This year’s forecast New Energy Outlook 2017 (NEO2017) from Bloomberg New Energy Finance (BNEF) sees solar energy costs dropping a further 66% by 2040, and onshore wind by 47%, with renewables undercutting the majority of existing fossil power stations by 2030.

Solar and wind dominate the future of electricity. BNEF expects US$7.4 trillion to be invested in new renewable energy plants by 2040 – which is 72% of the US$10.2 trillion that is projected to be spent on new power generation worldwide. Solar takes $2.8 trillion and sees a 14-fold jump in capacity. Wind draws $3.3 trillion and sees a fourfold increase in capacity. As a result, wind and solar will make up 48% of the world’s installed capacity and 34% of electricity generation by 2040, compared with just 12% and 5% now. Offshore wind levelized costs will slide a whopping 71% by 2040, helped by development experience, competition and reduced risk, and economies of scale resulting from larger projects and bigger turbines. The cost of onshore wind will fall 47% in the same period, on top of the 30% drop of the past eight years, thanks to cheaper, more efficient turbines and streamlined operating and maintenance procedures.

China and India account for 28% and 11% of all investment in power generation by 2040. Asia Pacific sees almost as much investment in generation as the rest of the world combined. Of this, just under a third goes to wind and solar each, 18% to nuclear and 10% to coal and gas.