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Strong growth for renewable power through to 2030

BLOOMBERG New Energy Finance analysts say annual investment in new renewable power capacity will experience strong growth through to 2030.

According to the analysts, renewables are likely to experience a jump of 230 percent, to $630bn per year by 2030. Key drivers are improvements in the cost-competitiveness of wind and solar technologies relative to fossil fuel alternatives, as well as an increase in the roll-out of non-intermittent clean energy sources like hydro, geothermal and biomass.

These predictions for world energy markets come from Bloomberg’s Global Energy and Emissions Model, which integrates all of the main determinants of the energy future, including economic prosperity, global and regional demand growth, the evolution of technology costs, likely developments in policies to combat climate change, and trends in fossil fuel markets.

The analysts formed three possible scenarios for the way renewable energy markets will pan out over the next two decades: “New Normal”, “Barrier Busting” and “Traditional Territory”.

Considered the most likely scenario, the New Normal shows the investment requirement for new clean energy assets in the year 2030 at $630bn (in nominal terms), more than three times the investment in the renewable energy capacity that was built in 2012.

The projection for total installed renewable energy capacity by 2030 is 25 percent higher than in that previous forecast, at 3,500GW.

In the power sector, the research company’s latest forecasts project that 70 percent of new power generation capacity added between 2012 and 2030 will be from renewable technologies (including large hydro). Only 25 percent will be in the form of coal, gas or oil, the remaining being nuclear.

Bloomberg New Energy Finance predicts that wind and solar will take up the largest shares of new power capacity added by 2030, accounting for 30 percent and 24 percent respectively.

By 2030 renewable technologies will account for 50 percent of new power generation capacity installed around the world, up from 28 percent in 2012. In terms of power produced, the share of renewables will increase from 22 percent in 2012 to 37 percent in 2030.

Under the other two scenarios, there will be further growth in renewable energy demand. Capital requirements for renewable energy could reach $880bn by 2030, under the Barrier Busting assumptions ($9.3 trillion cumulative from 2013).

This would require an additional $2 trillion (22% increase) invested in supporting infrastructure such as long distance transmission systems, smart grids, storage and demand response.

Under a more pessimistic view of the world, in the Traditional Territory scenario, renewable energy investment requirements are projected to be $470bn by 2030 ($6.1 trillion cumulative).

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