The grid will get flipped upside down over the next three decades.
Roughly two thirds of the world's power will come from renewable resources by 2050 and only one third will come from traditional sources like coal and natural gas, said Seb Henbest, an analyst at Bloomberg New Energy Finance during a presentation of the firm's NEO 2019 forecast in San Francisco this week. That's a complete reversal of today's situation with only one third coming from renewables and the rest from traditional sources.
Solar and wind will be the big winners. 48% of power worldwide will come from those sources by then with power demand surging on a global basis by 62%.
A shift to solar and wind, of course, will reverberate across the entire supply chain. Because solar and wind are intermittent sources, power capacity will have to grow faster than demand. Henbest in fact predicts capacity will increase three times by 2050. Battery demand likewise will soar to support the grid and power EVs.
And all the extra solar capacity will mean a change in the supply-demand curve. Rather than peak in the late afternoon, and giving the curve a duck shape, it will move to the middle part of the day, with solar panels cranking out early afternoon power and EVs or storage systems soaking it up. See inept photo of how that might look:
Some of the other interesting tidbits in the report:
- $13.3 trillion -yes, trillion with a "t" - will be invested in 15,145 GW of new power capacity over the next 32 years while another 83% will be dedicated to zero carbon technologies.
- An additional $11.4 trillion, meanwhile, will be put into transmission and distribution. $843 billion gets invested in batteries. (Did I mention the PI System is used by over 1,000 utilities? Sorry about the oversight.)
- Solar's share of worldwide power generation grows from 2% today to 22% in 2050. Price plays a big role. Solar has dropped 85% in price since 2010 and will drop another 63% by then.
- Wind is down 49% since 2010 thanks in part to longer blades and technologies that have increased capacity factor.
- Five years ago, only 1% of the world lived in places where wind and/or solar were cheaper than new sources of traditional power. Now, 2/3rds of the world lives in such zones. By 2050, up to 80% of Europe's power could come from wind and solar. Intermittency and availability, however, remain issues.
- Batteries and storage can help solve that. Batteries have declined in price by 85% since 2010. (In fact, EVs replaced electronics as the main consumer of lithium batteries last year.) Still, if you look toward the right side of my second inept photo, you'll see that adding storage to onshore wind ranges the price range today from $27-$59 per megawatt hour to $40 to $114.
- Gas will continue to grow as well, particularly in the U.S. Overall global gas capacity will increase by 37% with 506GW of new plants. Peaker plant capacity will grow by 350% to exceed 1TW by 2050. (If you find yourself in a debate whether batteries will eliminate demand for peakers, there's your answer.)
- India's coal demand peaks in 2038. It will be the last major economy to hit peak coal.
- Air conditioning demand grows by 93% in emerging nations and will account for 12.7% of worldwide demand. (See how Tabreed is helping make AC more efficient.)
And I could go on. But better yet, download the report here.