Bloomberg New Energy Finance (BNEF) has issued a new report which predicts that solar and natural gas will make the largest gains in electricity generation in North and South America until 2030.
BNEF’s 2030 Market Outlook says a rising share of solar PV is being driven by falling prices, and predicts that the levelized cost of electricity (LCOE) from utility-scale PV will fall from US$0.104-0.165 per kilowatt-hour (kWh) in 2013 to US$0.063-0.115/kWh by 2030.
This will allow utility-scale PV to be competitive with fossil fuel generation across much of the Americas by 2020. However, the company predicts that rooftop PV will represent a larger market share, at US$231 billion in investments over the 15-year period.
In the United States alone, BNEF expects a 27-fold growth of rooftop PV, with total capacity rising from 6 GW in 2013 to 156 GW in 2030. The company also expects Latin America to add 102 GW of solar capacity. Most of this will be small-scale PV, but some utility-scale plants are also expected.
BNEF explains that rooftop PV operates under a different market paradigm. Unlike utility-scale projects, consumer uptake of small-scale PV is driven both by its economics and its existing market penetration, states the report. In other words, as more small-scale systems are installed, there is a positive feedback cycle that can drive exponential growth in uptake.
The report expects that natural gas-fired generation will represent ¼ of all new investment during the period, as the single largest source of new power. BNEF credits the boom in unconventional gas, however this forecast is based on expectations of ongoing availability of shale gas and prices remaining below US$5 per MMBTU for the next decade.
BNEF’s strong predictions for gas also may not take into account future political decisions based on recent scientific findings of very high levels of fugitive methane from fracking. Methane is a much more potent greenhouse gas than CO2.
The company expects that this combination of natural gas and renewables will edge out coal-fired generation in the region. Overall, BNEF expects wind and solar PV to increase to 18% of the region’s generation by 2030.
Under the prediction that renewable energy will represent 2/3 of all new generation put online over the next 15 years, BNEF expects renewables to meet 28% of the electricity needs in the Americas by 2030.