A Bloomberg New Energy Finance forecast says that a majority- about two-thirds- of all investments related to power generating plants will be in renewable energy sources from 2016 to 2040. These investments will happen despite cheap has and coal prices. New Energy Finance is energy resource part of Bloomberg, the information company.
Bloomberg expects that around $7.8 trillion will be invested all over the world in renewables over that period. This is in contrast with a much less $1.2 trillion for coal plants. The latter will be predominantly located in emerging markets like India. Gas, for its part, will attract only $892 billion. This is expected to be true despite a projected excess of fuel resulti8ng on lower costs of generating power. Elena Giannakopoulos, the co-author of the report said that there is surprise that the forecast states that gas, other than the exception of the North American region, will enjoy no golden period. She further added that gas, as a source, will be overtaken. The renewables will sideline it in 2027. Coal will be left behind by renewables in 2037.
Even though the electricity system powering the world will be decarbonized, it will still be inadequate to meet the target set by the United Nations to restrict global warming. The aim is to keep below the two degrees centigrade threshold. The report states that an additional $5.3 trillion investment in zero carbon power is needed to stop the levels of carbon di-oxide in atmosphere to cross the 450 ppm limit.
Emerging economies like India will use increasing amounts of coal thus pushing up carbon emissions on a global scale. This will exceed five percent over the 2015 levels within 2040 to touch 700 megatons. A rebalance of the economy with weaning away from heavy industry and weaker growth, along with more renewables means that emissions could peak as quickly as 2025.
Renewables will dominate Europe with 70 percent share of the power mix in the continent. In the United States, the share of renewables will increase from 14 percent in 2015 to 44 percent.
The thermal power industry is afraid that margins of thermal power will erode further with increasing renewable capacity addition. Industry sources have cited that the Plant Load Factor or PLF of the thermal plants may dip below 50 percent if renewable energy production is further ramped up.