Renewable energy will march forward this year, due to “remorseless reductions in the costs of solar and wind electricity and of lithium-ion batteries,” Angus McCrone, the chief editor of Bloomberg New Energy Finance (BNEF) wrote in a commentary.
Clean energy will also make huge strides because of the “widening realization on the part of investors and corporations that there is this ‘sustainability thing’ and, for reasons of self-interest, they just need to do it,” McCrone added.
Falling costs for wind and solar are great news, but they also make the headline investment figure appear less impressive. BNEF sees total clean energy investment hovering at around $300 billion, down from 2018’s $332.1 billion. But while investment totals will be down this year, as time marches on and costs continue to fall, every dollar invested brings more renewable energy capacity.
The same will be true in 2019. For instance, BNEF predicts that the world will add between 125 [+15%] and 141 gigawatts (GW) [+29%] of new solar this year, sharply up from the ~109 GW added in 2018. For wind, BNEF sees capacity additions of 70 GW [+31%]in 2019, up from 53.5 GW last year.
One notable development is the rise of offshore wind. It will still remain a fraction of the wind installation total, but “eye-catching price drops” will make it a “must-have” technology this year, BNEF analysts argue. Europe is set to install 4.9 GW of offshore wind, with Asia installing 3.5 GW – both new record highs. BNEF says this will be the last year that Europe leads in offshore wind. From here on out, Asia will take over as the global leader.
Energy storage hits a milestone in 2019 as well, adding 10 GWh of new capacity for the first time. China will “establish a truly global presence” in the energy storage market, with automakers increasingly seeking out Chinese suppliers. Average battery prices could fall below $150/kWh this year, down from $176/kWh last year, which itself was a record low.
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In this piece, I pointed out that to get to 100% green electricity by 2040, we needed the percentage of renewables in electricity generation to grow by 10% per annum, compounded, and to get to 100% by 2030, growth needed to be 20% per annum.
In 2017, according to Wikipedia, total global solar capacity was 401.5 GW (my numbers are a couple of % higher), so capacity grew in 2018 by 27%, and will grow again in 2019 by 24% (at the lower end of BNEF's forecast) and by 27% (at the upper end).
Total wind capacity in 2017 was 539 GW, so this year's expansion will add 11.8% to its installed capacity.
Taking wind and solar capacity together, this year total (W+S) installed capacity should rise by about 18%. Which means we are on our way to 100% green electricity by 2040. In fact, an 18% growth in capacity every year from now on would get us there in 13 years, in 2032.
Also, for what it's worth, if the previous rate of decline in battery prices continues, battery costs this year should reach $141/kWh and $113/kWh in 2020, equivalent to $39/MWh and $31/MWh respectively for 24 hours of storage. 24 hours of storage will be quite sufficient to take us to 80 or 90% renewables on a grid powered by both wind and solar. Most national and regional grids are quite some way from that level of penetration yet, but will reach it in 10 or 12 years, by which time battery cost will have fallen by 90% from today.
Global installed capacity charts are shown below, with 2019 forecasts included. Note that they are plotted on a log scale, which shows as a straight line when there is a constant growth rate, whereas a linear scale shows as an ever steepening curve. Total wind capacity has risen from 1.8 GW in 1989 to 662 GW in 2019 (forecast), and solar has risen from 1 GW in 2000 to 673 in 2019 (f'cast). In recent years wind's growth has slowed from the 30% p.a. of early days to around 12% per annum (as can be seen from the flattening slope of the curve). Solar's growth has remained at +-30% p.a.. If anything, growth is likely to accelerate as costs fall, and as batteries become cheap.
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