In its 2016 New Energy Outlook, Bloomberg predicts the cost of solar and wind power will be so low in the coming decade that they will be the dominant technologies for making electricity. In fact, Bloomberg says generating plants powered by fossil fuels will become expensive dinosaurs, kept in reserve only as backups to renewable resources.

It’s simple economics, Bloomberg says. Utility companies will adopt the least expensive form of electrical energy they can find. Not only is constructing new facilities for renewables now competitive with building new fossil fuel generating plants, once they are completed, there is no ongoing cost for fuel. Maintenance is also considerably reduced compared to coal and gas-fired facilities.

Here is the summary of Bloomberg’s report:

Cheaper coal and cheaper gas will not derail the transformation and decarbonisation of the world’s power systems. By 2040, zero-emission energy sources will make up 60% of installed capacity. Wind and solar will account for 64% of the 8.6TW [1 Terawatt = 1,000 Gigawatts] of new power generating capacity added worldwide over the next 25 years, and for almost 60% of the $11.4 trillion invested.

The New Energy Report Executive Summary can be downloaded directly from Bloomberg. All they ask is a name and email address. The summary is free.

Bloomberg’s conclusions agree with those from the International Energy Agency last November. The IEA said, “Driven by continued policy support, renewables account for half of additional global generation, overtaking coal around 2030 to become the largest power source.”

The replacement of fossil fuels as our primary source of energy with renewable electricity renewable sources such as wind and solar bodes well for the environment. Electric cars are thought of as the magic bullet for curing the world of its fossil fuel habit, but today they often have a tail of carbon dioxide emissions associated with them. That’s because the majority of electricity globally comes from burning coal or natural gas.

Over the next 25 years, Bloomberg predicts electric cars will represent 8% of the market for electrical energy — 2,700 terawatts worth. The cleaner the grid, the cleaner electric vehicles will be and the more benefits to the environment they will provide.

Bloomberg sees substantially lower prices for grid storage batteries driving the shift to renewables. Couple that with lower prices for wind and solar energy, and the economics will be inescapable — the shift to renewables is the only course of action that will make sense for utility companies around the world in the decades to come.

Source: Think Progress