Published on April 25th, 2013 | by Joshua S Hill3
Annual Renewable Energy Investment Set To Sky-rocket By 2030
The next 15 years and more are going to be interesting ones for the renewable energy industry, as the cost of manufacturing and installation drop and the public face of fossil fuels continues to be tarnished. Specifically, the rising popularity and efficiency of wind and solar energy will push the renewable energy industry as a whole into a new era of prominence.
This record growth — up even on last year’s scenarios released by Bloomberg New Energy Finance — is attributed to improvements in the cost-competitiveness of wind and solar technologies when compared specifically to the relative fossil fuel alternatives, as well as increased implementation of non-intermittent sources of clean energy like hydro, geothermal, and biomass.
“The news right now is dominated by stories of pain caused by overcapacity on the supply side of clean energy, and the lure of cheap shale gas,” Michael Liebreich, chief executive of Bloomberg New Energy Finance said. “But this is playing out against the falling costs of renewable energy and of all the technologies required to integrate it into our energy system, and falling costs win. What it suggests is that we are beyond the tipping point towards a cleaner energy future.”
The research was presented by Bloomberg New Energy Finance at their sixth annual Summit, in New York and published thereafter.
Specifically, the research stems from Bloomberg New Energy Finance’s Global Energy and Emissions Model, “which integrates all of the main determinants of the energy future, including economic prosperity, global and regional demand growth, the evolution of technology costs, likely developments in policies to combat climate change, and trends in fossil fuel markets.”
From this model came three separate scenarios: “New Normal”, “Barrier Busting” and “Traditional Territory”. Of the three, Bloomberg New Energy Finance analysts believe that ‘New Normal’ is the most likely scenario to play out over the next seventeen years. It is from this scenario that we are presented with the possibility of a 230% growth in annual investment by 2030, culminating in a $630 billion per year investment. That amounts to more than three times the investment which was seen in 2012, and is 35% higher than figures produced in Bloomberg New Energy Finance’s last global forecast a year ago. Subsequently, total installed renewable energy capacity by 2030 is expected to be 25% higher than last year’s forecast, settling in at 3,500 GW.
Bloomberg New Energy Finance’s projections for the power sector show that 70% of new power generation capacity added between 2012 and 2030 will be from renewable technologies (which, for this report, includes large hydro). By that time, coal, gas, and oil will only make up 25% of new power generation capacity.
Looking specifically at wind and solar, Bloomberg New Energy Finance predict that they will take up the largest shares of new power capacity added, accounting for 30% and 24% respectively.
In terms of existing power generation capacity by 2030, analysts believe that renewable technologies will account for 50%, up from 28% currently running in 2012. Looking specifically at power produced, renewables’ share will increase from 22% in 2012 to 37% in 2030. Finally, the ‘New Normal’ scenario projects that biofuel production in 2030 will have increased by 200%, up from 120 billion litres in 2012 to 370 billion litres in 2030.
“This is the first time we have produced such detailed analysis of the future world energy system under different scenario,” said Guy Turner, head of economics and commodities for Bloomberg New Energy Finance. “It highlights that, in spite of the recent news showing a downturn in clean energy investment since 2011, renewable technologies will form the anchor of new generating capacity additions, even under a less optimistic view of the world economy and policy choices.”
“The main driver for future growth of the renewable sector over this timeframe is a shift from policy support to falling costs and natural demand. Our work also highlights, however, the importance of planning for the integration of intermittent renewables into the grid and into power markets. This will require significant new investment in grid infrastructure, load management and storage technologies.”
By 2030, large hydro will hold sway as the largest form of clean energy production, while coal-fired electricity will fall regardless of which scenario you look at. Wind and solar will account for 12% and 6% respectively.
There is not much to be said about the remaining two scenarios:
- the ‘Barrier Busting’ scenario sees capital requirements for renewable energy reaching $880 billion by 2030, which would require an additional $2 trillion invested into supporting infrastructure
- the ‘Traditional Territory’ scenario is not as optimistic, seeing renewable energy investments increase to $470 billion by 2030.
Bloomberg New Energy Finance’s Summit, ‘The Future of Energy’, ran from Monday to Wednesday and included speakers such as Ban Ki-Moon, the United Nations Secretary-General, Tony Fadell, Founder and Chief Executive Officer of Nest Labs, and John Wellinghoff, the Chairman of the US Federal Energy Regulatory Commission. More information about the summit can be found here.