World to invest USD 7.8trn in renewables by 2040 - BNEF

About USD 7.8 trillion (EUR 6.9trn) will be invested in renewable power worldwide in the 2016-2040 period, according to Bloomberg New Energy Finance's (BNEF) latest long-term forecast, released today.

Of that, USD 3.1 trillion will be invested in onshore and offshore wind capacity. Utility-scale, rooftop and other small-scale solar will attract USD 3.4 trillion of investment, while USD 911 billion will be spent on hydropower.

Renewables will account for the bulk of the investment in all power generating capacity over the 25-year period, which is estimated at USD 11.4 trillion. The analysis, New Energy Outlook 2016, forecasts that USD 2.1 trillion will be invested in fossil fuel power, mainly in emerging economies, with some USD 1.2 trillion to be spent on new coal-burning capacity and USD 892 billion on new gas-fired plants.

BNEF has reduced significantly its long-term forecasts for coal and gas prices but said that renewables still won the race on costs. The levelised costs of generation per MWh for onshore wind and photovoltaics (PV) will drop by 41% and 60%, respectively, by 2040. As a result, these two technologies will be the cheapest for power generation in many countries during the 2020s and in most of the world in the 2030s, according to the report.

In 2040, Europe will produce 70% of its power from renewables, up from 32% in 2015. In the US, the share of renewables will grow to 44% from 14% in 2015.

"As a global generation source, gas will be overtaken by renewables in 2027. It will be 2037 before renewables overtake coal," said Elena Giannakopoulou, senior energy economist on the report.

In spite of the undeterred shift to renewables, however, an additional USD 5.3 trillion of investment in zero-carbon power -- on top of the USD 7.8 trillion expected -- will be needed by 2040 to keep the world on track for the 2 degrees Celsius climate target, said BNEF.

Another key finding of the report is that small-scale battery storage will be a USD-250-billion market. BNEF projects that behind-the-meter energy storage will surge to nearly 760 GWh in 2040 from around 400 MWh in today.

(USD 1.0 = EUR 0.887)

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