BNEF forecast predicts renewables investment boom

• 9 years ago (2014-07-02)
• Junior Isles

Europe 1061 North America 998 Renewables 752

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Renewable energy investment could absorb as much as two-thirds of the $7.7 trillion forecast to be spent on new power plants by 2030, according to a new report from Bloomberg New Energy Finance.

The BNEF forecast estimates that $5.1 trillion will be invested in renewables including hydro power, with Asia accounting for $2.5 trillion, the Americas $816 billion, Europe $967 billion, and the Middle East and Africa another $818 billion.

This estimate puts half of all renewable investment in Asia, as this is where power capacity will grow the most. BNEF says that declining costs will rapidly make renewables price competitive with fossil fuel generation, leading to a decline in fossil fuels’ share of the generation mix from 64 per cent today to 46 per cent by 2030.

Solar cell and wind turbine prices are at an all-time low and this is making clean energy economically viable at previously marginal locations, even though early adopting governments like Germany and the US are scaling back some incentives.

“What we are seeing is global CO2 emissions on track to stop growing by the end of next decade, with the peak only pushed back because of fast-growing developing countries, which continue adding fossil fuel capacity as well as renewables,” said Michael Liebreich, chairman of BNEF’s advisory board.

5 TW of power generation capacity will be added globally by 2030, according to BNEF, but coal, gas and oil-fired plants will account for merely a fifth of this figure – and this fifth entirely in developing nations.

“The period to 2030 is going to see spectacular growth in solar in this region [Asia], with nearly 800 GW of rooftop and utility-scale PV added,” claims BNEF’s head of Asia Pacific, Milo Sjardin, in the report.

“This will be driven by economics, not subsidies, as our analysis suggests that solar will be fully competitive with other power sources by 2020,” he continues.

Solar power will be the most prevalent renewable installation in every region over the next decade and a half, the report claims, and capacity will see the biggest boom in Asia, with new solar sites exceeding new gas and coal combined.

Overall, solar and wind power are predicted to reach 16 per cent of the energy mix in 2030, compared with 3 per cent in 2013, while large-scale hydro power will retain the largest share of power generation amongst clean energy sources.

Gas-fired generation will ride out the renewables boom, with installations growing due to relatively low emissions and a glut of new shale supply. Coal, by contrast, will fare much worse, with capacity falling in Europe and America due to tighter emissions standards, and growth in Asia only due to the region’s anticipated quicker economic growth.