15 Jun Renewables continue winning the race of prices
14/06/2016 source “América Economía”
The latest long-term forecast report issued by Bloomberg New Energy Finance (BNEF), entitled New Energy Outlook 2016 (NEO) states that although gas and coal prices probably remain probably low, may not prevent the fundamental transformation of the global electric system in the coming decades in renewable sources such as wind or solar.
Compared to the projection of the last year, the report shows significantly lower global prices for coal, gas and oil, but also shows a pronounced decrease in the cost of solar and wind energy.
The NEO 2016 report brings several data, forecasts and conclusions on the generation and use of energy. On the one hand, it states that will keep the cost of gas and coal prices, reducing their long-term prognosis of 30 and 33%, respectively, reflecting a strong excess supply for both materials. This reduces the cost of power generation based on the burning of gas and coal.
On the other hand, it states that the costs of wind and solar energy will fall sharply. The costs of generation per MWh will fall, until 2040, 41% regarding the offshore wind energy and 60% regarding the photovoltaic, converting these two technologies in more cheap sources to generate electricity in many countries during the decade of 2020 and the rest of the world from 2030 on. In addition, renewables will take a good part of investment. Near 7,8 billion Dollars will be invested in green energy; marine and terrestrial wind will attract 3,1 billion Dollars; solar energy sources for public service, in terraces and other small-scale sources will take 3,4 billion; and hydro-electric, 911 million Dollars.
On fossil fuels, the report states that they attract 2,1 billion Dollars, as the investment in gas generation and coal will continue predominantly in emerging economies. About 1.2 billion Dollars will be used to develop new capacity for coal generation, and 892,000 million in new plants to burn gas.
So the plan of fossil fuels will require a lot more money. Over 7,8 billion, for 2040 the world would need to invest another 5,3 billion Dollars in zero-carbon energy to prevent the CO2 level in the atmosphere grow above the “safe” level of 450 parts per million set by the Inter-Governmental Climate Change Panel.
The NEO 2016 refers on the other hand will increase the demand for electricity due to the proliferation of electric cars. Electric vehicles will involve 2,701 TWh, is is to say 8% of the global electricity demand by 2040. According to the forecast, these cars represent 35% of global sales of new light vehicles for that year, equivalent to 41 million cars, 90 times sales 2015.
Regarding storage in small-scale batteries, the market is valued at 250 billion Dollars. Electric vehicles will drag down the cost of lithium ion batteries, promoting their installation in residential and commercial solar systems. The total storage will strongly increase from 400MWh to almost 760 GWh in 2040.
The prognosis, covering the period 2016-2040, reports news about carbon emissions. A lower GDP growth in China and a rebalancing of its economy mean that emissions in this country will reach a peak in 2025. However, India and other Asian emerging markets, the rising of the power generation through coal indicates that for 2040 global emissions will meet close to 700 megatons, it is to say 5% above 2015 levels. On the other hand, in China the generation based on coal will follow a weaker trend than what was projected. The changes in the Chinese economy, and the move towards renewables, will mean that in ten years, the coal-based generation will be 1,000 TWh, or 21% less, comparing the amounts forecasted by BNEF in the NEO report of 2015.
India is a key country for the future trend of global emissions. It was stated that their electricity demand will grow 3,8 times between 2016 and 2040. While investing 611,000 million dollars in renewable energy and 115 billion Dollars in nuclear energy in the next 24 years, the country will continue to rely heavily on coal to cover their demand. This is expected as a result of a tripling in its annual emissions in the electricity sector in 2040.
Seb Henbest, Head of BNEF for Europe, Middle East and Africa, and lead author of the NEO 2016 report commented that “near 7,8 billion Dollars will be invested globally in renewable energy between 2016 and 2040, with two-thirds of that for investment the generation capacity, but it will take billions more Dollars to align global emissions with the order to follow the objective “2 degrees Celsius” if the Unites Nations “.
Thus, it is concluded that renewable energy will dominate in Europe and will overcome the gas in the United States. Wind, solar and hydro-electric plants will generate 70% of energy in Europe in 2040, up from the 32% projected in 2015. In the United States, this percentage will grow from 14% in 2015 to 44% in 2040, while the gas will drop from 33% to 31%.