Wind and solar to reach half installed capacity by 2040

In its 'New Energy Outlook 2017' report, BNEF said wind and solar projects will account for nearly half of the total installed capacity and produce 34% of global power generation by 2040.

This compares with just 12% of total installed capacity and 5% of generation in 2016.

"Installed solar capacity increases 14-fold and wind capacity fourfold by 2040. We anticipate renewable energy reaching 74% penetration in Germany, 38% in the U.S., 55% in China and 49% in India by 2040 as batteries and new sources of flexibility bolster the reach of renewables," BNEF said in its report.

Costs of renewables are also set to fall, with a predicted 74% drop in offshore wind prices, BNEF said, compared with 47% for onshore and 66% for solar.

The analysis firm said "development experience, competition and reduced risk, and economies of scale" would help to drastically cut offshore wind costs by 2040.