Solar and wind energy will achieve a competitive edge by receiving 72% of worldwide investment in new electricity production between now and 2040. BNEF values that investment at $7.4 billion, according to an analysis of the field data that it compiles each year when preparing its report on the future of energy.
“Costs of new energy technologies are falling in a way that it’s more a matter of when than if,” says the report’s lead author Seb Henbest, quoted in an article on Bloomberg’s website. Still, it’s important to remember that these projections are for informational purposes only, and that there are lots of unknown.
Large-scale development of renewable energy will require world leaders to invest substantially in the energy sector. In a speech at Oxford University on March 22, Shell CEO Ben van Beurden stated that, “Of course, the energy transition is change on a global scale, and it must be embraced too. It is unstoppable. Every element of society—including Shell—has a role to play.”
According to Bloomberg’s data, the cost of electricity produced by photovoltaic panels has decreased nearly 75% since 2009, and is on track to decrease an additional 66% by 2040. Onshore wind energy production costs have decreased 30% since 2009, and should decrease 47% during the timeframe that the report looks at.
We must progress beyond the fossil-fuel energy model of energy on demand, toward a world where energy is produced cleanly. The challenge is that renewable energy is subject to natural fluctuations. For example, without viable long-term storage technologies, it is difficult to meet Northern Europe’s energy demands in the winter when there is very little daylight. Storing surplus solar or wind energy and redistributing it as needed is the key to the energy transition.