Wind and solar are set to surge to almost 50% of world generation by 2050 on the back of precipitous reductions in cost, and the advent of cheaper and cheaper batteries that will enable electricity to be stored and discharged to meet shifts in demand and supply according to Bloomberg NEF’s New Energy Outlook (NEO) 2018.
This year’s outlook is the first to highlight the huge impact that falling battery costs will have on the electricity mix over the coming decades. BNEF predicts that lithium-ion battery prices, already down by nearly 80% per megawatt-hour since 2010, will continue to tumble as electric vehicle manufacturing builds up through the 2020s.
NEO 2018 sees US$ 11.5 trillion being invested globally in new power generation capacity between 2018 and 2050, with US$ 8.4 trillion of that going to wind and solar and a further US$ 1.5 trillion to other zero-carbon technologies such as hydro and nuclear.
This investment will produce a 17-fold increase in solar photovoltaic capacity worldwide, and a sixfold increase in wind power capacity. The levelized cost of electricity, or LCOE, from new PV plants is forecast to fall a further 71% by 2050, while that for onshore wind drops by a further 58%. These two technologies have already seen LCOE reductions of 77% and 41% respectively between 2009 and 2018.
Among the other highlights of NEO 2018 are high penetration rates for renewables in many markets (87% of total electricity supply in Europe by 2050, and 55% for the U.S., 62% for China and 75% for India).