The Middle East & North Africa (Mena) region is set to see 530GW of new power generating capacity coming online between 2017 and 2040, Bloomberg New Energy Finance (BNEF) has said in a new report. Around 358GW, or 63%, will be renewables and 130GW, or 23%, gas, BNEF said in its ‘New Energy Outlook 2017’. From 2020, BNEF expects solar photovoltaic (PV) to boom in the region, with an average 12GW added per year, as costs continue declining and net exporting countries gradually remove fuel subsidies, revealing the true cost of fossil-fuel electricity generation. According to the report, PV dominates capacity additions with 274GW commissioned by 2040, 90% of which is utility-scale. In the near term, this is driven by installations in net importing countries where PV is already cheaper than plants burning imported oil and gas.
Installed power generating capacity in Mena will move from 93% fossil fuels to 53% zero-carbon over the 2017-40 period, it said. “The region becomes less reliant on oil and more reliant on gas,” BNEF said. Gas will provide over half of generation by 2040; coal and gas capacity in Mena is to fall from 93% to 47% as renewables grow sixteen-fold by 2040. Two thirds of all new capacity additions to 2040 are solar and wind, driving $36bn of investment, BNEF said.
Although electricity demand in the Mena region will double between 2017 and 2040, BNEF noted the “electricity intensity of GDP” will fall 22% by 2040. Globally, BNEF said the power demand may grow by 58% between now and 2040, or 2% per year. “Growth in power demand increasingly decouples from GDP, however we expect the intensity of electricity consumption per unit of GDP to fall by 27% over 2016-40,” BNEF said.
It expects $10.2tn to be invested in new power generation capacity worldwide to 2040, of this, 72% will go to renewables, or $7.4tn, solar takes $2.8tn and wind $3.3tn. Investment in renewable energy is set to increase to around $400bn per year by 2040, a 2-3% average annual increase. Investment in wind grows faster than solar-wind increasing 3.4% and solar 2.3% per year on average, BNEF said.
The report also highlights the growth in the lithium – ion batteries segment for energy storage, and noted it will become a $20bn a year market by 2040, a tenfold increase from today. Small-scale batteries installed by households and businesses alongside PV systems accounts for 57% of installed storage capacity worldwide by 2040, BNEF said.