Renewable energy are set to power the future in 2050. Credit: Pixabay.

Renewable energy are set to power the future in 2050. Credit: Pixabay.

The annual energy report by Bloomberg NEF (BNEF) concluded that wind and solar are set to surge to a “50 by 50” future, meaning they’ll account for 50% of the world’s energy production by the year 2050. The main driver for this tremendous growth is falling battery cost.

The 150-page report, called New Energy Outlook (NEO) 2018, was authored by more than 65 analysts from around the world. This year’s outlook concluded that the impact of falling lithium-ion battery costs will drive huge growth for new renewable energy power capacity between 2018 and 2050.

During this timeframe, the authors predict investments of $8.4 trillion in wind and solar energy, with an additional $1.5 trillion into hydro and nuclear energy.

Since 2010, the cost of lithium-ion batteries per megawatt-hour has dropped by 80 percent.

“We see $548 billion being invested in battery capacity by 2050, two thirds of that at the grid level and one third installed behind-the-meter by households and businesses,” said Seb Henbest, head of Europe, Middle East and Africa for BNEF and lead author of NEO 2018, in a statement.

These investments should produce a 17-fold increase in solar power capacity worldwide and a six-fold increase in wind power capacity. Falling power generation costs will translate to far lower electricity bills than consumers, business or residential, see today. According to the report, the levelized cost of electricity (LCOE) from new photovoltaic plants should fall by 71 percent by 2050 and 58 percent for onshore wind. Between 2009 and 2018, the LCOE for solar and wind has dropped by 77 percent and 41 percent respectively.

Today, gas-fired power plants and other fossil fuel-based energy generators provide round-the-clock electricity — the so-called baseload. However, BNEF envisions a 2050 future where gas-fired plants are responsible for backup energy rather than baseload. Gas-fired generation is expected to rise by 15 percent between 2017 and 2050, but its share in the overall global electricity is set to decline.

The report doesn’t forecast a bright future for coal, which is expected to continue in its downward spiral. BNEF predicts the amount of coal burned in power stations will fall from 56 percent between 2017 and 2050.

Since renewable energy will occupy the top slot in the energy generation mix, BNEF predicts global emissions will fall, rather than rise, past an inflection point. The report estimates emissions from the global electricity sector rising by 2 percent between 2017 and 2027, after which it will fall by 38 percent in 2050.

The New Energy Outlook based its conclusions on the modeling of power generation country-by-country, and on the evolving cost dynamics of different technologies.  It assumes that existing energy policy settings around the world will remain in place until their scheduled expiry dates. It doesn’t assume additional government measures, meaning the evolution of renewable energy might actually be more aggressive if policy steps up its game in favor of more sustainable measures.