This year’s outlook is the first to highlight the huge impact that falling battery costs will have on the electricity mix over the coming decades, says BNEF, which predicts that lithium-ion battery prices, already down by nearly 80% per megawatt-hour since 2010, will continue to tumble as electric vehicle manufacturing builds up through the 2020s.
“We see $548 billion being invested in battery capacity by 2050 – two-thirds of that at the grid level and one-third installed behind-the-meter by households and businesses,” predicts Seb Henbest, head of Europe, the Middle East and Africa for BNEF and lead author of NEO 2018. “The arrival of cheap battery storage will mean that it becomes increasingly possible to finesse the delivery of electricity from wind and solar so that these technologies can help meet demand even when the wind isn’t blowing and the sun isn’t shining. The result will be renewables eating up more and more of the existing market for coal, gas and nuclear.”
NEO 2018 sees $11.5 trillion being invested globally in new power generation capacity between 2018 and 2050. Of that, BNEF says $8.4 trillion will go to wind and solar and a further $1.5 trillion to other zero-carbon technologies, such as hydro and nuclear.