Steep declines in wind, solar and battery technology costs could lead to 48% of the global grid being powered by these renewable energy sources by 2050, up from 7% currently, according to a report from researchers BloombergNEF.
The report – ‘New Energy Outlook 2019’ – said electricity demand is set to increase 62%, resulting in global generating capacity almost tripling between 2018 and 2050.
Expansion will attract $13.3 trillion in new investment, of which wind will take $5.3 trillion and solar $4.2 trillion.
A further $840bn will go to battery storage and $11.4 trillion to grid expansion, BloombergNEF said.
It added that the report compares the costs of competing technologies through an analysis of the levelized cost of energy.
BloombergNEF said that in approximately two-thirds of the world, wind or solar now represent the least expensive option for adding new power-generating capacity
The two technologies will be capable of reaching 80% of the electricity generation mix in a number of countries by mid-century, with the help of batteries, it said.
However, going beyond 80% will be difficult and will require other technologies to play a part – such as nuclear, biogas-to-power, green hydrogen-to-power and carbon capture and storage.
The report’s lead analyst Matthias Kimmel said: “By 2030, the energy generated or stored and dispatched by these three technologies will undercut electricity generated by existing coal and gas plants almost everywhere.”
Analysis in the report also indicated that coal’s role in the global power mix falling from 37% today to 12% by 2050, while oil as a power-generating source is virtually eliminated.
The report added that projected growth of renewables through 2030 indicates that many countries can follow a path for the next decade and a half that is compatible with keeping the increase in world temperatures to 2 degrees Celsius or less.
This can be achieved without introducing additional direct subsidies for existing technologies such as solar and wind, it added.
BloombergNEF head of energy economics Elena Giannakopoulou said: “The days when direct supports such as feed-in tariffs are needed are coming to an end
“Still, to achieve this level of transition and decarbonization, other policy changes will be required – namely, the reforming of power markets to ensure wind, solar, and batteries are remunerated properly for their contributions to the grid.”
Europe will decarbonize its grid the fastest with 92% of its electricity supplied by renewables in 2050.
Asia’s electricity demand will more than double to 2050, with Asia-Pacific alone attracting almost $5.8 trillion to meet that rising demand.
China and India together are a $4.3 trillion investment opportunity, the report added, while the US will see $1.1 trillion invested in new power capacity, with renewables more than doubling its generation share to 43% in 2050.