Worldwide power generation will experience five trends over the next 25 years according to the New Energy Outlook 2015 published by Bloomberg New Energy Finance. The report is based on analysis country-by-country and technology-by-technology of electricity demand, costs of generation and structural changes in the electricity system.
“NEO 2015 draws together all of BNEF’s best data and information on energy costs, policy, technology and finance. It shows that we will see tremendous progress towards a decarbonised power system. However, it also shows that despite this, coal will continue to play a big part in world power, with emissions continuing to rise for another decade and a half, unless further radical policy action is taken,” said Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance.
New Energy Outlook focuses on five major shifts that will occur through 2040:
- Solar, solar everywhere. The further decline in the cost of photovoltaic technology will drive a $3.7 trillion surge in investment in solar, both large-scale and small-scale.
- Power to the people. Some $2.2 trillion of this will go on rooftop and other local PV systems, handing consumers and businesses the ability to generate their own electricity, to store it using batteries and – in parts of the developing world – to access power for the first time.
- Demand undershoots. The march of energy-efficient technologies in areas such as lighting and air conditioning will help to limit growth in global power demand to 1.8% per year, down from 3% per year in 1990-2012. In OECD countries, power demand will be lower in 2040 than in 2014.
- Gas flares only briefly. Natural gas will not be the “transition fuel” to wean the world off coal. North American shale will change the gas market, but coal-to-gas switching will be mainly a US story. Many developing nations will opt for a twin-track of coal and renewables.
- Climate peril. Despite investment of $8 trillion in renewables, there will be enough legacy fossil-fuel plants and enough investment in new coal-fired capacity in developing countries to ensure global CO2 emissions rise all the way to 2029, and will still be 13% above 2014 levels in 2040.
Jon Moore, chief executive of Bloomberg New Energy Finance, added, “Last year’s forecast from BNEF identified the big share that renewables would have in power investment – that raised eyebrows at the time, but other energy forecasters have since piped a similar tune. This year’s report pushes our thinking further, with updated analysis on the slowing levels of demand we are already seeing, and on the proliferation of small PV systems.”