Power generation may attract $11.4 trn over 25 yrs

The Dollar Business Bureau

Global power generation may attract around $11.4 trillion investment in the next 25 years, Bloomberg New Energy Finance (BNEF) forecasted in its New Energy Outlook 2016. Though the prices of coal and gas are likely to remain low, electricity system all over the world could gravitate towards renewable sources in the next few decades, it said.

Emerging countries would dominate in gaining huge investments in power generation through coal and gas. Over $1.2 trillion will be invested in new coal-based power plants, while $892 billion will be spent on new gas-based power plants. More than $7.8 trillion will be invested in renewable power with wind power attracting $3.1 trillion, solar power $3.4 trillion, and hydro-electric power $911 billion, the report states.

Seb Henbest, the BNEF Head of Europe, Middle East and Africa said that the green power may attract a lion’s share of investments globally during 2016-2040. More than two-thirds of the total investment in power generation will be into renewable power. But, trillions of dollars may be required to reduce the global carbon emissions to the levels close to the United Nations 2°C climate target of 450 parts per million.

Major power generating technologies may produce 1000 terawatt hours (TWh) electricity output per annum during the next 25-year period. Coal and gas prices are likely to decline 33% and 30% respectively due to excess supply. This may result in lower cost of power generation based on coal or gas, the report predicted.

According to BNEF, the power generation cost per megawatt hour (MWh) may come down 41% and 60% through onshore wind and solar photovoltaics respectively by 2040. These two technologies are likely to become the most affordable means to produce electricity in many countries during the 2030s.

Electric vehicles will boost electricity demand by 8% at 2,701TWh by 2040. The increased number of electric vehicles will bring down the price of lithium-ion batteries. The overall energy storage in batteries would drastically surge up from 400MWh in 2016 to 760GWh in 2040, making the battery storage a $250-billion market, the report anticipated.

Elena Giannakopoulou, Senior Energy Economist projected  a ‘no-more golden age’ for gas globally, except in North America. Gas will be surpassed by renewables by 2027. It will overtake coal by 2037, she added.