Although the news is currently dominated by the lure of natural gas and the growing pains of renewable energy caused by overcapacity and uncertain policy support, in the end, falling costs of renewable energy … will win.
"This suggests that we are beyond the tipping point towards a cleaner energy future," says Michael Liebreich, CEO of Bloomberg New Energy Finance.
Improvements in cost-competitiveness means that renewables will account for 69%-74% of all new power capacity added by 2030 worldwide, despite current difficult market conditions, Bloomberg New Energy Finance concludes in their latest research.
The main driver for future growth of renewables through 2030 will be a shift from policy support to falling costs and natural demand, they say.
This highlights the importance of planning for the
integration of intermittent renewables into the grid and into power markets, which requires significant investment in grid infrastructure, load management and storage technologies.
To come up with projections for world energy markets to 2030, they looked at a wide range of factors, including economic prosperity, global and regional demand growth, the evolution of technology costs, likely developments in policies to combat climate change, and trends in fossil fuel markets.
Out of three scenarios, the firm thinks "New Normal" is more likely than "Barrier Busting" or "Traditional Territory."
Under the New Normal scenario, $630 billion will be invested in new clean energy assets in 2030, reaching 3500 gigawatts, triple that of 2012.
70% of new capacity for power generation will be from renewables between 2012-2030 (including large hydro), 25% from coal, gas or oil, and the remaining 5% from nuclear.
Wind and solar will have the largest share of this growth, with 30% and 24% respectively. By 2030, renewable technologies will account for
50% of new power generation capacity installed around the world, up from 28% in
2012. In terms of power produced, the share of renewables will increase from
22% in 2012 to 37% in 2030.
"This is the first time we have produced such detailed analysis of
the future world energy system under different scenarios. It highlights that,
in spite of the recent news showing a downturn in clean energy investment since
2011, renewable technologies will form the anchor of new generating capacity
additions, even under a less optimistic view of the world economy and policy
choices," says Guy Turner, head of economics and commodities for Bloomberg New Energy Finance.
New solar and wind plants are already cheaper than new coal plants.
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