Report finds trillions needed for renewables in order to meet carbon targets
Between 2016 and 2040, US $7.8 trillion will be invested in renewable energy worldwide, but according to new findings by Bloomberg New Energy Finance (BNEF), it will take trillions in further investment to bring world emissions on track with the United Nations 2°C warming target.
The report, titled New Energy Outlook 2016 (NEO), predicts that funding for coal and gas generation will continue, especially in emerging economies, though fossil-fuelled power will ultimately attract $2.1 trillion in investments.
The forecast examines how the world’s energy mix will change over the next 24 years, and has found that a further $5.3 trillion needs to be invested in zero-carbon power to prevent CO2 rising to dangerous levels in the atmosphere. Coal is thought to be the single-most important factor in achieving international carbon reduction goals.
BNEF has identified India as a key player in determining the global emissions trajectory, as it continues to rely heavily on coal power to meet its ever-growing demand. Its energy sector emissions are projected to triple by 2040, despite $611 billion and $115 billion invested in renewables and nuclear, respectively.
China, which has long topped the list of the world’s biggest coal consumers, is increasingly incorporating renewables into its energy mix. The report predicts that coal generation in the world’s second-largest economy will actually be 21 percent lower than the figure projected in last year’s NEO.
Clean energy will be most prominent in Europe by 2040, with 70 percent of power generated through renewable sources, like wind, solar and hydro. The United States will similarly up its share, with 44 percent of its energy eventually coming from renewables.
The NEO 2016 projection does not assume any further carbon-reduction policies will be implemented after 2020.
Elena Giannakopoulou, Senior Energy Economist on the project, said: “One conclusion that may surprise is that our forecast shows no golden age for gas, except in North America. As a global generation source, gas will be overtaken by renewables in 2027. It will be 2037 before renewables overtake coal.”
Some 65 analysts worked to produce the findings. The full report can be downloaded here.
Drax advances biomass strategy with Pinnacle acquisition
The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.
The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).
This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.
In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.
The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.