The study draws expertise from more than 100 analysts and researchers around the world who specialize in the energy transition of the world and forecasts for the future.
Experts from BNEF expect investments to reach $3.7 trillion between now and 2040. The start of the solar revolution begins with home and business owners deciding to move away from the current centralized power system to a more efficient and financially lucrative solar PV system. According to the report, 13 percent of electricity worldwide will be generated from small-scale solar systems. This will be made possible by the improvement of conversion efficiencies in solar PV systems and more streamlined production methods. With prices increasing in traditional methods for electricity and residential battery storage becoming more affordable, this will make rooftop solar systems even more attractive.
The BNEF predicts that global electricity consumption will remain relatively flat over the next 25 years. Global demand will grow about 1.8 percent a year, compared to 3 percent a year from 1990 to 2012. In developed countries, the demand for power will actually decline.
- Solar, solar everywhere. The further decline in the cost of photovoltaic technology will drive a $3.7 trillion surge in investment in solar, both large-scale and small-scale.
- Power to the people. Some $2.2 trillion of this will go on rooftop and other local PV systems, handing consumers and businesses the ability to generate their own electricity, to store it using batteries and – in parts of the developing world – to access power for the first time.
- Demand undershoots. The march of energy-efficient technologies in areas such as lighting and air conditioning will help to limit growth in global power demand to 1.8% per year, down from 3% per year in 1990-2012. In OECD countries, power demand will be lower in 2040 than in 2014.
- Gas flares only briefly. Natural gas will not be the “transition fuel” to wean the world off coal. North American shale will change the gas market, but coal-to-gas switching will be mainly a US story. Many developing nations will opt for a twin-track of coal and renewables.
- Climate peril. Despite investment of $8 trillion in renewables, there will be enough legacy fossil-fuel plants and enough investment in new coal-fired capacity in developing countries to ensure global CO2 emissions rise all the way to 2029, and will still be 13% above 2014 levels in 2040.
“NEO 2015 draws together all of BNEF’s best data and information on energy costs, policy, technology and finance. It shows that we will see tremendous progress towards a decarbonised power system. However, it also shows that despite this, coal will continue to play a big part in world power, with emissions continuing to rise for another decade and a half, unless further radical policy action is taken.”