The world is going clean: Renewable energy will make up more than 70 percent of investment in new power generation by 2025, a Citibank report said Thursday.
Demand for power is growing around the globe and most of it will be renewable. Of the nearly $10 trillion dollars that will be poured into the power sector in the next decade, more than $2 trillion will be invested in wind, followed by $1.5 trillion in hydropower and $1.3 trillion in solar power, as nations around the world begin to make the shift away from fossil fuel generation.
While natural gas has cut into coal’s dominance for power generation in the United States, the report notes that in the longer run, the lower price of solar energy will make it increasingly attractive, especially during peak demand periods, when wholesale power in Texas can cost as much as $4,500 per megawatt-hour.
“Solar steals the most valuable part of electricity generation at the peak of the day when prices are highest,” the report said. German natural gas power plants have already said they are reluctant to build new generation because of the impact of solar power on their profits, according to the report.
More than $37 trillion will be invested in the global energy infrastructure in the next two decades, with nearly 50 percent of it devoted to electricity generation, Citibank estimated in the report. Oil production will account for about 37 percent of total investment, followed by natural gas, coal and biofuels, at 23 percent, 3 percent and one percent, respectively.
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