Coal's outlook black

Sorry.  😎

OK, let's be serious now.

BNEF has just published their NEO (New Energy Outlook) 2018.  (Charts via J Pratt's blog.)

The decline in coal (to 11% of total generation by 2050) is assumed to be driven not by policy but by technology/costs.  BNEF forecasts significant further declines in the costs of solar (71%) and wind (58%) by then.  They're forecasting another 66% drop in li-ion battery prices by 2030.

I think the switch away from coal will happen much more quickly than BNEF does, for 3 reasons:

1. Solar costs are probably going to fall much faster than 71% over the next 35 years.  Frankly, they could fall that much over the next 10 or 15.  Which would make solar plus wind cheaper than the operating costs of coal, just as is already the case in the US and elsewhere (see Solar gets ultra cheap in Australia and World's largest li-ion battery.)  As renewables' costs keep on falling, this can only get worse.  Why bother to dig, ship and burn coal when renewables can do it for you much more cheaply?
2. Battery costs will prob'ly halve over the next 3 years, and halve again over the subsequent 3.  So we could see BNEF's forecast 66% decline happen not by 2030 but by 2025.   There is a ferment of new battery research and development and an explosion in battery gigafactory construction. The rapid cost declines of recent years will continue.  This means that backing up variable generation from wind and solar will get a lot cheaper very quickly.  Which only emphasises point 1.
3. By 2030, global temperatures will have risen another 0.2 or 0.3 degrees.  The serious adverse consequences of that rise will be concentrating the minds of governments everywhere.  Coal won't be allowed to continue -- in other words, policy will not be neutral.  And countries which refuse to do their bit will be penalised.  Trump has already shown how easy it is to defy WTO agreements. If several large economies agree to ban coal and institute a carbon tax, and some others (Australia, say) drag their feet, their exports will simply be hit with punitive tariffs.  The world will fall into line.  

The problem is, according to their calculations, that this will not be enough. 

The blue line in the chart above shows the annual output of CO2 if  BNEF's NEO 2018 forecasts pan out.  The pine-green lines shows how power generation emissions would have to fall if we are to prevent global temperatures from rising more than 2 degrees C. The purple line shows what emissions would do if we had a forced phase out of coal from 2025 to 2035.   And the reason emissions under this scenario don't fall fast enough to prevent 2 degrees C rise is because BNEF thinks we'll  keep on burning gas.  For the next 20 years, that seems possible, even plausible.  But after that, point 3 above will apply.  We'll replace peaking gas with storage and baseload gas with renewables plus storage.  Because we'll have to.

So the headline conclusions of BNEF are bad enough for coal, but in fact, the likelihood is that things will be even worse.  Black indeed.

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