Renewables projected to overtake coal and natural gas power

Renewable energy is fast growing as the prices of solar and wind have seen substantial reduction in the past few years. 2015 was a landmark year for renewable energy as its share in the global energy mix grew at its highest annual rate with the addition of an estimated 147 GW of renewable power capacity.

Although presently, renewable electricity generation (excluding hydro), accounts for nearly 8% of global electricity generation they play a significant role in the growth of electricity, contributing almost 40% of the growth in global power generation in 2016 (BP Statistical Review of World Energy 2017). The world now adds more renewable power capacity annually than it adds (net) capacity from all fossil fuels combined.

This trend is expected to continue as Bloomberg New Energy Finance projects in its New Energy Outlook 2017 that by 2040 renewables will capture 72% of the $10.2 trillion investment in power generation.

Investment by technology, 2017-40

Screen Shot 2017-07-05 at 12.48.03 PM

Source: Bloomberg New Energy Finance

         Global Installed Capacity 2016                    Global Installed Capacity 2040

Screen Shot 2017-07-05 at 9.29.54 PM

Source: Bloomberg New Energy Finance

The global cumulative installed capacity in 2016 was 6,917 GW, out of which 1,949 GW (29%) came from renewables (including hydro). However, it is predicted, as shown in the figure above, that by 2040, the share will increase to 58% (7,470 GW). In the same period, shares of coal and gas is expected to decrease from 30% to 13% and from 24% to 14% respectively.

Prices of renewable energy technologies are expected to decrease by more than half in the next ten years, driven by sustained technological improvements and economies of scale. BNEF predicts that the cost of solar power will still drop another two-thirds, onshore wind costs will be cut nearly in half, and offshore wind costs will drop a stunning 71 percent.

 

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