Contrary to what the fossil fuel industry may want you to believe, the transformation of the world’s energy supply to clean energy sources is well underway, and will soon be kicked into high gear, according to a new report from Bloomberg New Energy Finance (BNEF).
The "New Energy Outlook" report, released Monday, finds that at least $11.4 trillion will be invested in new power-generating capacity over the next 25 years, and 60 percent of that will fund wind and solar power.
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According to the report, we’ll reach a tipping point in 2027, when new wind and solar power actually become cheaper than running existing coal and gas generators in much of the world. This will cause an acceleration in the deployment of clean energy technologies.
However, explosive emissions growth in India and Southeast Asia mean that the world is still not on the path necessary to limit global warming to the increases of 2 degrees Celsius, or 3.6 degrees Fahrenheit, that were targeted by the Paris Climate Agreement.
To meet that goal, an additional $5.3 trillion in new clean energy investment worldwide would be needed during the next 25 years.
“Some $7.8 trillion will be invested globally in renewables between 2016 and 2040, two-thirds of the investment in all power generating capacity, but it would require trillions more to bring world emissions onto a track compatible with the United Nations… climate target," said Seb Henbest, the lead author of the report, in a press release.
Nevertheless, compared to other recent reports from BP and the DOE’s Energy Information Administration, the BNEF report presents a far more optimistic outlook for the expanded use of zero or low-emissions technologies, from solar panels to electric vehicles.
The BNEF report contains several key predictions. When it comes to solar power, BNEF analysts think a reduction in the cost of developing, financing and operating new utility-scale solar installations will help drive costs lower. The projections foresee the spread of rooftop solar in Europe, Australia and the U.S., and soon in India and China as well.
By 2040, the BNEF report finds, Germany, Mexico, the UK and Australia will "all have average wind and solar penetration of more than 50 percent."
According to the report, an increase in solar and wind power generation will be accompanied by a decrease in coal and gas power plants over the next 25 years. But some coal plants will still be needed, particularly in developing countries like China and India.
What happens with global fossil fuel emissions, and therefore our ability to contain global warming to at or below 2 degrees Celsius or 3.6 degrees Fahrenheit above preindustrial levels, will hinge on what happens in the Asia-Pacific region.
This is because energy demands in the Asia-Pacific region are expected to "experience colossal growth," the report found, with a tripling of installed new power generation capacity.
While solar and wind will make major gains, coal will still be this region’s biggest source of electricity through 2040. This means that global power sector greenhouse gas emissions will not peak until after 2040.
The BNEF report is also bullish on the future for electric vehicles, projecting that they will make up 25 percent of the global car fleet by 2050, which would drive down battery and energy storage costs but increase electricity demand.