Solar power, once so costly it only made economic sense in spaceships, is becoming cheap enough that it will push coal and even natural-gas plants out of business faster than previously forecast.
That’s the conclusion of a Bloomberg New Energy Finance outlook for how fuel and electricity markets will evolve by 2040. The research group estimated solar already rivals the cost of new coal power plants in Germany and the U.S. and by 2021 will do so in quick-growing markets such as China and India.
The scenario suggests green energy is taking root more quickly than most experts anticipate. It would mean that global carbon dioxide pollution from fossil fuels may decline after 2026, a contrast with the International Energy Agency’s central forecast, which sees emissions rising steadily for decades to come.
“Costs of new energy technologies are falling in a way that it’s more a matter of when than if,” said Seb Henbest, a researcher at BNEF in London and lead author of the report.
The report also found that through 2040:
China and India represent the biggest markets for new power generation, drawing $4 trillion, or about 39 percent all investment in the industry.
The cost of offshore wind farms, until recently the most expensive mainstream renewable technology, will slide 71 percent, making turbines based at sea another competitive form of generation.
At least $239 billion will be invested in lithium-ion batteries, making energy storage devices a practical way to keep homes and power grids supplied efficiently and spreading the use of electric cars.
Natural gas will reap $804 billion, bringing 16 percent more generation capacity and making the fuel central to balancing a grid that’s increasingly dependent on power flowing from intermittent sources, like wind and solar.
All told, the growth of zero-emission energy technologies means the industry will tackle pollution faster than generally accepted. While that will slow the pace of global warming, another $5.3 trillion of investment would be needed to bring enough generation capacity to keep temperature increases by the end of the century to a manageable 2 degrees Celsius (3.6 degrees Fahrenheit), the report said.
Renewable energy sources are set to represent almost three quarters of the $10.2 trillion the world will invest in new power generating technology until 2040, thanks to rapidly falling costs for solar and wind power, and a growing role for batteries, including electric vehicle batteries, in balancing supply and demand.
So $15.5 trillion is needed to be invested in renewables and nuclear energy to achieve the states 2 degree target.