Solar PV technology is likely to account for 35% of the global power supply by 2045, further expanding to 38% in 2050 with a 3rd of this coming from utility scale solar farms, supported by onsite storage, according to DNV's Energy Transition Outlook (ETO) 2022.
The 6th edition of this DNV's annual report sees 83% of the world's energy being generated by renewables in 2050. Apart from solar PV, wind energy is anticipated to account for 31% of this share.
Annual installations of solar PV will rise from 138 GW in 2020 to 682 GW in 2050. Report writers forecast total installed capacity of solar PV by 2050 to reach 14.5 TW, comprising 9.5 TW of solar PV alone and 5 TW of solar+storage projects.
"In 2050, more than half of all installed capacity globally will be solar. While solar will have a share of 54% of installed capacity in mid-century, it will account for 30% of global on-grid electricity generation," stated DNV. "This is due to the lower capacity factors of solar power stations compared with other VRES such as wind and hydropower. Nevertheless, 23 PWh per year of solar electricity will be generated globally in 2050."
Currently, solar PV's global weighted average levelized cost of energy (LCOE) is around $50 per MWh and that for solar+storage is $120 per MWh. For solar PV, the report writers expect reduction of unit investments costs to bring down the LCOE to around $30 per MWh by 2050.
The global average of unit investments costs for solar PV that at present stand at close to $900 per kW, are to drop down to $650 per kW in 2050.
"The panel cost-learning rate for solar PV will remain high throughout our forecast period. It is currently 26%, and while that rate will decline to 17% in 2050, solar PV will be in unassailable position as the cheapest source of new electricity globally, except in unfavorable areas such as in high northern latitudes," reads the report.
Renewables expenditure is expected to double over the next 10 years to over $1,300 billion annually, and grid expenditure to exceed $1,000 billion per year. DNV says that building out renewable technologies does not come at a green premium, but rather as a 'green prize'.
The report emphatically argues that high energy prices and a greater focus on energy security with the Russian invasion of Ukraine will not slow down the long-term energy transition of the world to clean energy in the short term.
Yet, its progress will differ from geography to geography. Europe, for instance, will continue to accelerate its renewables build-out to achieve energy security but for the rest of the world inflation, in terms of energy and food prices, may shift the priority focus from renewables.
Even with this positive momentum, DNV says the world is headed towards a 2.2°C warming by 2100 and that the window to act is closing fast to take action to close the gap from the most likely 2.2°C trajectory to the agreed 1.5°C future. Policy implementation on 'war-footing' is needed to secure net zero by 2050, reflecting the sentiments shared in ETO 2021 (see DNV: World Needs Vastly More Green Energy).
Green hydrogen from dedicated renewables and from the grid will become dominant over time even as blue hydrogen and blue ammonia will still be around.
Group President and CEO of DNV, Remi Eriksen explained that the report's Pathway to Net Zero in 2050 sees a 13% share of fossil fuels in the energy mix still because 'we think it infeasible for the world to completely discontinue fossil-fuel use'. "That overshoot in fossil use will require huge expenditure on carbon capture and removal efforts in the 2040s – running to USD 1 trillion per year," explained Eriksen.
Complete report can be downloaded for free on DNV's website.
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