Renewables will beat coal on a new-build basis in Southeast Asia by 2050, projects BloombergNEF in their report New Energy Outlook 2019. These new sources of energy are expected to grow the power system by six times, with solar PV making up most of the capacity additions. By 2050, renewables will make up 58 per cent of power generation in the region, shifting the energy mix as fossil fuels make up 84 per cent of the share today.
However, with newly built coal plants, coal will remain a low-cost energy source and part of Southeast Asia’s energy mix for decades. Renewables alone will not be able to meet the surging electricity demand in rapid-growth countries like Indonesia and Vietnam.
Elsewhere in the world, solar and wind have become the cheapest energy source as technology costs drop by as much as 85 per cent compared to 2010. By 2030, they will be more cost-effective than coal and gas. As a result, solar and wind will generate 22 per cent and 26 per cent of the world’s electricity by 2050, with fossil fuels no longer dominating the power sector.
Other notable findings from the report include:
1. Renewables will make up most new investments. In order to meet a 12 TW expansion of energy generating capacity by 2050, some $13.3 trillion in new investments are needed. China and India take the lead in investments. Renewables will make up 77 per cent of new investment in the region.
2. Gas-fired power maintains its growth, but at a slow rate. With renewables becoming more cost-effective, gas-fired power is used only for supplying system back-up and ensuring flexibility. Growth is expected to be 0.6 per cent per year till 2050.
3. Demand for certain metals and materials will rise. As solar and wind deployment ramp up, there will be a need for concrete, aluminium, steel, copper, lithium and cobalt. However, material use will become more efficient over time, with turbines needing 42 per cent less concrete and 17 per cent less steel by 2030 compared to today.