Washington — The world’s energy portfolio will get vastly cleaner by the year 2040, says a new long-term energy outlook from Bloomberg New Energy Finance — but not clean enough.
Out to 2040, the world will see a jaw-dropping growth of solar energy, especially on rooftops. BNEF projects $3.7 trillion of solar investment in the next 25 years — 35 percent of new electricity-generating capacity. And $2.2 trillion of that investment will be for individual rooftops or other “local” installations, rather than large utility-scale arrays.
If you’re worried about the climate, however, then coal doesn’t decline nearly fast enough as part of the world mix in this scenario. Fossil fuels will still provide 44 percent of our power in the projection, as an armada of new coal plants come online to provide cheap power in developing nations, according to BNEF.
“When you aggregate it up globally, we have emissions that are 13 percent higher than they are today” from the power sector, says Seb Henbest, who is the report’s lead author and heads up Europe, Middle East and Africa analysis for Bloomberg New Energy Finance.
Indeed, the report projects that global greenhouse gas emissions from power generation will actually keep on rising all the way out to 2029.
The outlook’s methodology focuses on projecting economic and technological trends without assuming new policy interventions. So it doesn’t take into account the EPA’s expected (but not finalized) Clean Power Plan, or any new subsidies for solar energy.
“It’s really looking at the fundamental economics of these technologies, what is the cheapest way to generate electricity, and to satisfy the needs” of the world’s growing population, said Henbest.
However, the result does not look all that different from a recent International Energy Agency (IEA) analysis, which did take into account countries’ expected energy policies and announced emissions targets ahead of a 2015 U.N. global climate meeting in Paris. That report projected an 8 percent increase in overall energy related greenhouse gas emissions by 2030, again because of new coal additions around the world.
And like the new Bloomberg New Energy Finance report, the IEA finds that — barring further, major steps — the world will therefore miss the widely accepted international target of keeping global warming below 2 degrees Celsius above pre-industrial levels.
“Too much coal ends up running for too long, if you’re going to achieve decarbonisation targets that keep us within a 2 degree limit,” says Henbest. “And the reason they keep running is that there’s nothing to really make them turn off. We’re still adding coal all the way out to 2040 in our forecast, because it’s a cheap way for developing countries to add electricity to their mix.”
The solar side of the forecast nevertheless does appear utterly revolutionary — and again, it’s driven simply by technology and economics, not policy. Solar will spread around the world — often paired with battery or other energy storage technologies — simply because it’s compelling, and because technology costs will continue their plunge.
Wind will also thrive as costs decline, plunging 32 percent over the next 25 years. Meanwhile, a further decoupling of economic growth from the growth of greenhouse gas emissions will ensue, projects Bloomberg New Energy Finance — with an actual decrease in power demand in OECD countries, thanks to much greater energy efficiency.
Overall, the new report adds to a growing consensus that when it comes to energy, the world is moving in the right direction, and with considerable momentum — but still not fast enough.