Coal is dying, and total global greenhouse gas emissions from electrical generation will peak in 2026, according to a bullish report released Thursday by respected independent energy consultants.
Driven by plummeting solar and wind power prices, renewable energy projects are on the march worldwide. Of the $10.2 trillion the world will invest in new power generating technology from now until 2040, a stunning three-quarters will be in renewable energy, the report forecasts. As a result, wind and solar will jump to 34 percent of electricity generation worldwide by 2040, compared with just 5 percent now, the report says.
"This year's report suggests that the greening of the world's electricity system is unstoppable," said Seb Henbest, lead author of the New Energy Outlook forecast. The report is published annually by Bloomberg New Energy Finance (BNEF), an independent energy research firm, and is based on eight months of analysis and extensive market modeling.
This year's report significantly raises BNEF's estimates for the speed of the global greening of energy.
For example, BNEF expects India's emissions will be 44 percent lower by 2040 than it estimated in 2016. However, it is important to note that, even at this advanced pace, the transition is not yet happening fast enough to keep the average temperature of the planet from rising by 2 degrees Celsius, the internationally agreed limit. "A further $5.3 trillion investment" in zero-carbon capacity is needed for that, the report says.
Yet, there is some hope that the report may still be underplaying the pace of transition to green energy. That's because the analysis is based purely on announced projects in each country and assumes that current subsidies will expire and that energy policies around the world will remain on their current bearing. It is possible in the United States that market conditions for renewable energy could improve in the future. For example, wind subsidies, which are popular even among Republicans, may be renewed.
The report directly addresses concerns that the Trump administration seems determined to preserve coal. The authors argue that the effort will fail—coal's prices will be so uncompetitive that coal-fired power will drop by 51 percent by 2040, they say.
Natural gas, which is cheap in the U.S., will continue to grow alongside renewables, though, and slow the U.S. transition away from fossil fuels compared with other countries. BNEF predicts renewable energy will reach 74 percent penetration in Germany by 2040, 55 percent in China and 49 percent in India, but only 38 percent in the U.S.
Around the world, solar has become a formidable opponent to coal, BNEF said. That's because the price of solar, which already costs roughly one-fourth of what it did in 2009, is forecast to drop another 66 percent by 2040. "Solar is already at least as cheap as coal in Germany, Australia, the U.S., Spain and Italy," BNEF said. "By 2021, it will be cheaper than coal in China, India, Mexico, the U.K. and Brazil, as well."
Coal power generation in China has been growing but will reach a peak in 2026, the report says. Already, many planned coal plants are being cancelled.
Wind costs are also dropping fast. Offshore wind costs are falling faster than onshore and are expected to skid 71 percent by 2040. Land-based wind energy, which has already dropped by 30 percent in the last eight years, will continue to fall by 47 percent by 2040, the report says.
The BNEF report also forecasts that:
- Batteries will grow and boost the solar industry: the lithium-ion battery market will be worth at least $239 billion by 2040. The cost of lithium-ion batteries will be down 73 percent by 2030. Utilities will use batteries to lessen their reliance on natural gas to provide power during evening peak demand. Households and businesses will also increase their use of batteries and will account for 57 percent of storage worldwide by 2040.
- Electric vehicles will become more popular and will help balance peak demand on the grid. EVs will recharge when renewable energy sources are generating power and wholesale prices are low, thus helping the system adapt to intermittent solar and wind.
- Homeowners' love of solar will continue to grow. By 2040, rooftop solar will account for as much as 24 percent of electricity in Australia, 20 percent in Brazil, 15 percent in Germany, 12 percent in Japan, and 5 percent in the U.S. and India.