2015 New Energy Outlook

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      1. 2015 New Energy Outlook

      2. By 2040, demand for electricity will shift to developing countries thanks to fast-growing economies and rising populations.

        In developed nations, demand will remain stable or even decrease as the link between economic growth and electricity consumption weakens.

        Electricity demand – historical and forecast (index, 2012 = 100)
      3. To satisfy rising global demand, $12.2 trillion will be invested in power plants by 2040. Renewables will make up two-thirds of that investment with a large chunk of that going to solar.

        Global gross annual capacity additions by technology, 2015-2040 (GW)
      4. By far, the bulk of that $12.2 trillion will be invested in Asia-Pacific which will add more capacity in the next 25 years than the rest of the world combined...

        Cumulative capacity additions per region (GW)
      5. ...and half of that will be built in China which will attract $3.4 trillion of new investment – nearly double the total for all the Americas.

        Around 70% of capacity additions in China will be renewables – that’s 989GW of solar PV and 703GW of wind power.

        China cumulative capacity by technology, 2012-2040 (GW)
      6. While the US won't see the same flood of investment as China, its power mix is set to transform over the next 25 years. Cheap gas will be the dominant theme to 2020 but the long-term picture is cleaner and more diverse.

        The big story is small-scale PV, which will comprise a surprising 40% of total installed capacity additions from just 0.8% today.

        US cumulative capacity by technology, 2012-2040 (GW)
      7. Small-scale solar is also the big story in Europe. Despite weak growth in electricity demand, Europe will build 80% more capacity over the next 25 years, almost entirely driven by renewables.

        In 25 years, Europeans will see solar PV making up over a third of installed capacity while coal, gas and nuclear will decline by 30%.

        EU cumulative capacity by technology, 2012-2040 (GW)
      8. So what's driving these changes?

        In China today, coal is king, but as pollution regulations and a national carbon price make coal more expensive, utility-scale PV and onshore wind will become increasingly competitive.

        Levelised cost of electricity - China ($/MWh nominal)
      9. However it's a different story in the US. Cheap gas will dominate new power-generating capacity for the next six years but as the cost of renewables continue to fall, new onshore wind will be cheaper than new gas by 2023.

        Levelised cost of electricity - US ($/MWh nominal)
      10. In many parts of Europe, onshore wind is already the cheapest source of new electricity generation. By 2030, we expect both onshore wind and utility-scale PV to outcompete not only new fossil plants, but also existing thermal plants that have high running costs.

        Levelised cost of electricity - Europe ($/MWh nominal)
      11. Despite significant growth in renewables, fossil fuels will maintain a 44% share of generation in 2040 – albeit down from two-thirds in 2014. Some 1,291GW of new coal-fired capacity will be added to 2040, predominantly in developing countries where supply is relatively cheap and climate change policies weak or yet to be implemented.

        Global power generation by technology, 2012-40 (TWh)
      12. As a result of these trends, CO2 emissions from the power sector will not peak until 2029 and by 2040 they will be 13% above current levels.

        Power sector CO2 emission trajectory for top three emitters, 2012-40 (Mt)

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