BNEF Webinar Explains “What’s in store for clean energy in 2016” (and beyond)

This morning, Bloomberg New Energy Finance (BNEF) held a highly-informative webinar entitled, “What’s in store for clean energy in 2016?” It’s about an hour long, and we strongly recommend that you check it out if you have the time. If not, here are some highlights.

  • There was record-breaking clean energy investment worldwide in 2015 ($329 billion), of which $162 billion went into solar and $110 billion into wind power.  That investment resulted in 56 gigawatts (GW) of new solar capacity and 64 GW of new wind capacity in 2015.
  • Making this growth even more impressive is that it took place against the backdrop of a crash in oil prices and a decline in other fossil fuel prices. In large part, that’s because the levelized cost of energy (LCOE) for solar and wind keeps falling (BNEF notes that solar in particular is plummeting in cost); in part it’s because most renewable energy is in the power sector, which is only indirectly linked to oil markets.
  • The top 15 countries in terms of clean energy investment in 2015 were China ($110.5 billion), the U.S. ($56 billion), Japan ($43.6 billion), the UK ($23 billion), India ($10.9 billion), Germany ($10.6 billion), Brazil ($7.5 billion), South Africa ($4.5 billion), Canada ($4.0 billion), Mexico ($4.0 billion), Chile ($3.4 billion), France ($2.9 billion), Australia ($2.9 billion), South Korea ($2.5 billion) and Morocco ($2.0 billion). BNEF notes that more developing countries have been entering the top 15, and that trend should continue in 2016.
  • Clean energy investment has been increasingly about wind and solar power, plus smart energy technologies like electric vehicles, demand response, energy storage and smart grids.
  • Chinese wind power growth is going from “ludicrous mode” in 2015 (+29 GW) to “really really fast mode” (+21-22 GW per year) moving ahead.
  • The top onshore wind turbine manufacturers include Goldwind (China) at #1, followed by Vestas, GE, Siemens, Gamesa, Enercon, Guodian (China), Ming Yang (China), Envision (China) and CSIC (China). The Chinese companies’ capacity overwhelmingly is going to the Chinese market and not for export, while non-Chinese wind turbine manufacturers are selling mostly to the Americas and Europe.
  • Solar power costs keep falling and capacity additions keep rising. For instance, world solar PV additions in 2009 were just 7.8 GW, compared to 56 GW in 2015 and an expected 80 GW in 2018.
  • The 5-year extension of U.S. solar and wind tax credits was huge and somewhat unexpected news. The impact will be more solar and wind capacity, as well as a steadier flow of installations than would have been the case. Also, the U.S. policy battle will now shift to a state-by-state fight over net metering.
  • The supply side should not be a barrier to continued solar PV growth, as there’s plenty of polysilicone, while ingot and wafer capacity is easy to expand.
  • Solar power trade disputes are becoming less of a factor due to Chinese companies setting up manufacturing facilities outside of China.
  • The economics of solar plus storage should probably start to make sense starting around the mid-2020s in most parts of the world.
  • Utility-scale solar prices should fall from $3.24/watt in 2010 to $1.21/watt in 2016 and $0.97/watt in 2020.
  • YieldCos — specialist funds whose purpose is to own renewable energy projects and pay a large percentage of cash flows from these projects to investors — are growing and should continue to do so.
  • Electrical vehicles (EVs) are growing rapidly, despite low oil prices, and should continue to do so. In part, that’s because many people buy EVs for reasons other than economics.
  • In addition to competitive and falling costs, renewable energy’s other advantages include the fact that solar and wind are faster to build than fossil fuel power plants; that solar and wind use little if any water (while fossil fuel power plants use a great deal of water); that financing is easier for solar and wind than for fossil-fuel-fired power plants; and that there’s no drag on balance of trade because there are no fuel import costs, as is the case with fossil fuels. Plus, of course, clean energy does not emit any carbon dioxide or other pollutants