A new report from ‘Carbon Tracker’ has suggested that the falling cost of solar photovoltaic (Solar PV) technology and electric vehicles could halt the worldwide growth in demand for coal and oil by 2020.
Solar PV and electric vehicles are described as ‘game changers’ with the potential to create stranded assets in the conventional fossil fuel energy sector.
Green impact explained
The report considers the cost reductions projected for solar PV and electric vehicle technologies. Under this scenario, solar PV (including associated storage costs) could supply 23% of global electricity needs by 2040 and 29% by 2050.
Electric vehicles could account for 35% of the road transport market by 2035 and over 66% by 2050.
Growing green potential
The key message is that the large conventional fossil fuel based energy companies may be seriously underestimating the potential for a low carbon energy transition to affect their businesses.
Luke Sussams, a senior researcher at Carbon Tracker, said: “Electric vehicles and solar power are game changers that the fossil fuel industry consistently underestimates.
“Further innovation could make our scenarios look conservative in five years’ time, in which case the demand misread by companies will have been amplified even more.”
James Leaton, head of research at Carbon Tracker, added: “There are a number of low-carbon technologies about to achieve critical mass decades before some companies expect.”
Polluting fuels to lose 10% share
The report by the Grantham Institute at Imperial College London and the Carbon Tracker Initiative found that polluting fuels could lose 10% of market share to solar power and clean cars within a decade.
A 10% loss of market share was enough to cause the collapse of the coal mining industry in the US, while Europe’s five major utilities lost £85bn between 2008 and 2013 because they did not prepare for an 8% increase in renewables, the report said.