The New Energy Outlook Report release by analysts at Bloomberg’s New Energy Finance (BNEF) documents the transition of energy resources from the current dominance of fossil fuels and gas to renewables of solar and wind energy. The report is based on information from 65 in-house experts at Bloomberg and 12 countries who worked on the report.
More deployment, an increase in innovations in manufacturing and demand for renewable energy worldwide, has resulted in an accelerated reduction in cost of technologies underpinning the move away from ‘traditional’ energy resources.
This will be further supported by battery technology which will increase the variability of solar and wind power, facilitating power come rain or shine or even when the wind isn’t blowing, enabling a rapid transition over the next 30 years to a very different energy system.
The anticipated reduction in price of these renewables is set to undermine the economics of new gas plants and other traditional resources like coal and fossil fuels, will cut into the market share of established fossil fuels the world over. Solar and wind prices are expected to drop by 71% and 50%, respectively by 2050, disrupting the economics of traditional energy resources.
This trend is also facilitated by the increase in demand for electric cars which in turn spurs manufacturing of lithium-ion systems, driving down battery prices and making them increasingly viable on the grid.
Investment in batteries is anticipated to be $548 billion which will increase the demand of homes and businesses for clean energy.
Global investments in energy storage
The BNEF analysts anticipate that 73% of investment into the power sector for generation in the next 30 years will be into wind and power. That is 73% of $11.5 trillion, opening up opportunities for investors to take advantage of this new energy system.
“It’s a matter of ‘when and how’ and not ‘if’ wind, solar and battery technologies will disrupt electricity delivery all over the world,” Seb Henbest, lead author the report, said in an interview.