NEO 2016: Renewables to provide 70% of Europe’s power in 2040

Illustration (Image: flickr/Olearys)
Illustration (Image: flickr/Olearys)

Bloomberg New Energy Finance (BNEF) has released the latest long-term energy forecast for the 2016-40 period which states the renewables would dominate Europe by 2040.

BNEF’s ‘New Energy Outlook 2016’ sees $11.4 trillion investment in global power generation capacity over 25 years.

Low prices for coal and gas are likely to persist, but will fail to prevent a fundamental transformation of the world electricity system over coming decades towards renewable sources such as wind and solar, and towards balancing options such as batteries, BNEF’s press release reads.

The report forecasts some $7.8 trillion of investments in green power, with onshore and offshore wind attracting $3.1 trillion, utility-scale, rooftop and other small-scale solar $3.4 trillion, and hydro-electric $911 billion.

NEO 2016 also predicts that the renewable energy will dominate in Europe, and overtake gas in the US. Wind, solar, hydro and other renewable energy plants will generate 70% of Europe’s power in 2040, up from 32% in 2015, according to BNEF.

In the US, their share will jump from 14% in 2015 to 44% in 2040, as the gas slips from 33% to 31%.

Seb Henbest, Head of Europe, Middle East and Africa for BNEF, and lead author of NEO 2016, said: “Some $7.8 trillion will be invested globally in renewables between 2016 and 2040, two thirds of the investment in all power generating capacity, but it would require trillions more to bring world emissions onto a track compatible with the United Nations 2°C climate target.”

Elena Giannakopoulou, Senior Energy Economist on the NEO 2016 project, added: “As a global generation source, gas will be overtaken by renewables in 2027. It will be 2037 before renewables overtake coal.”

NEO 2016 charts a significantly lower track for global coal, gas and oil prices than did the equivalent projection a year ago. However, it also shows a steeper decline for wind and solar costs.

Investment in coal and gas generation will continue, predominantly in emerging economies. Some $1.2 trillion will go into new coal-burning capacity, and $892 billion into new gas-fired plants, according to BNEF.

NEO 2016 is based on a combination of the project pipeline in each country, current policies, plus modelled paths for future electricity demand, power system dynamics and technology costs.