Interview: Behind the New Energy Outlook 2015


pv magazine: In the latest Bloomberg New Energy Outlook report, solar has risen to the top as the leading source of new energy investment through to 2040. Why is that the case?

Jenny Chase: Well we’re pretty excited about solar’s prospects. The figure that didn’t get into the headline that I think is the headline is that BNEF modeling see photovoltaics generating about 14% of global electricity supply by 2040. That is in a scenario that is basically not assuming any incentives for solar beyond 2020.

Some of us within the solar industry might actually find 14% a rather limited prediction, in that those of us bullish on solar believe it can make a bigger contribution through to 2040?

My first thought about 14% is that it is not particularly ambitious. Solar will make up a higher share of generation in some regions, so it will make up more like 20% in India and Europe. But when we did this modeling we were not just modeling solar, we did all renewable energy sources, looking at the pipeline of coal, gas and nuclear plants that will come on and offline over the next 20 years. What really stands out is that the energy system has a lot of inertia: you can’t turn off a coal or a gas plant overnight. Once the infrastructure is built, you’re stuck with it for the life of the plant.

So one of the lessons that I have learned from doing this modeling exercise was that even cheap solar takes a while to start to taking up a big part of the world’s energy mix – which is a bit of shame. That is one of the reasons why solar is expected, in the NEO, to take off more rapidly in the developing world, is that is where new capacity is needed. In developing countries, it is much easier to add a lot of solar with a little bit of coal to back it up than anything else.

The other big headline is that coal is going to be around for some time as a prominent electricity generation source. Why is that?

Unfortunately yes, and the reason is that many countries like India have domestic coal reserves and a desperate and voracious need for power. Solar and wind will help meet some of that demand, but they will also want flexible capacity and they will turn to those domestic coal reserves.

What role has carbon pricing and U.S. EPA regulations regarding emissions played in the modeling?

They were both included in the modeling. We didn’t include direct solar subsidies, although we also didn’t include direct solar anti subsidies. We assumed that there would not be net metering beyond 2020, but we also assumed that there won’t be any taxes on solar either.

Did duties on solar products factor in?

We didn’t take them into account because my opinion on duties is that they actually make zero impact. If solar is not manufactured in one place, it will simply be manufactured in another. Right now we see a major shift to Southeast Asia, to dodge the existing trade barriers, and now India as well.

Why is that you conclude in the NEO that solar will be more competitive than wind or other renewable sources of electricity?

Solar simply gets a lot cheaper. A lot of the electricity demand growth in the world is also in really sunny places. Wind does very well in the NEO modeling, which is not really a surprise because everyone knows that wind is an attractive source of energy. In the NEO modeling onshore wind will add 1.5 TW through to 2040 with offshore adding about 184 GW. It is also a bit more complicated to deploy wind and there will come a point that solar is simply cheaper than onshore wind.

What is the key message for the solar industry from BNEF’s NEO?

If you are building large scale solar, go to the developing world, if you are building small scale, look to the roofs.

And both sectors have a healthy outlook?

Absolutely, yes.

What changes would have to take place for carbon intensive coal generation to be significantly reduced?

The developed world has to share its expertise and even some of its capacity with places that have cheap, domestic coal. Developed nations will have to help those nations go to gas rather than coal. This may involve the building of massive transmission lines, so there is a reduced need for the use of domestic resources.

I actually think it would be a good thing to see less of an energy independence agenda in some countries. Energy independence is not necessarily going to help with renewable deployment in the long term.

The drive to energy independence can either be pro renewables on the small scale, in that renewables tend to be local, but once you get to countries the size of India looking to deploy a high proportion of renewables, then interconnection is going to be really important.

The 2015 NEO is actually a fairly ‘business as usual’ scenario. It is absolutely possible for the world to beat these predictions.

Popular content

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact:


Related content

Elsewhere on pv magazine...

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.