The cost of renewables is diving faster than forecasters expected as as technologies like wind turbines that are gigantic arrive on the market.
That’s the conclusion of Bloomberg New Energy Finance, whose founder Michael Liebreich estimated that clean energy will reap 86 percent of the $10.2 trillion likely to be invested in power generation by 2040.
In a presentation to the study team’s conference in London on Tuesday, Liebreich said technology that’s slashing the costs of solar and wind farms makes it inevitable that fresh energy will become more economic than fossil fuels for utilities in many areas. The progress is at the scale of wind turbines.
When it started collecting data in earnest in 2004, BNEF already could see a trend toward machines in the wind industry that provide more spark into the grid. The scale of those turbines will grow with versions planned by Siemens AG and Vestas Wind Systems A/S that currently are providing ones with wing spans larger than the Airbus A380 double-decker jetliner.
Larger machines’ promise early in the next decade prompted developers of offshore wind farms in Germany to guarantee electricity without subsidy on their projects.
“One reason those wind costs have come down to be competitive without subsidies because these turbines are monsters, & #x 201D is; Liebreich said. “Imagine a telescope using a tip height which’s higher than The Shard. ’’
Of producing electricity for a price that is lower, the identical procedure is making photovoltaics cheaper. Liebreich called two “tipping points” where the price of renewables will make power generation fueled by natural gas and coal unattractive.
“The first is when new solar and wind become cheaper than anything” Liebreich said. The slide below from his presentation suggests that in Japan by 2025 it will be cheaper to build a new PV plant than a coal-fired power generator. That milestone will be passed in India for wind power by 2030.
“At that point, anything you have to retire is likely to be replaced by solar and wind,” Liebreich said. “That tipping point is either almost or here here anyplace in the world. ”
The next tipping point, a bit further off, is when #x & it 2019; s expensive to operate present coal and gas plants than to take power from wind and solar. The chart below, from BNEF predictions, suggests that point may arrive in the middle of the decade in Germany and China.
Because energy costs vary widely from country to country, it’s difficult to make firm conclusions about when renewables might have the ability to overtake fossil fuels. By way of example, Brazil relies on hydroelectric dams and France on its nuclear reactors — technologies in lower use in most other places.
For Liebreich, the economics of solar and wind are becoming persuasive enough that it’s unlikely coal have the ability to hold onto its dominant position in the international power mix no matter what incentives President Donald Trump implements in the U.S.
“This is going to take place,” Liebreich said. “Coal is declining in the U.S. Nobody is going to make coal great again. ”
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