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Renewable energy will overtake natural gas by 2027

Lucas Mearian | June 15, 2016
But it will be another 10 years after that before renewable energy surpasses coal.

By 2040, zero-emission energy sources will make up 60% of installed capacity. Wind and solar will account for 64% of the 8.6 terawatts (trillion watts or TW) of new power capacity.

And solar and wind will account for almost 60% of the $11.4 trillion invested in energy over the next 25 years, according to a new forecast by Bloomberg New Energy Finance.

Renewable energy Bloomberg
Source: Bloomberg New Energy Finance NEO 2016 Annual electricity output in thousand terawatt hours by the major generating technologies from 2016 through 2040. Click on image to enlarge.

The "New Energy Outlook 2016" forecast charts a significantly lower track for global coal, gas and oil prices than it did a year ago. It now estimates that $7.8 trillion will be invested in renewables over the next quarter century, compared to $1.2 trillion for new coal plants -- largely in India and other Asian emerging markets.

Renewables will dominate in Europe, which will overtake the U.S. in zero-emission power generation. Wind, solar, hydro and other renewable energy plants will generate 70% of Europe's power in 2040, up from 32% in 2015.

In the U.S., renewable energy's share will jump from 14% of energy production in 2015 to 44% in 2040. Energy generated from natural gas will slip from 33% to 31%.

"One conclusion that may surprise is that our forecast shows no golden age for gas, except in North America. As a global generation source, gas will be overtaken by renewables in 2027," Elena Giannakopoulou, senior energy economist on the report, said in a statement. "It will be 2037 before renewables overtake coal."

Electric vehicles drive up power demand, drive down battery prices

The electric vehicle boom will increase electricity demand by 2,701TWh (terawatt hours), or 8% of global electricity demand in 2040. EVs will will represent 35% of worldwide new light-duty vehicle sales that year, equivalent to 41 million cars, some 90 times the number that sold last year. Coinciding with skyrocketing EV sales, small-scale battery storage will grow to be a $250 billion market, Bloomberg said.

The rise of EVs will drive down the cost of lithium-ion batteries, making them increasingly attractive to be deployed alongside residential and commercial solar systems.

"We expect [the] total behind-the-meter energy storage to rise dramatically from around 400MWh [megawatt hours or million watt hours] today to nearly 760GWh [gigawatt hours or billion watt hours] in 2040," the report said.

The term "behind the meter" refers to energy use by households and businesses.

Burlington solar panels
Burlington Electric Department Burlington, Vt. is one of a handful of U.S. cities that have already proclaimed 100% renewable energy use. Above is a 500kW solar array on the roof of the Burlington International Airport parking garage; it began commercial operation in February 2015

 

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