By 2040, the world’s power-generating capacity mix will have transformed: from today’s system composed of two-thirds fossil fuels to one with 60% from zero-emission energy sources. Renewables will command just under 60% of the 9,786GW of new generating capacity and two-thirds of the $12.2 trillion of investment.
The 5 shifts that will shake the global electricity system
Solar, solar everywhere. The further decline in the cost of photovoltaic technology will drive a $3.7 trillion surge in investment in solar, both large-scale and small-scale.
Power to the people. Some $2.2 trillion of this will go on rooftop and other local PV systems, handing consumers and businesses the ability to generate their own electricity, to store it using batteries and – in parts of the developing world – to access power for the first time.
Demand undershoots. The march of energy-efficient technologies in areas such as lighting and air conditioning will help to limit growth in global power demand to 1.8% per year, down from 3% per year in 1990-2012. In OECD countries, power demand will be lower in 2040 than in 2014.
Gas flares only briefly. Natural gas will not be the “transition fuel” to wean the world off coal. North American shale will change the gas market, but coal-to-gas switching will be mainly a US story. Many developing nations will opt for a twin-track of coal and renewables.
Climate peril. Despite investment of $8 trillion in renewables, there will be enough legacy fossil-fuel plants and enough investment in new coal-fired capacity in developing countries to ensure global CO2 emissions rise all the way to 2029, and will still be 13% above 2014 levels in 2040.
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