BloombergNEF (BNEF) published its New Energy Outlook 2020 (NEO) in October. The NEO projects the evolution of the global energy system over the next 30 years. This report is widely utilized by planners, strategic thinkers, and investors in developing long-term forecasts and plans. One of the NEO’s most notable projections is that the sharp drop in energy demand from the Covid-19 pandemic will remove about 2.5 years’ worth of energy sector emissions between now and 2050. To learn more, read “New Energy Outlook Projects Massive Energy Sector Shift Through 2050.” Reading this article may require a subscription.
Other notables from the report:
- Electric vehicles (EVs) reach upfront price parity with Internal Combustion Engine (ICE) vehicles before 2025.
- Gas is the only fossil fuel to grow continuously through the outlook, gaining 0.5% year-on-year to 2050.
- Coal demand peaked in 2018 and collapses to 18% of primary energy by mid-century, from 26% today.
- In the NEO Climate Scenario, the clean electricity and hydrogen pathway requires 100,000 terawatt-hours (TWh) of power generation by 2050. This power system is 6-8 times bigger than today’s and generates five times the electricity.
- Green hydrogen provides just under a quarter of total final energy in 2050 under the Climate Scenario.
- Reducing emissions well below two degrees under the clean electricity and green hydrogen pathway requires between $78 trillion and $130 trillion of new investment between now and 2050.
Path to 100% Perspective:
The dramatic fall in once-expensive renewable and flexible capacity costs has transformed energy investment over the last decade and the pace of change in accelerating. The cost of offshore wind, for example, has fallen by 63% since 2012. With a renewed focus on future-proofing their business models, utilities have increased renewable energy investments, taking advantage of the certainty that clean energy brings to the balance sheet. In effect, adopting renewable energy, coupled with flexible generation and storage for system balancing, is akin to purchasing unlimited power up-front, as opposed to placing bets on fluctuating oil prices and exposure to narrowing environmental regulation.
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