Thompson Reuters predicts that solar PV, hydro power, and nuclear fusion will be the three dominant sources of energy over the next three decades, in its report Powering the Planet 2045. The report projects fossil-fuel-based energy sources will be all but gone by the end of this century. Clean coal and natural gas will remain important in the near-term, but over the next three decades solar PV, hydro power, and nuclear fusion will the largest global energy sources, citing innovation in these industries as one of the major driving forces.

McKinsey Energy Insight’s latest analysis reveals that despite an expected increase in global population of around 36%, alongside a doubling in global GDP by 2050, a number of structural shifts in the level and composition of economic growth as well as energy sector dynamics will depress global energy demand growth. This reduction in energy demand growth has significant implications for investment decisions. Major investments in the energy system may no longer be needed and some could be at risk of being stranded. McKinsey projects that crude oil demand will flatten, primarily due to a decline in demand from light vehicles – driven by improved efficiency of internal combustion engines and increased adoption of electric vehicles, autonomous vehicles and ride sharing. Fossil fuels will continue to dominate the energy mix to 2050, but their contribution will decline from 82% today to 74% in 2050. Growth in electricity demand will outstrip growth in demand for other sources of energy by more than two to one, primarily as a consequence of building and industry electrification in China and India. Almost 80% of capacity to meet this overall increase will be in the form of solar and wind power.

The Oxford Business Group reported South Africa’s renewable energy sector is the African continent’s largest producer of renewable energy. Renewable energy generation is expected to reach 7 gigawatts (GW) the middle of this year. Based on existing projects and new projects coming on-line, South Africa appears to be on course to achieve its renewable target of 17.8 GW by 2030 or 21% of total the country’s energy capacity.

Solar is India’s fastest growing new energy source, according to Mercom Capital Group. The south Asian country has installed 2.2 gigawatts (GW) of new solar capacity this year to date, putting it on course to reach 5 GW by the end of the year. Projections for next year are even more bullish, with Mercom expecting India to install more than 9 GW of new PV capacity in 2017. Renewables in general account for 14% of India’s installed power capacity mix. Wind remains the nation’s dominant renewable source, but solar – at 17% of the country’s installed renewable capacity – is rapidly closing the gap.

Mercatus Energy Investment Management report finds that emerging solar markets offer higher returns on investment than developed markets. According to the report’s findings, the average rate of return per solar project in the Middle East is 10.4%, compared to returns of just 4% in Europe. African solar projects offer returns of 10.3% on average, while many parts of the Asian market will see returns of 8.4%. Contrast this with the North American market’s 6.4% average rate of return, and the trend is clear – where there is greater risk, there is greater return. The Mercatus report further finds that the average size of a solar installation in Africa is 45 MW, while for the Middle East and Asia it is 34 MW and 22 MW respectively. In Europe, that figure falls to just 3 MW as the market there continues its transition from ground-mount projects to rooftop installation for the residential and commercial sectors.

A prolonged slump in natural gas prices is delaying the economic transformation of the East African nations of Tanzania and Mozambique.  Years of government inaction means it will be anywhere from 5 years to a decade before trillions of cubic feet of newly found natural gas will be pumped and sold to export markets. The current price for natural gas is $2.16, up from a March low of $1.64 but far short of more than $4 in 2014. See The Wall Street Journal, Gas Slump Defers Eastern African Nations’ Transformation

Saudi Arabia has decided to dramatically cut back on its renewable-power targets and use more natural gas. The desert kingdom now plans to have renewable energy (primarily solar) make up 10% of the energy mix, a reduction from an earlier target of 50%. Energy Minister Khalid Al-Falih commented: “The previous target of 50 percent from renewable sources was an initial target and it was built on high oil prices, near $150 a barrel.” The country will double natural gas production and expand the distribution network to the western part of the nation. Using more gas domestically to generate electricity will free up crude oil for export.

 

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