Rise of renewables

Rise of renewables

Electrification, powered by renewable sources, is the biggest contributor to reduced energy intensity

The main enabler for rapid solar PV growth will be its continued plunging costs, set to drop to less than 60% of today’s levels by mid-century. Compared with nuclear, hydropower and wind, solar PV installations also tend to attract less opposition from environmentalists. Once adjusted for capacity factors, installed capacity will be some 12 TW by 2050, generating 33% or 19 PWh, of the world’s electricity. Variability will complicate but ultimately not hinder solar PV’s deployment, owing to a host of flexibility options, notably cheap and efficient battery storage, increased connectivity and demand-side response. 

However, solar will receive the lowest market price of all generation technologies owing to its variability, and that price squeeze will intensify as the share of solar grows and it starts to compete with itself. That, combined with storage costs, explains why gas retains a considerable share of power generation through the 2040s. 

By 2050, Greater China will have a 40% share of global installed PV capacity, followed by the Indian Subcontinent at 17%. 

We forecast electricity generation from wind to increase from 1.1 PWh/yr in 2017 to 17 PWh in 2050, delivering 29% of the world’s electricity, with Greater China, North America, Europe and Indian Subcontinent providing the largest output. We foresee onshore wind to be more cautiously supported in some developed countries, while offshore wind will receive strengthened support in countries with limited land areas. Thus, the global share of offshore in total wind electricity generation will increase steadily from 4.5% in 2017 to 40% of global wind in 2050, with 1.5 TW installed. 

At present, the capacity factor of all onshore wind turbines in the world is 21%. With continued increase in turbine, blade and tower size, we expect this to increase to 34% by 2050, making total installations 3.4 TW. For offshore wind turbines, the average capacity factor is already at 29% due to more favourable wind conditions offshore. We expect this to rise to 51% because of the factors listed above and the introduction of commercially-viable floating offshore wind.