Five seismic energy shifts over the next 25 years

In 2040 we will be living in a (warmer) world where more consumers have seized control of their own power, demand growth will have slowed down, but prospects for the climate are bleak. These are the headline messages from Bloomberg New Energy Finance’s (BNEF) New Energy Outlook 2015 report.

The report, which says that over the next 25 years energy companies, utilities and policymakers will face unprecedented pressure, identifies five major shifts in energy between now and 2040:

• the continuing decline in the cost of solar PV means there will be a $3.7tn surge in investment in solar;
• $2.2tn of this will appear locally with batteries allowing consumers more power to generate their own electricity;
• energy efficient technologies will reduce global power demand growth to 1.8% per year;
• gas will be limited as a transition fuel in the US thanks to shale, while other countries will opt for a mix of coal and renewables; and
• legacy fossil fuel plants mean that despite an $8tn investment in renewables, emissions will still be 13% above 2014 levels in 2040.

The predicted small-scale solar boom will see worldwide capacity of rooftop, building-integrated and local PV soar from 104 GW in 2014 to around 1.8 TW in 2040, a 17-fold increase, says the report. This will be made possible by a 47% crash in the cost of solar projects per MW as conversion efficiencies improve and the industry moves to new materials and more streamlined production methods.

On emissions, Seb Henbest, Head of Europe, Middle East and Africa for Bloomberg New Energy Finance and lead author of the report said: ‘The message for international negotiators preparing for the Paris climate change conference in December is that current policy settings – even combined with the vast strides renewables are making on competitiveness – will not be enough. Further policy action on emissions will be needed.'