New Energy Outlook Projects Massive Energy Sector Shift Through 2050

At-a-Glance:

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.

Key Takeaways:

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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Renewable Electricity Set To Power Past Coal And Gas By 2025

At-a-Glance:

Global economic growth has dropped this year because of COVID-19 and the energy sector has been among the hardest-hit, with oil prices at one point turning negative as demand slumped.

However, one part of the energy industry has defied the downturn – and is set to post record growth this year and next. Cost reductions and sustained policy support are set to drive strong growth in renewable energy. By 2025, renewables will have usurped coal to become the biggest source of electricity generation globally. To learn more, read “Renewable Electricity Set To Power Past Coal and Gas By 2025.” Reading this article may require a subscription.

Key Takeaways:

  • The International Energy Agency (IEA) Renewables 2020 report says that almost 200GW of new clean power capacity will be installed in 2020, almost 90 percent of all new power capacity around the world.
  • Renewable electricity generation will increase by 7 percent globally in 2020, underpinned by the record new capacity additions, the Agency says. This growth comes despite a 5 percent annual drop in global energy demand, the largest since World War II.
  • India’s renewable energy sector is set to double in 2021.
  • Global growth in renewable capacity in the first 10 months of 2020 is already 15 percent higher than the same period last year, despite the pandemic, and growth is set to continue.
  • But while renewables in the power sector are going from strength to strength, the COVID crisis has hit electric vehicles and renewable heat hard

Path to 100% Perspective:

As wind and solar power become increasingly cost-competitive, investments in traditional, inflexible base load plants such as large coal, nuclear, and gas combined-cycle plants are declining. This signals an end to the era of large, centralized power plants that run on fossil fuels.

Global financial trends reflect this dramatic shift, with renewable generation attracting more investment dollars than fossil-powered generation year after year. In 2018, investment in renewable power capacity was about three times higher than the amount invested in new coal- and gas-fired generation combined, according to the global renewable energy organization REN21. Worldwide investment in renewables has exceeded $230 billion for nine years in a row.

 

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Black & Veatch leaving coal projects in the dust

At-a-Glance:

Engineering and construction company Black & Veatch has announced it is ceasing participation in coal-based design and construction projects in an attempt to focus on more renewable energy work. Black & Veatch has been its increasing focus on renewable energy and energy storage projects over the last decade. The transition away from coal-based jobs will allow the firm to more fully focus on sustainable energy projects. To learn more, read “Black & Veatch leaving coal projects in the dust.”

Key Takeaways:

  • In an example of the company’s move to clean energy projects, earlier this year it was selected to work on the Intermountain Power Agency Renewal Project, one of the earliest installations of combustion turbine technology designed to use a high percentage of green hydrogen.
  • Black & Veatch will still carry out projects to convert coal plants to cleaner energy sources, as well as decommissioning existing coal plants. The biggest change is the contractor will no longer extend the life of any coal facility.
  • “Any decision of this nature will have an impact, but our global client base is overwhelmingly pushing toward a zero-carbon future,” Mario Azar, president of Black & Veatch’s power business said. “The fundamental challenge for the industry is whether to look to the future or continue to look to the past.

Path to 100% Perspective:

The influence of governments and organizations moving toward a zero-carbon future continues to expand to companies responding to the growing demand of their customers and investors. As the investment in energy-related innovation grows,  the renewable energy future presents more affordability, flexibility and reliability for organizations striving to accelerate decarbonization efforts.

 

Photo by Dominik Vanyi on Unsplash