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Bloomberg NEF forecasts falling battery prices enabling surge in wind and solar to 50% of global generation by 2050

Wind and solar power generation will surge to almost 50% of world generation by 2050 (“50 by 50”), supported by precipitous reductions in cost, and the advent of cheaper and cheaper batteries that will enable electricity to be stored and discharged to meet shifts in demand and supply, according to the new annual Bloomberg NEF New Energy Outlook (NEO) 2018.

This year’s outlook is the first to highlight the significant impact that falling battery costs will have on the electricity mix over the coming decades. BNEF predicts that lithium-ion battery prices, already down by nearly 80% per megawatt-hour since 2010, will continue to tumble as electric vehicle manufacturing builds up through the 2020s.

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.

The arrival of cheap battery storage will mean that it becomes increasingly possible to finesse the delivery of electricity from wind and solar, so that these technologies can help meet demand even when the wind isn’t blowing and the sun isn’t shining. The result will be renewables eating up more and more of the existing market for coal, gas and nuclear.

—Seb Henbest, head of Europe, Middle East and Africa for BNEF and lead author of NEO 2018

NEO 2018 sees $11.5 trillion being invested globally in new power generation capacity between 2018 and 2050, with $8.4 trillion of that going to wind and solar and a further $1.5 trillion to other zero-carbon technologies such as hydro and nuclear.

This investment will produce a 17-fold increase in solar photovoltaic capacity worldwide, and a sixfold increase in wind power capacity. The levelized cost of electricity (LCOE) from new PV plants is forecast to fall a further 71% by 2050, while that for onshore wind drops by a further 58%. These two technologies have already seen LCOE reductions of 77% and 41% respectively between 2009 and 2018.

Coal emerges as the biggest loser in the long run. Beaten on cost by wind and PV for bulk electricity generation, and batteries and gas for flexibility, the future electricity system will reorganize around cheap renewables—coal gets squeezed out.

—Elena Giannakopoulou, head of energy economics at BNEF

The latest BP Annual Energy Outlook found that in 2017, renewables grew strongly in 2017, with wind and solar leading the way. However, coal consumption was also up, growing for the first time since 2013. Among the related datapoints:

  • Coal consumption growth in 2017 was driven largely by India (18 mtoe), with China consumption also up slightly (4 Mtoe) following three successive annual declines during 2014-2016. OECD demand fell for the fourth year in a row (-4 mtoe).

  • Coal’s share in primary energy in 2017 fell to 27.6%, the lowest since 2004.

  • World coal production grew by 105 mtoe or 3.2%, the fastest rate of growth since 2011. Production rose by 56 mtoe in China and 23 mtoe in the US.

BNEF forecasts the role of gas in the generation mix will evolve, with gas-fired power stations increasingly built and used to provide back-up for renewables rather than to produce base-load, or round-the-clock, electricity.

BNEF sees $1.3 trillion being invested in new capacity to 2050, nearly half of it in gas peaker plants rather than combined-cycle turbines. Gas-fired generation is seen rising 15% between 2017 and 2050, although its share of global electricity declines from 21% to 15%.

Fuel burn trends globally are forecast to be dire in the long run for the coal industry, but moderately encouraging for the gas extraction sector. NEO 2018 sees coal burn in power stations falling 56% between 2017 and 2050, while that for gas rises 14%.

The bearish outlook for coal means that NEO 2018 offers a more upbeat projection for carbon emissions than the equivalent report a year ago. BNEF now sees global electricity sector emissions rising 2% from 2017 to a peak in 2027, and then falling 38% to 2050.

However, BNEF notes, this would still mean electricity failing to fulfill its part of the effort to keep global CO₂ levels below 450 parts per million.

Even if we decommissioned all the world’s coal plants by 2035, the power sector would still be tracking above a climate-safe trajectory, burning too much unabated gas. Getting to two degrees requires a zero-carbon solution to the seasonal extremes, one that doesn’t involve unabated gas.

—Matthias Kimmel, energy economics analyst at BNEF

BNEF’s New Energy Outlook is underpinned by the evolving economics of different power technologies, and on projections for electricity demand fundamentals such as population and GDP. It assumes that existing energy policy settings around the world remain in place until their scheduled expiry, and that there are no additional government measures.

