More than half of electricity generation capacity in Europe will be from renewable energy sources by 2030, and the Asia-Pacific region will spend around $2.5 trillion over the next 16 years on green power technologies like wind, solar and hydro-electric.

These are some of the findings from Bloomberg New Energy Finance’s 2030 Market Outlook, released last week.

The report says the next decade and a half will see renewable energy raise its share of European electricity generation capacity from 40% in 2012, to 60% in 2030. The share of fossil-fuel sources such as coal and gas will fall from 48% to 27%, according to the 2030 Market Outlook, which is based on modelling of electricity market supply and demand, technology cost evolution and policy development in individual countries and regions.

Speaking on the economic drivers behind the numbers, Seb Henbest, head of Europe, Middle East and Africa for Bloomberg New Energy Finance, told Bloomberg TV that generating power from onshore wind farms will be the cheapest way to produce electricity throughout much of the world – particularly Europe – by 2020.

The uptake of solar on rooftops is also likely to increase, he said, as photovoltaic panels become viewed like any other must-have consumer technology such as mobile phones and laptops.

Meanwhile, the report forecasts that the Asia-Pacific region will account for more than half of the 5TW of net new power capacity that will be added worldwide in the next decade and a half. The biggest growth in this region will be in renewables, with some $2.5 trillion invested and 1.7TW of capacity added. This is 1.5 times more than what’s currently installed in the power system in the US, Bloomberg New Energy Finance’s Justin Wu told Bloomberg TV.

“The Asia-Pacific region is the largest region for new energy build in the world,” he said. “It’s larger than the Americas and Europe combined from now until 2030.”
In other news, there were two big announcements relating to offshore wind farms last week. First, Statoil and Statkraft announced their companies will go forward with a GBP 1.5bn ($2.6bn) wind farm off the UK coast. The 402MW Dudgeon project will have 67 wind turbines each with 6MW of capacity, according to a statement on 1 July from Statoil, the project operator. The companies will first build an onshore substation and lay cables on land before beginning offshore construction in 2016.

The Dudgeon project is the first in offshore wind to reach a final investment decision under the new UK Contract for Difference mechanism. More details on this policy incentive can be found in BNEF’s Analyst Reaction Beginning of EMR end game: UK set for CFD competition. Dudgeon is also the first project this consortium will build and introduces the next generation of large-scale UK projects in deeper waters, and further offshore, using 6MW turbines.

Across the pond, Cape Wind Associates last week received a conditional $150m loan guarantee from the US Department of Energy to build what may be the nation’s first offshore wind farm, off the Massachusetts coast.

Cape Wind has received commitments for about half of the estimated $2.6bn it needs, and will qualify for the Energy Department guarantee when it arranges for the balance, Peter Davidson, director of the department’s loans programme, told Bloomberg News in an interview.

The USD 150m conditional loan guarantee from the Department of Energy is a substantial share of the USD 500m Cape Wind has been seeking. It should help lower the project’s overall cost of debt, enabling greater returns to the equity investors.

Yet, the Cape Wind project, which has been in the works for more than a decade and has faced fierce opposition, is still far from reaching the finishing line. Equity and tax equity remain the most challenging part of the financing for Cape Wind to secure. Bloomberg New Energy Finance sees a loan guarantee of any amount helping, but it is not a golden ticket to full financing.