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Fueled by cheap battery costs, wind and solar power are poised to produce nearly 50% of the world's electricity by 2050, according to a Bloomberg New Energy Finance report released Tuesday.
Why it matters: Renewable energy is getting cheaper as its technologies reach greater economies of scale. Notable this year are the falling prices for batteries that store energy generated by the wind and sun, which have become cheaper and easier to implement than previously forecast.
The thing that caught us most off guard is battery prices coming down so much in the short term. You can only build so much wind and solar if you don’t have storage.— BNEF head of policy analysis Ethan Zindler
Other big takeaways:
- The average cost of a solar plant is due to fall by 71% by 2050.
- Coal, which provides 38% of the energy supply worldwide today, will fall dramatically to 11% in 2050, even while holding strong in some countries.
- Natural gas consumption for the power sector remains flat out to 2050.
- Electric vehicles (mostly buses in China) are set to increase electricity demand significantly: nearly 10% by 2050.
What to watch:
- Significant breakthroughs could occur in other technologies, including carbon capture, fuel cells and nuclear reinvestments, all of which could impact the electricity mix, Zindler said. These technologies need more research, funding and better design before they could be deployed on a large scale, he added.
- Less glamorous, but also possible, is a significantly greater scale for existing renewables — namely wind and solar. Zindler said to watch out for a tipping point that is coming soon: when it becomes cheaper to build a new renewable plant than to maintain one running on fossil fuels.
Yes, but: Like all forward-looking studies, this report is inherently based upon unpredictable factors with the economy, politics and technological breakthroughs. BNEF is also often considered to be a bit more ambitious in its forecasts than other research entities.