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Bloomberg Study: 70 Percent Of New Global Power Capacity Added Through 2030 Will be Renewable

By Jeff Spross on April 25, 2013 at 12:45 pm

"Bloomberg Study: 70 Percent Of New Global Power Capacity Added Through 2030 Will be Renewable"

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According to Bloomberg’s renewable energy research team, Bloomberg New Energy Finance (BNEF), 70 percent of the power generation the world will add between now and 2030 will most likely be renewable.

That would mean $630 billion in new renewable capacity investments in 2030 alone — over three times what was built in 2012, and 35 percent higher than what BNEF predicted for 2030 a year ago. So not only does renewable energy’s future look formidable, it’s looking more formidable every year we project it.

After accumulating the latest data on economic prosperity, market trends, demand growth, technology development, and likely future policies, BNEF’s modeling program spit out three projection scenarios: the optimistic “Barrier Busting” scenario, the pessimistic “Traditional Territory” scenario, and the middle-of-the-road “New Normal” scenario.

The New Normal scenario is considered the most likely. It shows the investment requirement for new clean energy assets in the year 2030 at $630bn (in nominal terms), more than three times the investment in the renewable energy capacity that was built in 2012. This 2030 investment figure is 35 percent higher than that produced in Bloomberg New Energy Finance’s last global forecast a year ago, and the projection for total installed renewable energy capacity by that date is 25 percent higher than in that previous forecast, at 3,500GW.

In the power sector, the research company’s latest forecasts project that 70 percent of new power generation capacity added between 2012 and 2030 will be from renewable technologies (including large hydro). Only 25 percent will be in the form of coal, gas or oil, the remaining being nuclear.

Newly installed capacity in gigawatts. (Source: BNEF/Grist)

Significantly, even under the Traditional Territory projections, renewable investments would be $470 billion in 2030 — over twice what they are now.

As Grist points out, things don’t look nearly as bright once you add back in already installed power. Totaling it all up, half the global power supply will still be non-renewable in 2030. And there’s still plenty of uncertainty built into BNEF’s projections — with a possible boom in natural gas for a China among the biggest question marks.

But the larger point is that the rise of renewables is driven by concrete changes int he structure of the energy market. “The news right now is dominated by stories of pain caused by overcapacity on the supply side of clean energy, and the lure of cheap shale gas,” said Michael Liebreich, BNEF’s chief executive. “But this is playing out against the falling costs of renewable energy and of all the technologies required to integrate it into our energy system, and falling costs win.”

Of course, they’d be winning even faster if we corrected the massively-distorting failure of both the United States’ domestic market and the global market to properly price in the future costs of carbon emissions.

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18 Responses to Bloomberg Study: 70 Percent Of New Global Power Capacity Added Through 2030 Will be Renewable

  1. Mark E says:

    1. Projections are always more robust with longer hard-data history backing them up. SO my question is, to what extent are we plucking “low hanging” renewable energy fruit?

    2. Looking ahead, I eagerly await solar panel manufacturing which relies, as a marketing strategy, on 100% renewable energy for the manufacturing process (excluding nuclear and hydro, which some claim are “renewable” )

  2. fj says:

    Maybe this is why I’m an optimist:

    Awesome comment, Janette Sadik-Khan “You want to save the planet? Move to NYC” heard @NYTenergy with @NYRP colleagues — Karen Dumonet (@KMD1023)

    • fj says:

      NYC DoT commissioner is correct: 5000 people enrolled the first day bikeshare subscriptions were available.

      Bikeshare is very early stage net zero transit.

      Advanced net zero transport and transit will cause emissions, energy, material usage, infrastructure and vehicle costs to plummet virtually overnight.

      The simple secret of net zero transport and transit: Design your vehicles to be small and light enough to be easily powered by human power and auxilliary power when required will be minimal.

    • Mulga Mumblebrain says:

      Wow! And that huge percentage of US citizens whose income has stagnated for forty years, whose jobs are low paid and precarious and whose household wealth continues to drop, should they bring their own cardboard boxes when moving to ‘NYC’, or simply recycle those of others?

      • fj says:

        Can you actually do anything else besides whine and complain?

        In any case, you will be welcome in New York City as we have some of the best whiners and complainers in the world.

        And, it’s absolutely a trip to watch them wring their hands.

        I hope you can do this as well.

