Bloomberg New Energy Outlook says 50% renewables by 2050


Bloomberg’s annual New Energy Outlook (NEO) report has been released, and projects that the global energy mix will be 50% by 2050, driven by falling renewable and battery storage costs. The projection makes for grim reading for fossil fuels, and the NEO believes that even nuclear won’t gain ground thanks to the capabilities of today’s renewable-based technologies.

As more and more renewables are installed, typically in a decentralized manner nearer the points of consumption, the need for smart grid technologies will grow. Without such systems in place, renewables can’t grow to the level projected by Bloomberg, as the utilities and distribution companies will need to be able to see real-time consumption data so that they can optimize delivery and prevent black or brownouts.

Consequently, smart meters in all customer premises become near mandatory, generating the data needed for central management systems to allocate energy where it is needed. Connected substations and grid equipment are needed for that function, and by 2050, the majority of grid infrastructure is going to have some manner of direct internet connection.

So there’s a huge need for IoT technologies in the grid and utility space, covering generation and transmission, as well as for monitoring the end-user consumption for demand-response tasks. Network operators should already be in discussions with these sorts of utility customers, as they could potentially sign up large amounts of devices to their public networks, or even construct lucrative private networks for the warier utilities.

The NEO projects the cost of solar and wind to drop 71% and 58% respectively, through the period, enabled by a global $548bn investment in battery capacity – of which two-thirds will be grid-scale and the other third behind-the-meter, in the buildings in which electricity is being used. Since 2010, lithium-ion battery prices have fallen 79%, according to the report, with Bloomberg projecting that batteries are going to take off around 2030, in the US at least. In 2030, the report says batteries will cost around $70/kWh, down 67% from today’s costs, which are around $200/kWh.

The total investment in new power generation capacity through 2050 stands at $11.5tn, according to Bloomberg. Some $ of that is attributed to wind and solar, with $1.5tn expected to be spent on other zero-carbon (always a troubled definition) technologies, like nuclear and hydro.

In terms of pricing, it’s hard to see how gas or nuclear fission could stay competitive with solar and wind. Tidal power or large-scale hydroelectric projects could disrupt wind and solar. Battery storage could be hampered by shortages in the rare earth metals needed to build the battery cells, particularly cobalt but also potentially lithium. There is always great interest in battery announcements that claim to have found a way round this constraint, but so far, the wonder-battery has yet to materialize.

As we’re dealing with three decades of progress, nuclear fusion might make some considerable strides in the period. With the potential to solve the world’s entire energy needs, the technology is truly science fiction in its scope – it would be the fuel to power galactic expansion. However, it remains a long way off, and while recent tests have renewed enthusiasm, it’s best to treat fusion with a lot of skepticism. Thorium-based reactors were quite popular a couple of years ago, but things seem to have gone quiet on that front.

In 2050, the NEO projects total zero-carbon energy to account for 71% of the total mix. That remaining 29% is fossil fuels, which is a dramatic reduction from today’s 63% – with coal falling from 38% of generation today, to just 11% in 2050. However, natural gas generation is going to play a key role, says the NEO, acting as a back-up for when renewable sources are facing extreme generation constraints. These gas peaker plants are expected to grow four-fold through the period – a net addition of 1,002 GW. Electric Vehicles are also expected to account for 9% of new (not total) electricity demand by 2050, which is some 3,461 tWh.

Total new battery capacity additions will come to 1,291 GW by 2050, with 40% of this installed behind-the-meter – although it does say one-third elsewhere in the NEO. In 2050, APAC will attract 41% of the battery investment, with that $223bn total apparently split equally between grid-scale and behind-the-meter. Europe is in second place, on $168bn, but its ratio puts grid-scale batteries at 77% of the mix.