As dependence on conventional fossil fuels abates
considerably all over the world in the coming years, electricity generated by
wind, sun and batteries will define the way power is generated. The share of coal
will shrink to just 11per cent of global electricity generation by mid-century,
from 38 per cent now. As for vehicles powered by lithium-ion batteries, the
scenario looks promising as, by 2040, 55 per cent of all new car sales and 33
per cent of the global fleet will be electric.
These observations form part of a study published by
Bloomberg New Energy Finance (BNEF), an industry research firm focused on
helping energy professionals generate opportunities. The New Energy Outlook (NEO)
2018 BNEF 150 pages report highlights the huge impact the falling battery costs
will have on electricity mix over the coming decades. “India is a priority country for Bloomberg
globally, one whose power and transport sectors are expected to fundamentally
change by mid-century with its economic transformation,” said Jon Moore, CEO,
Bloomberg NEF. He was addressing media in the Capital.
"We will continue to track key changes such as the
electrification of transport and the transition to a lower carbon power sector.
In power generation alone, we are expecting to see a $1.6 trillion investment
opportunity for investors by 2050," Moore added.
But the report highlights that electric vehicles will represent
just 10 per cent of India’s total passenger vehicle fleet in 2040. While countries
like China, US and those in Europe will be seeing rapid increase in electric
vehicles, the growth in India will be slow. “India’s car market is dominated by
affordable (below US$ 10,000) small vehicles, and the Indian government has not
shown any appetite to provide the subsidies that would be required to make
electric passenger vehicles (4-wheelers) affordable for private citizens in the
short term,” the report said
Bloomberg experts maintained that they were skeptical of
claims made by many that India will be the next big EV market set to follow
China’s lead. Low average vehicle prices will inhibit EV uptake for the next
ten years before adoption rises in the 2030s. Progress on e-bikes, rickshaws
and e-buses looks promising over the next ten years. “We expect EVs to
represent just 10% of India’s total passenger vehicle fleet in 2040,” the
report pointed out.
"India is often touted as the next big electric
vehicle market set to follow China’s lead," said Ashish Sethia, Head of
Research, Asia Pacific for Bloomberg NEF. "However, low average vehicle
prices will inhibit EV uptake for the next 10 years. After 2030, we expect EV
sales in India to accelerate with increased affordability, as well as the
government’s efforts to ensure universal access to electricity which lower challenges
with charging infrastructure," he said.
"As we chart the future of energy with the Bloomberg
New Energy Outlook 2018, we project that cheap renewable energy and batteries
will reshape the entire electricity system," said Shantanu Jaiswal, Head
of India Research, Bloomberg NEF. "Looking ahead, we see new power
generation assets growing, the cost of wind energy to come down significantly,
and renewables to supply 62% electricity in China and 75% in India by 2050.
Asia Pacific is recording almost as much investment in power plants as the rest
of the world combined, with China seeing 49% and India 29% of the total
regional investment," he added.
The pace of electrification in transport will vary by
country, particularly over the next 12 years as some markets jump ahead of
others. BNEF forecasts that in 2030, EVs will make up 44% of European
light-duty vehicle sales, 41% of those in China, 34% in the U.S., and 17% in
Japan. However, a shortage of charging infrastructure and a lack of affordable
models will hold back the market in India, so that EVs will make up just 7% of
new car sales in 2030 there.
BNEF’s projections imply big opportunities for
lithium-ion battery manufacturers. China is already dominant in this market,
with a 59% global share of production capacity in 2018, and this is forecast to
rise to 73% by 2021.
The number of ICE vehicles sold per year (gasoline or
diesel) is expected to start declining in the mid-2020s, as EVs bite hard into
their market. In 2040, some 60 million EVs are projected to be sold, equivalent
to 55% of the global light-duty vehicle market. ‘Shared mobility’ cars will be
a small but growing element .
The advance of e-buses will be even more rapid than for
electric cars, according to BNEF’s analysis. It shows electric buses in almost
all charging configurations having a lower total cost of ownership than
conventional municipal buses by 2019. There are already over 300,000 e-buses on
the road in China, and electric models are on track to dominate the global
market by the late 2020s.
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. BNEF 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.
NEO 2018 sees $11.5 trillion being invested globally in
new power generation capacity between 2018 and 2050, with $8.4 trillion of that
going to wind and solar and a further $1.5 trillion to other zero-carbon
technologies such as hydro and nuclear.
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