In its latest annual New Energy Outlook, BNEF looks ahead to 2040 — when it claims more than half of the world’s energy will be carbon-free.
But though it expects solar to boom, natural gas not to, and energy efficiency to massively improve, BNEF’s still sees global temperatures rising by more than 2 degrees.
Here are the key trends in the global energy transition, as told by Bloomberg.
1) Natural gas will not be the coal-to-renewables transition fuel
Emboldened by the stateside success of shale, Big Oil and Gas have gone all-out in recent months pitching natural gas as the bridge fuel from dirty cheap coal to renewables.
But Bloomberg doesn’t see this strategy panning out. Coal-to-gas will be a US phenomenon, with developing nations likely to opt instead for “a twin-track of coal and renewables”.
BNEF predicts that 1,359GW of gas capacity will be added around the world by 2040 — that’s only marginally more than the coal capacity it expects to be installed over that same period.
2) Solar’s time has arrived
The renewables revolution is well-and-truly happening, and Bloomberg says it’s all down to economics (not politics, thank you very much).
Wind power, already the cheapest new generation capacity in Europe, Australia and Brazil, will be 32% less costly by 2040.
But the real success story will be solar. According to BNEF, the cost of utility photovoltaic power will have fallen 48% by 2040, having displaced wind as the most cost-effective source at least ten years earlier. It’ll basically be solar vs coal in developing countries.
Take into account small-scale installations as well, and solar really promises to be the energy source of the next 25 years. Its 3,429GW of new capacity will account for 35% of energy additions around, and it’ll get nearly a third of global investment.
3) Energy efficiencies will drive down power demand in developed countries
Developing countries will be behind most of the new capacity, with Bloomberg predicting it to add three times as much as their developed country counterparts. And around half of that 7,460GW will come from renewables.
In OECD countries, largely due to energy efficiency measures, power demand will actually be lower in 2040 than it was last year.
4) Power sector CO2 emissions won’t peak till 2030
Fossil fuels aren’t going anywhere fast, however. Despite the rise of renewables, 44% of the world’s power will be fossil fuelled – though that’s a marked decline from two-thirds in 2014.
Carbon dioxide emissions will rise by 13% in the next 25 years as developing countries utilise dirty cheap coal, probably without proper regulation.
Bloomberg sees power sector carbon emissions peaking around 2029 at 15.3Gt, falling slightly to 14.8Gt in 2040.