BNEF: Offshore Wind Levelized Costs to Fall 71% by 2040

Offshore wind levelized costs will slide 71% by 2040, according to the latest long-term forecast from Bloomberg New Energy Finance (BNEF).

The reduction in costs will be helped by development experience, competition and reduced risk, and economies of scale resulting from larger projects and bigger turbines, BNEF said in the New Energy Outlook 2017.

Overall, renewable energy sources such as solar and wind are set to take almost three quarters of the USD 10.2 trillion the world will invest in new power generating technology over the years to 2040, BNEF said.

Wind will draw USD 3.3 trillion and will see a fourfold increase in capacity by 2040. As a result, wind and solar will make up 48% of the world’s installed capacity and 34% of electricity generation by 2040, compared with just 12% and 5% now.

China and India will account for 28% and 11% of all investment in power generation by 2040, BNEF said. Asia Pacific will see almost as much investment in generation as the rest of the world combined. Of this, just under a third goes to wind and solar each, 18% to nuclear and 10% to coal and gas.

The report shows earlier progress than its equivalent a year ago towards decarbonization of the world’s power system – with global emissions projected to peak in 2026 and to be 4% lower in 2040 than they were in 2016.
“This year’s report suggests that the greening of the world’s electricity system is unstoppable, thanks to rapidly falling costs for solar and wind power, and a growing role for batteries, including those in electric vehicles, in balancing supply and demand,” said Seb Henbest, lead author of NEO 2017 at BNEF.
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