Among the other highlights of NEO 2018 are high penetration rates for renewables in many markets (87% of total electricity supply in Europe by 2050, and 55% for the US, 62% for China and 75% for India). It also highlights a shift to more decentralization in some countries such as Australia, where by mid-century consumer PV and batteries account for 43% of all capacity.

NEO 2018 also analyzes the impact of the electrification of transport on electricity consumption. It estimates that electric cars and buses will be using 3,461 TWh of electricity globally in 2050, equivalent to 9% of total demand. About half of the necessary charging is forecast to be done on a dynamic basis, taking advantage of times when electricity prices are low because of high renewables output.

This analysis draws on BNEF’s latest Electric Vehicle Outlook, published on May 21, which predicted that EVs would account for 28% of global new car sales by 2030, and 55% by 2040. Electric buses are expected to dominate their market even more decisively, reaching 84% global share by 2030.

Comments

HarveyD

It looks like the 830+ CPPs in USA/China/India/RoW may be progressively replaced by Wind/Solar power plants with storage and Hydro/NPPs. The soonest the better.

The arrival of (ground-air-sea) electrified vehicles will need more (up to +20%) clean e-generation capacity.

Engineer-Poet

Money quote:

BNEF forecasts the role of gas in the generation mix will evolve, with gas-fired power stations increasingly built and used to provide back-up for renewables rather than to produce base-load, or round-the-clock, electricity.

This "back-up" role requires fast starting and ramping.  Highly efficient CCGTs can't do this; it requires simple-cycle gas turbines, which burn at least 50% more fuel per MWh.  The upshot of this is that any "renewable" penetration less than about 33-35% results in more gas burned than using CCGT for base load!

The wind plants and solar plants, are GAS plants.

Gasbag

“This "back-up" role requires fast starting and ramping. Highly efficient CCGTs can't do this; it requires simple-cycle gas turbines, which burn at least 50% more fuel per MWh. “

Sounds like the type of challenge talented engineers thrive on. Fast start CCGTs, intermittent plus storage, V2G, load shifting. There are options available to creative engineers.

“The upshot of this is that any "renewable" penetration less than about 33-35% results in more gas burned than using CCGT for base load!”

If that is so then it sounds like renewables over 35% is the obvious solution :)

Gasbag

Has anyone noticed the Excel PPA bids? Wind plus storage, solar plus storage, and solar and wind plus storage bids all came in under 3 cents per kW. That is well below the Nextra record of 4.5 cents. It was just a couple of years ago Hawaii paid 13.9 cents for solar plus storage. The Excel bids are for 2023 while the Nextra bid was for 2019 but obviously as the article points out the rapid decline of battery prices is a game changer.

Davemart

Gas turbines are limited in their response times and need to either use spinning reserve, ie they run but don't produce output until needed, which is wasteful or battery back up.

For electrolysers however:

'ITM Power (AIM: ITM), the energy storage and clean fuel company, is pleased to announce that it has achieved sub-second response times for both its refuelling station equipment and also its Power-to-Gas equipment. The successful completion of the InnovateUK supported Power Electronics project has demonstrated a full system “turn on” response of 40 cycles (800ms) and “turn off” in 7 cycles (140ms). This qualifies ITM Power’s electrolyser systems for frequency response services more demanding than the existing primary grid balancing payment structure and has the potential to command higher availability payments. '
http://www.itm-power.com/news-item/rapid-response-electrolysis-for-power-to-gas-energy-storage

Engineer-Poet
Sounds like the type of challenge talented engineers thrive on.

That's the kind of facile declaration that make engineers send out their resumés for jobs with saner management.  Here's a list of problems that cycling causes to power plants.  Here's a bit more strongly worded and detailed list.  Here's a graphical description of where and how cycling causes damage.

If that is so then it sounds like renewables over 35% is the obvious solution :)
35% is about the limit, because the fraction of supply can't really go over the capacity factor of the source.  This puts you right back where you were with CCGT only, except with a pile of other hardware to buy and maintain.

Germany's "renewable" grid emitted 560 gCO2/kWh last year.  Nuclear France's emitted... 58 grams.  Renewables are a scam.

