fossil fuel era end is near
According to the new BNEF analysis, coal and gas will rapidly fall down in less than 10 years.
The process of producing electrical energy, very soon will change substantially, since the era of the growing demand for fossil fuels over less than a decade. These data were presented at Bloomberg New Energy Finance study for the next 25 years.
The peak of fossil fuels, was achieved not because of dwindling reserves of coal and gas, but because the world powers are cheaper alternatives. Demand peaks early, because electric cars and affordable solar cells are developing more rapidly than previously expected.
We present our 8 major changes that are expected energy markets in the near future.
1. Golden age of gas is not
Since 2008, the single most important force in American energy markets has been an abundance of cheap natural gas, caused by the fracture. Cheap gas ravaged the American coal industry and has inspired talk of a “fuel passage”, which will switch the whole world from coal to renewable energy. However, it’s not like this was destined to happen.
According to BNEF, the cost of wind energy and solar power drops too quickly to allow gas to dominate on a global scale. This year, analysts have reduced their long-term forecasts on the prices of coal and natural gas by one-third, but even very low prices will not be enough to stop the rapid global transition to renewable energy.
“You can not fight the future” – said Seb Henbest, lead author of the report. “The peak year for coal, oil and gas 2025”.
2. Renewable energy sources are attracted USD 7.8 trillion
Demand for electricity humanity is still rising, and investments in fossil fuels make up a whole of $ 2.1 trillion by 2040. However, investment in renewable energy sources is $ 7.8 trillion, including 3.4 trillion dollars in solar energy, 3.1 trillion dollars in wind energy and 911 billion dollars into the energy of the water.
Already, in many regions of the lifetime costs of wind energy and the sun is less than the cost of building new manufacturing plants for fossil fuels, and this trend will continue. By 2027 there will be something impressive. The construction of new wind farms and solar fields will be cheaper than the management of existing coal and gas generators. “This is a turning point that will lead to the rapid spread and development of renewable energy,” – according to BNEF.
3. Electric cars will save energy markets
In the discussion of the fossil fuel era sunset the focus is on the production of electricity, rather than transportation fuels. In the automotive industry to achieve peak oil, it will take a little more time. However, the rapid growth of the electric car sector has a negative impact on the oil market, which in turn carries profound implications for the electricity market.
In fact, it is impossible to think of a better time for electric cars in the developed economies. For example Germany, where productivity growth means that no electric cars, electricity demand would be directed to a prolonged and destabilizing decline. According to BNEF, electric cars slow down this trend.
The introduction of electric vehicles will depend on the country and the continent, but in general they will add 8% to the total electricity consumption of humanity in 2040.
4. The batteries will be connected to the system
Renewable energy and electric cars create a cycle of growing demand. Unlike fossil fuels – where the increase in demand leads to higher prices – new energy technologies, increasing demand creates a larger volume, which leads to a drop in prices.
Expansion of the production of electric cars increases the demand for renewable energy and reduces the cost of the batteries. And because the costs are reduced, the batteries may increasingly be used to store solar energy.
5. A sharp drop in prices for solar and wind energy
Each doubling of solar panels in the world, reducing costs by 26%. Solar technology is not a fuel, and therefore to become even cheaper and more efficient over time. This formula is the driving force of the energy revolution.
wind power prices are also rapidly falling fast – 19% for each doubling. According to BNEF, wind and solar energy will be the least expensive forms of electricity production in most of the world by 2030.
6. capacity utilization “go crazy”
One of the most rapidly developing stories in renewable energy is a change in what is known as the capacity utilization. This is the percentage of the maximum capacity of the power plant, which is achieved for a long time.
Consider the wind farm. Even at high altitudes, the wind is not constant and its strength varies depending on the time of day, weather and season. Thus, a station which can “screwed” 100 megawatts of electricity during the windy most times, delivers only 30% of the average annual rate. Thus the capacity utilization rate of 30%.
As technology continues to improve, designers are more successful location for the station, and the coefficients of renewable energy capacity increase. According to BNEF, some wind farms in Texas have already reached capacity utilization rates of 50%.
Improving capacity utilization rates make renewable energy more attractive. But coefficients using gas power and coal-fired power stations are also changing. During the construction of a solar or wind power, the marginal cost of electricity that they produce almost zero – free electricity, while coal and gas production plants require more fuel for each new watt of produced. If your power company have the ability to choose, you will always choose a free electricity.
Since natural gas and coal-fired power plants increasingly lose their jobs in favor of renewable energy sources, their capacity utilization rates will take a big hit, and the lifetime value of industrial enterprises to grow. Take a look at them as a precious reserve fuel for the cheapest renewable energy sources.
7. The new polluter
China, the largest and fastest growing polluter, has become a major global environmental problem over the past few decades. However, this perception may change very quickly. According to BNEF, China’s booming economy and its significant jump from coal and to renewable energy means that it is the largest carbon reduction will occur here than in any other country in the next 25 years. This is great news for the environment, which represents a significant change in the outlook for global energy.
As for India, which is one of the biggest threats to the efforts to curb climate change, the demand for electricity will increase by 4 times in 2040, and the country will have to invest in a variety of energy sources to meet this new need overwhelming. In India, home to hundreds of millions of people with minimal access to electricity, and the country is literally sitting on a mountain of coal. India plans to use it.
8. Transformation continues
In BNEF report, the prospect of carbon dioxide emissions has improved significantly over the past year, despite the low prices for fossil fuels. Appeal to energy renewable happening impressively fast, but not fast enough to reduce the levels of global warming.
Without additional action by governments, global carbon dioxide emissions from the energy sector will peak in the 2020s. This is not enough to prevent warming of the Earth surface of more than 2 degrees Celsius, according BNEF.
BNEF report focuses on the fundamental economics: the price, demand, supply. The report does not include a policy aimed at combating climate change, as well as technological progress.
Apparently in the future we are waiting still many surprises.
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