Cost-effective battery storage will "fundamentally reshape the electricity system," keying a transition of the global power mix to two-thirds renewables by 2050 from two-thirds fossil fuels in 2017, Bloomberg New Energy Finance forecast in a new report. However, gas-fired generation will remain a key source of energy for decades to come.
"It is a matter of 'when and how' not 'if' wind, solar and battery technologies will disrupt electricity delivery all over the world," the clean energy research firm said in its 2018 New Energy Outlook released June 19. Wind and solar alone will account for 50% of global electricity by 2050; nevertheless, "there are limits to what renewables and batteries can do together, and this makes peaking gas critical," according to the report, as even renewable energy-dominated grids will require additional gas back up during the extremes such as when wind and solar output is minimal.
Coal, meanwhile, will emerge as "the biggest loser," dropping to 11% of global power generation by 2050 from roughly 38% in 2018, the report's authors said. New wind and solar farms already beat the cost of building new natural gas and coal power plants in major markets such as the U.S., India and China, and they are closing in on the costs of operating existing fossil fuel-fired power plants, the analysts added. This "second" tipping point will hit China's coal fleet and the U.S. gas fleet in about a decade, they said.
In the U.S., both nuclear power and coal will be nearly completely pushed off the grid by age and economics by mid-century, Bloomberg New Energy Finance predicted. That assessment, however, assumes no federal policy intervention to prop up those baseload resources.
Given the report's bearish assessment of coal in the U.S. and globally, power-sector carbon emissions will peak in 2027 and then fall 38% by 2050. That will still be insufficient to keep global carbon dioxide levels below 450 parts per million, a threshold considered necessary to limit the global temperature rise to less than two degrees Celsius, according to the report.
"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," Matthias Kimmel, an analyst with the firm, said in a news release. "Getting to two degrees requires a zero-carbon solution to the seasonal extremes, one that doesn't involve unabated gas."
Leveraging the build-out of lithium-ion battery manufacturing capacity for electric vehicles, the cost of battery-based stationary storage facilities will drop roughly 67% by 2030 to $70/kWh, according to the report. The firm expects the levelized costs of solar photovoltaic and wind plants, on average, to fall 71% and 58% by 2050, respectively. While solar generating capacity grows seventeenfold and wind expands sixfold by mid-century, natural gas peaking capacity will also increase by nearly four times, the report projected.
Overall, the analysts expect global power demand to jump 57% by 2050, increasing at a pace of 1.4% annually, driven in part by the emergence of battery electric vehicles that will account for 9% of the world's power consumption by that time. An estimated $11.5 trillion will be invested in more than 13,100 GW of new power plants by 2050, with renewables seizing a nearly 80% share of capacity additions.