And in Europe, renewable energy will increase its share of generation capacity from 40 per cent in 2012 to 60 per cent in 2030, while the share of fossil-fuel sources such as coal and gas will fall from 48 per cent to 27 per cent.
The study from research company Bloomberg New Energy Finance – called BNEF 2030 Market Outlook – is based on modelling of electricity market supply and demand, technology cost evolution and policy development in individual countries and regions.
It forecasts that the Asia-Pacific will account for more than half of the 5 TW of net new power capacity that will be added worldwide in the next decade and a half and this will equate to $3.6 trillion of investment in the region.
While it predicts that fossil fuel power sources such as coal and gas will continue to grow in the region, despite concerns about pollution and climate change, the biggest growth will be in renewables, with some $2.5 trillion invested and 1.7 TW of capacity added.
Milo Sjardin, head of Asia-Pacific for Bloomberg New Energy Finance, said: “The period to 2030 is going to see spectacular growth in solar in this region, with nearly 800 GW of rooftop and utility-scale PV added. This will be driven by economics, not subsidies ‒ our analysis suggests that solar will be fully competitive with other power sources by 2020, only six years from now.”
However Sjardin added that this “does not mean that the days of fossil-fuel power are over – far from it. Rapid economic growth in Asia will still drive net increases of 434 GW in coal-fired capacity and 314 GW in gas-fired plant between now and 2030. That means that emissions will continue to increase for many years to come.”
BNEF forecasts that China will add a net 1.4 TW of new generating capacity between now and 2030 to meet a massive surge in power demand. “This will require capital investment of around $2 trillion, of which 72 per cent will go to renewables such as wind, solar and hydro.”
Meanwhile, Japan’s power sector will experience a very different trajectory in the next 16 years, with electricity demand only regaining its 2010 levels in 2021 and then growing at a modest 1 per cent a year, as efficiency gains partially offset economic growth.
The report states that Japan will invest around $203bn in new power generation capacity by 2030, with $116bn going to rooftop solar and $72bn to other renewable technologies.
India is forecast to see a quadrupling of its power generation capacity, from 236 GW in 2013 to 887 GW in 2030, with 169 GW of the additions taking the form of utility-scale solar and 98GW onshore wind. Hydro will see capacity boosted by 95 GW, coal by 155 GW and gas by 55 GW. This will take India’s total investment to 2030 to $754bn, with $477bn of that in renewables.
Meanwhile in Europe, the report forecasts that 557 GW of new renewable capacity will come online by 2030.
In the same period, it predicts coal-fired capacity will shrink from 195 GW to 125 GW, “as emission regulations bite and the cost-of-generation comparison shifts in favour of renewables”, while gas-fired capacity increases modestly from 257 GW to 280 GW.
Seb Henbest, BNEF’s head of Europe, Middle East and Africa, said: “Our research shows that further improvements in the economics of solar and wind will mean they are increasingly installed without subsidy in the years ahead. We expect Europe to invest nearly $1 trillion to increase its renewables capacity by 2030, with rooftop PV accounting for $339bn and onshore wind $250bn.
“Our model suggests that power demand in Europe will increase by only 9 per cent between 2014 and 2030, as energy efficiency improvements take effect. This, and the growing cost advantage of wind and solar, will enable the continent to cut its power sector emissions from 1.3bn tonnes of CO2 in 2013 to 564m tonnes in 2030.”
BNEF states that the only major renewable power technology to remain subsidised in the 2020s will be offshore wind and the report predicts that Europe will add 64 GW of offshore wind capacity between now and 2030, involving an investment of $296bn, “as governments continue to back it for energy security and industrial development reasons”.
Germany is expected to see $171 bn of investment in renewable generation, with small-scale solar taking $69bn of that, offshore wind $70bn and onshore wind $18bn. The UK is forecast to invest $197bn, with offshore wind taking $89bn, small-scale solar $49bn and gas-fired capacity – installed partly for balancing purposes – taking $8bn.
Globally, BNEF expects $7.7 trillion to be invested in new generating capacity by 2030, with 66 per cent going on renewable technologies including hydro. Out of the $5.1 trillion to be spent on renewables, the Asia-Pacific will account for $2.5 trillion, the Americas $816bn, Europe $967bn and the rest of the world, including the Middle East and Africa, $818bn.
The report states that “fossil fuels will retain the biggest share of power generation by 2030 at 44 per cent, albeit down from 64 per cent in 2013. Some 1073 GW of new coal, gas and oil capacity worldwide will be added over the next 16 years, excluding replacement plant.
“The vast majority will be in developing countries seeking to meet the increased power demand that comes with industrialisation, and also to balance variable generation sources such as wind and solar. Solar PV and wind will increase their combined share of global generation from 3 per cent last year to 16 per cent in 2030.”