        • Mulga Mumblebrain says:

          fj, I am the animus to your anima (or is it vice versa?). Don’t gripe about moi, and I will continue to enjoy your sunny bromides. You say some jolly good things and I envy your optimism. But coming to New York is unaffordable for most people in your increasingly unequal society (another symptom of Rightwing control) and that’s a concrete cold fact.

  3. quokka says:

    Considering the average capacity factor of renewables will be lucky to exceed 20-25%, that claimed 70% of new capacity looks rather less impressive. It would amount to less than half of generated electricity from new capacity – if it pans as as Bloomberg claims. All of this remains very uncertain.

    The need for nuclear power remains obvious for all not blind to energy realities.

    • This is right as far it goes. But then again, the effect of lots of zero-marginal-cost renewable electricity for part of the day is to cut into the capacity factor of fossil generators, as we are seeing in Germany. Coal stations whose LCOE was calculated on the obsolete “baseload” assumption don’t look so good now, and plans are being massively shelved. A similar switch has started in the US, at lower levels of renewables.

      These interactions shed doubt on Bloomberg’s forecasts as too pessimistic. Does anybody else believe that nuclear power stations will be replaced at a good clip? Their economics was highly dubious before, and now you can’t even assume continuous running.

      • Ed Leaver says:

        The market is an efficient mechanism for allocation of resources, but it has no foresight. That is the (imperfect) role of energy taxes and subsidies. The danger is that the near term low-penetration margin offered by intermittent renewables is not necessarily a direct replacement for dispatchable sources e.g. fossils and nukes. They are different things. What would happen were power companies allowed to charge customers the true cost of the power generated at the time it was consumed? What if one wished to minimize the cost of total energy generated, subject to the constraint of 80% less CO2? And inspirational it may be, but Germany’s story is not yet complete.

        • J4Zonian says:

          Precisely because it has no foresight (or hindsight, or emotions, or reason, or connection to other beings…) the market is a terrible mechanism for allocation of resources, allocating tremendous piles of loot to those who already have too much and nothing to those in desperate need. That’s true whether “those” are people or energy industries. And since one of the major mechanisms of allocating taxes and subsidies is government captured by the industries it regulates, and allocates to, we have considerable work to do to overcome the damage the market’s caused—and continues to. And all that’s true of course because “the market” is only a sum of the resources used to do the allocating. And those are overwhelmingly owned or controlled by those who have too much.

          We’ve waited far too long to do what we’re just starting to do now—switching to clean energy, low-meat local organic permaculture, reforestation, closed-loop industrial cycles, etc. So now we have to do everything as a crash program. The result will be stumbles, inefficiencies, backtracks and do-overs. They have to be tolerated and understood as the price we pay for allowing conservatives and fossil fuel and nuclear energy companies to delay action for decades. None of our stories is complete; Germany is doing amazingly well, considering.

          If people were charged the true cost of the power they consumed, the speed of renewables construction/deployment would be multiplied tremendously. The huge externalities (not even counting that pesky world-ending climate thing) of ff’s and nukes would make sure of that.

          And why would you want to minimize the cost of energy? (at least without instituting some other constraint on its use—social or emotional or…?)

          • Ed Leaver says:

            Thanks J4 — you are thoughtful. I would amend your first observation to “Precisely because it has no foresight (…or connection to other beings…) the unregulated market is a terrible mechanism for allocation of resources…”

            This crucial distinction was well made by Adam Smith, who merely advocated elimination of unnecessary regulation. Left to its own, “the market” will (indeed must) inexorably devolve to monopoly and oligopoly. With results played out in the West’s Industrial Devolution, and continue as booming export product to the Third World today.

            It is little remembered, and less appreciated, that Adam Smith was himself a Scot living in London during the ’45, and was busted at uni and disciplined for reading David Hume. Smith was a small, quiet man not given to eloquence. But his subsequent post at Edinburgh was “Professor of Moral Philosophy”, and his lectures there among the most sought-after in all Europe. Wealth of Nations was in fact a populist tract with purpose of addressing the huge economic disparity and grievance afflicted by the wealthy and powerful (persons, corporations, and nations) upon those less so.

            Show me a prosperous socialist society (Sweden, if you will), and I’ll show you well regulated but respected markets. Show me top-down centralized planning, and I’ll show you China and the Soviet Union.

            Public policy treads a fine line, power and energy being where the rubber hits the road. Efficient and reliable electricity grids have thus far required a modicum of central planning and control. In the U.S. that is usually accomplished by public corporations granted limited monopoly by their customers, with considerable regulation and oversight. It isn’t perfect, and it will be interesting to see how local power generation (small wind farms, rooftop solar etc), local storage if ever possible, interconnecting Smart Grids, and internalization of the externals play out.

