The latest report by Bloomberg New Energy Finance (BNEF) reveals just how stunningly rapid the clean energy transition is. Renewables are now the cheapest form of new electricity generation across two-thirds of the world — cheaper than both new coal and new natural gas power. What makes this even more impressive is the fact that just five years ago, renewables were the cheapest source of new power in only 1% of the world, explains BNEF in its New Energy Outlook 2019.
Equally remarkable is BNEF’s projection that says by 2030, wind and solar will “undercut existing coal and gas almost everywhere.” Which means that within a decade it will be cheaper to build and operate new renewable power plants than it will be to just keep operating existing fossil fuel plants — even in the United States. This inspiring analysis of solar and wind definitely puts the natural gas industry on the spot.
What has brought upon this much-needed transformation? The drastic drop in both solar and wind power prices this decade: Since 2010, wind power has dropped 49% in cost and solar plummeted 85%. The best part about that is, BNEF projects prices will continue to fall for the next decade and beyond, to the point that the cost of solar panels and wind power will drop by another third by 2030. The cost is expected to continue to decrease to the point that by 2050 solar electricity will drop 63% compared to today, and the cost of wind will likely drop 48%.
Thanks to these continuing price drops, the world is projected to invest a whopping $4.2 trillion in solar power generation in the next three decades. All this investment will make it where solar will jump from a mere 2% of global power generation today to a remarkable 22% in 2050. Meanwhile, global investment in wind power will likely hit $5.3 trillion, and wind is expected to rise from 5% of global electricity today to 26% in 2050.
What this all means is that the world is shifting from a civilization that generates two-thirds of its power from fossil fuels to one that generates two thirds from zero-carbon sources within three decades. As BNEF puts it, we are “ending the era of fossil fuel dominance in the power sector.”
