Solar power will become the largest source of power generation globally by 2035, producing almost 40 per cent of all electricity, according to renewable energy company Statkraft.
The prediction was the conclusion of the company's fourth annual assessment of global energy trends, released yesterday. It brings forward the solar sector's forecast dominance by five years compared with last year's analysis, which stated that solar power would generate almost 30 per cent of electricity by 2040.
Solar PV is the fastest growing energy source in the world, with production increasing by 25 per cent last year, Statkraft said. A sharp reduction in the production costs of solar PV panels, a relatively short development time for projects, and increasing demand for renewable energy means that the growth of solar PV will dominate the energy sector towards 2050, it predicts.
Energy from solar PV will grow by 12.5 per cent a year, while that from wind will see an annual boost of 8.5 per cent, Statkraft's analysis claims. These predictions are in line with those of the International Energy Agency, which sees energy generated by solar PV growing by between ten to 12 per cent a year, while the wind energy sector's contribution will rise between 6.6 and 8.9 per cent per year.
By 2050, Statkraft believes that renewable technologies will generate more than 80 per cent of the world's power needs. Lifetime costs for solar PV and onshore wind power will fall by around 50 per cent and 40 per cent respectively by 2050, it said, gradually becoming cheaper than new coal and gas power projects in a growing number of locations, it said.
The company believes that electricity demand will more than double globally by 2050, growing by an average of 0.3 per cent a year as energy efficiency fails to fully offset the growth in population and economies.
Coal and oil demand will decline significantly, and will be phased out almost entirely from the power sector by 2050. Power from gas will also gradually decline, but this energy source will be the main emitter by the middle of the century, Statkraft believes.
Henrik Sætness, Statkraft's head of corporate strategy and analysis, said that the price of renewable technologies is decreasing faster than most people have anticipated. "In most countries it is already profitable to install renewable capacity where new power is required," he said. "In areas with abundant sun and wind, building new renewable capacity will soon become more profitable than existing coal or gas power."
The company says it plans to invest heavily in the UK to help the country decarbonise, citing the government's net zero target and increasingly positive political and public sentiment towards onshore wind and solar power projects.
Statkraft's other major prediction is that long-distance travel will increasingly switch to electricity and hydrogen for fuel, aided by the enormous drop in the cost of renewable energy. Almost all new private vehicles, and more than half of all new heavy vehicle electric and hydrogen trucks, will be able to compete on price with diesel trucks by 2025, it says. Furthermore, almost all new private vehicles and more than half of all new heavy vehicles will run on electricity or hydrogen by 2050.
The company's analysis has for the first time considered what is required for energy-related emissions to fall sufficiently to hold temperature rises within 1.5C of pre-industrial levels. It concluded that this was challenging yet possible to achieve using existing technology, but the speed of the transition must accelerate, with several technological solutions being developed simultaneously.
Statkraft's analysts believe that the most cost-effective way transition to meet the 1.5C target is for the power sector to lead the way with a 46 per cent emissions reduction, followed by cuts from industry of 23 per cent, while those from buildings should fall by 18 per cent, and transport by 13 per cent.