June 15 (Renewables Now) - Renewable energy plants such as wind and solar will account for the bulk, 72%, of the money the world will spend on new power generation over the period to 2040, according to Bloomberg New Energy Finance's (BNEF) latest long-term forecast.
Of the USD 10.2 trillion (EUR 9.1trn) that will be invested in new power plants by 2040 globally, USD 7.4 trillion will be channeled to renewables, which are getting ever cheaper. According to BNEF's New Energy Outlook (NEO) 2017, solar energy costs will fall by 66% by 2040. The cost of onshore wind is expected to drop by 47% and of offshore wind to plunge by 71% in the same period.
"This year’s NEO shows an even more dramatic low-carbon transition than we have projected in previous years, with steeper drops in wind and solar costs and faster growth for storage," said BNEF chief executive Jon Moore.
According to the analysis, USD 2.8 trillion will be invested in solar by 2040 and the technology will enjoy a 14-fold jump in capacity. Wind will attract USD 3.3 trillion and expand its capacity fourfold. By 2040, the two sources combined will have a share of 48% in the world's installed capacity and 34% in electricity generation, a large increase from the 12% and 5% currently.
BNEF says that solar is already at least as cheap as coal in Germany, Australia, the US, Spain and Italy. By 2021, China, India, Mexico, the UK and Brazil will join this list.
China and India will account for a big part, 28% and 11%, respectively, of all power investment by 2040. In the Asia Pacific, just under a third of investment will go to wind and solar each, 18% to nuclear and 10% to coal and gas.
The rise of renewables is getting a boost from batteries. According to BNEF, the lithium-ion battery market for energy storage will be worth at least USD 239 billion between now and 2040.
Seb Henbest, lead author of the report, said that "the greening of the world’s electricity system is unstoppable, thanks to rapidly falling costs for solar and wind power, and a growing role for batteries, including those in electric vehicles, in balancing supply and demand."
(USD 1 = EUR 0.890)