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Monday, July 31, 2017

China's big tipping point

Renewables are cheaper than coal-fired electricity in the US and Germany. In China, the cost of electricity from large-scale solar, on the other hand, is still higher than its cost from coal power stations.  But the costs of solar and wind are falling steadily, which means that by 2021, solar will also be cheaper than coal in China too. (China produces 1/3rd of global CO2 emissions)

BNEF is one of the leaders in the economics of renewables.  Even they confess to being surprised at how fast the costs of renewables are falling:

Solar power, once so costly it only made economic sense in spaceships, is becoming cheap enough that it will push coal and even natural-gas plants out of business faster than previously forecast. 
The scenario suggests green energy is taking root more quickly than most experts anticipate. It would mean that global carbon dioxide pollution from fossil fuels may decline after 2026, a contrast with the International Energy Agency’s central forecast, which sees emissions rising steadily for decades to come.  
“Costs of new energy technologies are falling in a way that it’s more a matter of when than if,” said Seb Henbest, a researcher at BNEF in London and lead author of the report. 
Electricity from photovoltaic panels costs almost a quarter of what it did in 2009 and is likely to fall another 66 percent by 2040. Onshore wind, which has dropped 30 percent in price in the past eight years, will fall another 47 percent by the end of BNEF’s forecast horizon. 
“These tipping points are all happening earlier and we just can’t deny that this technology is getting cheaper than we previously thought,” said Henbest.

[Source: Bloomberg New Energy Finance.  Read more here]

Even though BNEF are more optimistic than BP, the IEA and the other old-energy experts, who keep on forecasting too slow a decline in the costs of renewables, I don't think they're actually optimistic enough.  By 2040 I expect much more than 34% of the world's electricity to come from renewables.  I expect global CO2 emissions may already have peaked, and although they won't fall rapidly over the next three or four years, the rate of decline will inexorably accelerate.

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