Bloomberg predicts 34% global renewable energy use by 2040

New Energy Outlook 2017.Image: New Energy Outlook 2017

Bloomberg’s New Energy Outlook 2017 (NEO) report says renewable energy generation will account for a third of the world’s power by 2040.

The NEO outlook says wind and solar will account for 48% of installed capacity and 34% of electricity generation world-wide by 2040. It compares this to just 12% and 5% respectively in use today.

The report says Australia’s electricity grid will be one of the most decentralised in the world.

“By 2040, around 45% of Australia’s power generating capacity is located behind-the-meter,” predicts NEO’s executive summary.

“Its fossil-fuel dominated grid also transforms into a predominantly renewable system, as wind, PV and batteries replace retiring coal.”

Rooftop PV and batteries play a major role by 2040

By 2040 NEO predicts renewable energy reaching 74% penetration in Germany, 38% in the US, 55% in China and 49% in India. Batteries and new sources of flexibility will “bolster the reach of renewables”.

Bloomberg's New Energy Outlook 2017

Bloomberg’s New Energy Outlook 2017 report predicts great things for solar. Image: Bloomberg

Consumer-driven PV will play a significant role in the power sector. By 2040, the rooftop solar share of electricity generation will be:

  • 24% in Australia
  • 20% in Brazil
  • 15% in Germany
  • 12% in Japan, and
  • 5% in the US and India

Battery storage will also contribute to the dominance of renewables in the future. NEO predicts that batteries in consumer PV systems will account for 57% of storage capacity worldwide by 2040.

Meanwhile, lithium-ion batteries for energy storage will become a $20 billion per year market by 2040 – beating today’s use by a factor of ten.

Investment in renewables will drive down cost

 $10.2 trillion US will be invested in renewable energy generation capacity worldwide to 2040. Of this, 72% goes to renewables, while investment in renewable energy increases to around $400 billion per year by 2040.

NEO expects the cost of new electricity from solar PV to drop 66% by 2040. “By then, a dollar will buy 2.3 times as much solar energy than it does today,” the report states. It added that the cost of new electricity from onshore wind will drop 47% by 2040.

By 2030, NEO says wind and PV will be undercutting coal, hastening its decline: “Only 35% of new coal power plants that are in planning ever get built.”

This year’s NEO report incorporates dynamic electric vehicle charging and lithium-ion peaker batteries.