers install solar photovolatics and energy storage. The report forecast that 34 percent of Japan’s installed electric capacity will come from decentralized sources by 2050. Australia will top that with 44 percent from decentralized sources with wind, solar and storage replacing today’s centralized coal-fired generation.
Coal shrinks, batteries “finesse” renewables
Worldwide electricity generated from coal shrinks from today’s 38 percent to 11 percent of capacity. In the US both coal and nuclear become negligible because of age and price by 2050, barring government policy intervention, the report says.
Bloomberg NEF forecasts that wind and solar will become almost 50 percent of world generation by 2050.
“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,” said Seb Henbest, head of Europe, Middle East and Africa for BNEF and lead report author.
Bloomberg NEF envisions a changing role for natural gas-fired power plants, which it says will increasingly be built as backup for renewables rather than to produce round-the-clock electricity. Of the $1.3 trillion being invested in new capacity to 2050, nearly half goes to gas peaker plants rather than combined-cycle turbines. In all, gas-fired generation rises 15 percent between 2017 and 2050, although its share of global electricity declines from 21 percent to 15 percent in the report.
A free summary of the report is available at https://about.bnef.com/new-energy-outlook/.