            The Play will be via the Market. Success of the production will depend upon the foresight with which we regulate it. Thanks!

          • Mulga Mumblebrain says:

            Well said! So called ‘Free Markets’ are actually money markets where the power of the market participants depends on the weight of money they bring to bear and their knowledge of market conditions. The obvious inequality of market information is denied by the market fundamentalist by magically assuming, laughably, ‘perfect knowledge’ in all participants. It is on a par, intellectually, with most market fundamentalist nostrums. Markets can only operate fairly and efficiently where the participants have near equal ‘market power’ ie money, which, as we know, is a big No-No in really existing market fundamentalist capitalism. So, with everything in the world commodified, all goods distributed by the market go to the highest bidders, the rich, who enjoy a growing excess while the rest fall increasingly into poverty and misery amongst plenty.

          • Mulga Mumblebrain says:

            Yes, Ed-show us China which has engineered the greatest economic leap in human history with the greatest fall in poverty for the greatest number in human history, over the last few decades, and which is going to save our climate bacon, if we’re lucky. Sounds like a record for which ‘top down centralized planning’ can be quite proud. Of course the Chinese plan at the top, where meritocracy, not plutocracy, rules, then let real enterprise, hard graft and massive investment fill in the details. That’s the system that can work.

      • quokka says:

        I find the claim that “baseload is obsolete” to be just odd. The biggest expansion of average generation capacity in the last few years world wide has been coal. It is the fastest growing energy source and the IEA forecasts that it could overtake oil for the number one spot by 2017. Baseload is very much alive and kicking.

        If we could take out a significant part of that coal baseload capacity with low emission capacity, that would be a big win. Some aspects of replacing that baseload capacity are made easier by the use of a like-for-like replacement which in many ways nuclear is and renewables (aside from hydro) are not.

        But just as important is consideration of the electricity infrastructure as a whole. Security and reliability of supply have a high economic value that is just not priced in by a “spot” two sided auction market for the next kWh of energy. Governments will act to ensure a generation mix that delivers reliability and security. They could do it through regulation, use of state owned assets, or market mechanisms such as power purchase agreements, contracts for difference, capacity markets etc. In such a context nuclear remains a highly viable option.

        Assessments from independent authoritative sources generally agree that nuclear remains cost competitive with renewables on an LCOE basis. The exception may be on-shore wind in some regions but it depends. On-shore wind is cheaper in the US where it achieves around 30% capacity factor than in Germany where it manages only about 18%.

    • fj says:

      The need for nuclear remains far from obvious as do the capacity factors you mention especially without full detailing.

      Seventy percent is likely a low figure as it seems the stuff will start seriously hitting the fan within the next two years and stopping climate change at wartime speed will no longer seem to be something we have a luxury of time to think about.

      • Ed Leaver says:

        Capacity Factor for a solar plant can exceed 70% only if it is both tracking and combined with a storage system, and then its a matter of plant design and how you run the numbers. Without storage, fixed angle rooftop PV has capacity factor of about 20% in Australia, 13% in Germany, a function only of geometry and weather. Nuclear offers a high-capacity, high availability, very low CO2 drop-in substitute for many coal plants, without a massive rewiring of the electric grid.

      • quokka says:

        It is well known that in Germany the capacity factor of PV is about 11% and about 18% for on-shore wind. If you don’t believe me just go the Wikipedia entries on solar and wind in Germany and calculate it yourself from the capacity and production numbers.

        In the UK capacity factor of on-shore wind is about 27%.

        The new CSP plant in the UAE – Shams 1 – which presumably is in a very good climate for solar has a capacity of 100 MW and annual production of 210,000 MWh/yr. (source NREL) That’s a capacity factor of 24%. At a cost of $600 million, it’s over six times as expensive as the nuclear power plant under construction in the UAE per unit of average power.

        20-25% average combined capacity factor of solar+wind worldwide may actually be optimistic.

        What might hit the fan in the next couple of years that might prompt a “wartime speed” response is quite unclear. Progress to date is poor and there is little indication of any step change in the offing. I see no gain in not telling it the way it is.

        • sailrick says:

          But I would assume that CSP plant in the UAE does not have molten salt heat storage, because the NREL says plants with the heat storage can have capacity factors of 50%- up to 70% for power tower type plants.