As the cost of energy storage continues to fall, the renewable energy trend will accelerate, and coal will get pushed out of the power generation picture. That sounds simple enough, right? Wrong! According to a new report, even if coal goes way down, global emissions from power plants will continue to creep up. So, what’s the problem?
First, The Good News About Energy Storage
There’s no real mystery behind the energy storage angle. Wind and solar do not provide for a reliable 24/7 stream of electricity. So, no matter how cheap these renewables get, some kind of energy storage is needed.
And, the cheaper the storage, the better your chances of leveraging more wind and solar into the grid.
The new report is from Bloomberg New Energy Finance, titled “New Energy Outlook 2018.” It charts a course for wind and solar to account for 50% of global power generation by 2050, pushed along by a steep drop in the cost of batteries.
So far, the falling cost of wind and solar has been due mainly to technology and “soft” cost improvements. The acceleration of the energy storage market will have a ripple effect that helps drive down the cost of renewables even more. BNEF foresees $8.4 trillion in new wind and solar generation capacity added globally through 2050, contributing to this forecast:
The levelized cost of electricity, or LCOE, from new PV plants is forecast to fall a further 71% by 2050, while that for onshore wind drops by a further 58%. These two technologies have already seen LCOE reductions of 77% and 41% respectively between 2009 and 2018.
One important factor in all this is lithium-ion batteries, which will benefit from investor interest and economies of scale as the electric vehicle market takes off.
BNEF forecasts that approximately half of EV charging will be on a demand-response basis, meaning that owners will time their charging cycles when there is an ample supply of low cost wind and solar available. In effect, EVs will act as mobile renewable energy storage units.
Here’s the scenario from BNEF:
BNEF predicts that lithium-ion battery prices, already down by nearly 80% per megawatt-hour since 2010, will continue to tumble as electric vehicle manufacturing builds up through the 2020s.
BNEF also notes the role of investor interest:
We see $548 billion being invested in battery capacity by 2050, two thirds of that at the grid level and one third installed behind-the-meter by households and businesses.
Flow batteries are a whole ‘nother species of energy storage technology that is heading in the mainstream direction. Also in that category is power-to-gas, which uses renewable hydrogen as a storage medium for excess wind and solar energy.
Now For The Bad News
All of this activity in clean tech will push the share of coal for global power generation down to a measly 11% — a far cry from the 38% share it enjoys now.
The problem is that BNEF forecasts a total of $11.5 trillion invested in new power generation capacity through 2050. Wind and solar get the lion’s share at $8.4 trillion, and other zero emission sources (mainly hydropower and nuclear) chip in with another $1.5 trillion.
That still leaves the tidy sum for other investments including new natural gas capacity. That’s where BNEF sees things getting sticky:
Even if we decommissioned all the world’s coal plants by 2035, the power sector would still be tracking above a climate-safe trajectory, burning too much unabated gas. Getting to two degrees requires a zero-carbon solution to the seasonal extremes, one that doesn’t involve unabated gas.
How To Abate Unabated Gas
One important thing to note about the report is that it forecasts a trajectory based on current policies. In other words, it’s a warning that the renewable energy transition is not robust enough under current policies.
The picture could change dramatically one way or the other, depending on where the political winds blow.
Here in the US, for example, the oil and gas industry has been openly lobbying against coal for domestic power generation, which is nice, but it is also aggressively pursuing the export market and it just launched a significant new effort to open up the US Atlantic coast for new oil and gas drilling.
The state of play right now could go either way. On the plus side, state-level opposition is strong. US President* Trump’s own Department of Energy has even contributed some useful leverage to the opposition, by continuing to invest in Obama-era initiatives aimed at developing Atlantic coast offshore wind farms.
CleanTechnica is reaching out to BNEF for some additional insights on the situation for natural gas in the US, so stay tuned for that.
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Photo (screenshot): via BNEF.
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