At least 455GW of new solar PV capacity will need to be installed each year by the end of this decade for the world to reach net zero status by 2050, new analysis by BloombergNEF (BNEF) has found.
The research and consultancy firm has published the 2021 edition of its New Energy Outlook, which maps the world’s transition to net zero status in three specific trajectories labelled ‘Green’, ‘Red’ and ‘Gray’.
The Green scenario, wherein the majority of the heavy lifting with regards decarbonisation of the power sector is done by a mix of solar PV and wind, will require a trebling of annual solar installation rates by the end of the decade.
Furthermore, the market potential for solar PV under BNEF’s Green scenario states that as much as 20TW of solar may be installed by 2050, equivalent to an average of 632GW of solar PV being installed each year over the next 30 years.
Renewables installations of that ilk will require energy storage deployment to increase significantly too, with at least 245GWh of energy storage needed to be deployed each year by 2030 to facilitate the growth of renewable power.
The need for such significant quantities of renewables power generation is due to its status as the “backbone” of the energy transition, the report reads, with solar PV and wind requiring an urgent acceleration for renewable power to contribute. The next nine years are critical to get global markets on track and the power sector must make significant progress this decade. More than 75% of total emissions reductions required this decade must come from the power sector, a fact which will require rapid deployment of solar PV and wind.
Compared to 2019 levels, BNEF’s analysis shows power sector emissions must fall by 57% by 2030 and by 89% by 2040, to pave the way for greater electrification of sectors where emissions are harder to abate.
The energy transition will, as BNEF’s analysis shows, require a significant increase in annual investment. Depending on the model, BNEF argues that between US$92 – 173 trillion of investment will be needed to achieve net zero. That would require at least a doubling of current investment trends, rising from an annual investment of US$1.7 trillion invested in 2020 to between US$3.1 – 5.8 trillion a year each year for the next three decades.
But that investment will not be in vain, and would indeed pale compared to the costs of mitigating climate disasters associated with inaction. “The capital expenditures needed to achieve net zero will create enormous opportunities for investors, financial institutions and the private sector, while creating many new jobs in the green economy,” Jon Moore, chief executive at BNEF, said.
BNEF’s Green scenario is not the only plausible route to net zero. Under its Red model, which prioritises emergent technologies such as green hydrogen and modular nuclear reactors, nuclear power would provide two-thirds of total primary energy demand by 2050. Likewise under BNEF’s Gray model, which envisages the maturation of carbon capture usage and storage technology, coal and gas continue to be deployed with their carbon emissions captured, with wind and solar contributing just 26% of global energy by 2050.
By means of comparison, under BNEF’s Green scenario, solar and wind would see its share of primary energy usage soar from 1.3% in 2020 to 15% in 2030 and 70% by 2050.
Liam Stoker, editor in chief, PV Tech
The BNEF New Energy Outlook, and specifically its Green model, poses a major, rapid upscaling of not just solar PV deployment, but manufacturing too. Investment will have to flow throughout the value chain on an unprecedented scale in order to even get close to the figures mentioned in this report, but the size of the prize is also of undeniable measure.
But perhaps the most important takeaway from the report is the need for expedience. “There is no time to waste,” says BNEF’s chief economist Seb Henbest. “If the world is to achieve or get close to meeting net zero by mid-century, then we need to accelerate deployment of the low-carbon solutions we have this decade – that means even more wind, solar, batteries, and electric vehicles, as well as heat pumps for buildings, recycling and greater electricity use in industry, and redirecting biofuels to shipping and aviation.”
This echoes calls heard within other reports this month, such as BP’s Statistical Review of World Energy, which highlighted how the growth rate of renewables in numerous markets fell below the 10-year average last year, while the International Energy Agency also stated that power demand soared by 5% in the first half of 2021, around half of that demand was met by fossil fuel sources.
With just months to go until COP26 in Glasgow, Scotland, the message to global economies is loud and clear: We must accelerate the transition now, before it’s too late.