The Fifth Estate has kicked into gear for another year, and according to Bloomberg New Energy Finance it promises to be a big one for the clean energy and transport sectors.
The research organisation has released its annual predictions, with good news ahead for clean energy, batteries and electric vehicles, thanks to continuing cost decreases. Though while coal is expected to continue marching towards its inevitable death, there is significant growth expected in gas, and continued unease around global politics that could threaten positive movements in the clean energy space.
1. US$330 billion clean energy investment
2017 saw US$333.5 billion (AU$417.2b) in clean energy investment, up three per cent on the previous year and nudging the record set in 2015. In 2018 BNEF is predicting a similar figure, though because clean energy capital costs are falling, it means the same amount of money will buy more capacity.
2. Solar to exceed 100GW
In 2017 there was 98 gigawatts of solar installed globally. In 2018 it is expected to crack the 100GW barrier, with 107GW of installed capacity predicted. China dominates with 47-65GW expected, while Latin America, south-east Asia, the Middle East and Africa are all expected to show growth.
3. More wind power too
Onshore and offshore wind hit 56GW in 2017, 2GW higher than 2016, but much lower than boom year 2015’s 63GW. BNEF is expecting the recovery to continue with 59GW to be installed in 2018 before records are broken in 2019 with 67GW, thanks to a US Production Tax Credit nearing expiry. Key growth areas are expected to be China and Latin America.
4. Battery costs head down
The cost of lithium-ion batteries is expected to continue to fall, though not at such a rapid rate as previous years. While cobalt and lithium carbonate prices rose 129 per cent and 29 per cent respectively in 2017, BNEF still expects average pack prices to decline by 10-15 per cent, due to economies of scale larger average pack sizes and energy density improvements of 5-7 per cent a year.
Global storage deployments in 2018 is expected to exceed 2GW/4GWh, and South Korea will again be the single largest market. BNEF however warned that policies rather than economics alone would determine the rate of uptake.
5. Electric vehicle sales hit 1.5 million
China will lead the growth of EVs, becoming responsible for more than half of the 1.5 million increase expected for 2018. This represents a 40 per cent increase for China, which is a slight slowdown in the growth rate as the country tapers off direct subsidy support. The next largest market will be Europe.
6. Autonomous cars will exceed 10 million kilometres of travel
By the end of 2017, autonomous vehicles had clocked up more than 5.2 million miles (8.4 million kilometres), mostly in trials. By the end of 2018 BNEF is predicting this to head up to 8.3 million miles (13.4 million kilometres), and it might not only be in test vehicles, with the leading contender for more autonomous miles being Tesla vehicles.
“Tesla has not enabled the ‘Full Self-Driving’ package it has already been selling. And the performance of the ‘Enhanced Autopilot’ feature currently enabled in its cars has deteriorated since its partnership with Mobileye ended in September 2016,” BNEF head of intelligent mobility Ali Izadi-Najafabadi said.
“If Tesla overcomes these challenges in 2018, the company would have a commanding lead in autonomous miles driven by cars owned by private consumers.”
7. More US gas
US domestic production and demand will rise in 2018, while prices should stay at a similar level to 2017. In 2017 production hit 2.2 billion cubic metres a day, with BNEF expecting this to rise to 2.3 billion cubic metres a day.
8. Global LNG market hits US$120 billion
In 2017 demand for liquefied natural gas jumped 10 per cent to hit 285 million metric tonnes per annum. BNEF is forecasting another 7-10 per cent rise in 2018. Growing volumes coupled with higher prices will take LNG trade close to US$120 billion (AU$150b) – a 15 per cent increase from last year.
9. Coal continues to flatline in US, despite resuscitation efforts
BNEF expects the Trump administration to pull every policy lever it can to try to stop the decline of the US coal industry, but to no avail. The country is already slated to close 13GW of coal capacity this year, the second biggest year for coal plant closures in history.
10. Last year for coal in India, China looks to smaller solar
2018 will be the last year fossil fuels outpace renewables in India, BNEF predicts, with greater policy certainty and a shrinking fossil fuel pipeline in 2019 meaning more renewables than fossil fuel projects will be built.
“This will be a major milestone for a country that most see as a key battleground for the fight to stabilise global greenhouse emissions growth,” BNEF head of Asia-Pacific Justin Wu said.
In China, another solar turning point is predicted, with the country to build more “distribution-grid-connected” solar projects than larger “transmission-grid-connected” projects, while also doubling the number of behind-the-meter solar projects built to 14GW.