The successful completion of the InnovateUK supported Power Electronics project has demonstrated a full system “turn on” response of 40 cycles (800ms) and “turn off” in 7 cycles (140ms). This qualifies ITM Power’s electrolyser systems for frequency response services more demanding than the existing primary grid balancing payment structure and has the potential to command higher availability payments.

Now, you see that?  THAT is what an actual advance looks like.  PTG is a scam, but if it can manage grid regulation it's providing actual value too.

Calgarygary

If you have enough storage in the system, I'd expect that would be adequate to respond to short term spikes in demand while, weather forecasting and demand analysis could be used to anticipate shortfalls from renewable sources on a longer term basis. If you have a forecast for a period of overcast weather it should be fairly easy to calculate the solar shortfall and use the FF reserve plants to charge up the batteries and/ or top up the grid. Not sure peaker plants will be required.

Gasbag

“That's the kind of facile declaration that make engineers send out their resumés for jobs with saner management”

And that is probably a good thing for both parties. If you’re taking on a truly challenging project you don’t want a staff of 9-5 mercenaries.

“35% is about the limit”

If it wasn’t obvious I was teasing. Go back and read your original post. If you haven’t realized it yet you obviously wrote the opposite of what you meant.

I think that you also meant intermittent renewables rather than renewables. There are a number of examples to the contrary though those tend to be smaller scale. California is slated to reach your stated limit year after next and blow right on past it afterwards.

Gasbag

“Gas turbines are limited in their response times ”

Batteries don’t have the same ramp up limitations. Last year southern Cal Edison(SCE) added batteries to a peaker plant and improved response times and cut fuel usage. SCE claimed this was a first. Although it might seem to be an obvious solution it no doubt became financially viable only recently with the dramatic declines in battery prices and improvements in battery life spans.

I recall an interview a few years ago with a Pacific Gas and Electricity (PG&E) engineer Re: the use of batteries. He was very positive about their potential but maintained they were not financially viable at the prices then available. He maintained that at $250 per kWh they had limited applications but at $150 per kWh they would be in big time. I mention this because BNEFs reports have batteries at the pack level on pace to cross the $150 per kWh milestone next year.

Fast start CCGTs or FAst CYcling (FACY) are one solution. Second generation FACYs claim efficiency of 59% with hot starts as low as 30 minutes. That is well below the four hours of storage required of intermittent renewables in recent bids.

Engineer-Poet
Batteries don’t have the same ramp up limitations.

True.  As AC Propulsion noted going on 2 decades ago, batteries make good resources for grid regulation.  But we really should be leveraging vehicle traction batteries, not wasting our efforts on stationary batteries that do nothing else.

Second generation FACYs claim efficiency of 59% with hot starts as low as 30 minutes.

How long for a cold start?  How many starts before cycling wear requires an overhaul?  How much fuel is burned during the startup process, and what does this do to the overall efficiency and emissions?

One of the things I have suggested is making the intermittent sources give payment in kind to their backup generators, to keep them hot and ready to go.  One of the details in the pages I linked is that newer CCGTs have flue dampers to reduce heat loss when idle and stay in the "hot start" state for longer.  Auxiliary boilers to keep steam systems hot (a parasitic load) were also mentioned.  Why not electric heaters in the HRSGs, and electric auxiliary boilers?  In-kind payments from the intermittents could keep these systems powered by electricity rather than fuel, and reduce overall emissions.

Engineer-Poet
If you’re taking on a truly challenging project you don’t want a staff of 9-5 mercenaries.

If you get assigned to a challenging project you want to be sure that management did a proper feasibility study first, so that you aren't left holding the bag when something goes wrong.

If it wasn’t obvious I was teasing.

Many a truth is spoken in jest.

I think that you also meant intermittent renewables rather than renewables.

I mean the ones currently (a) subsidized as such and (b) projected for growth.  Hydro is neither, and there doesn't seem to be much room for expansion of geothermal.

California is slated to reach your stated limit year after next

Crazyfornia is not an isolated grid and only the overall performance matters.  Importing coal-fired power from Wyoming may help CA reach its state-wide RE goals, but is insane as climate policy.

HarveyD

By 2050 (and probably many years before) much lower cost longer lasting batteries will be available as ideal storage units for REs.

Improved higher power ultra quick ultra-caps could also be combined with batteries to maximize the use of REs.

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