LONDON (Reuters) - Renewable energy will not be cost competitive with fossil fuels until 2050, Glencore said on Tuesday, much later than energy organisations forecast and supporting the mining and trading giant’s case for continued investment in coal.
Glencore has said coal is still an investment opportunity, forecasting global demand will grow by 7 percent by 2030, driven by emerging economies and industrial demand, and halting spending would halve seaborne supplies in 15 years’ time.
Glencore Chairman Tony Hayward told a conference in London on Tuesday that, like oil companies, the group would get a return on its investment.
“The investment we put in the ground today will come out in 10 years. The same applies to the world’s oil and gas companies - their investments will come out in 20 years,” Hayward said.
Renewables won’t achieve cost parity with fossil fuels until 2051, he predicted.
Energy company officials attending the same conference, the Institute of Directors’ (IoD) annual convention, believe parity will come much earlier.
Wilfrid Petrie, UK and Ireland chief executive at French gas and power group Engie, said he thought it would be as early as in five years’ time, whereas David Brooks, managing director of supply at UK renewable energy supplier Good Energy, said it could happen by 2020, adding that wind was already at cost parity with fossil fuels.
Research by the International Energy Agency and other organisations has shown that renewable energy sources such as wind and solar can now produce electricity in some parts of the world at a price close to that generated by fossil fuels such as coal and gas.
Hayward, who is also chairman of oil explorer Genel Energy and a former boss of BP, said great technological strides would be needed for renewables to become overall as cost competitive as fossil fuels before mid-century.
“In 15 years’ time, if someone really does achieve a technological breakthrough akin to a mobile phone, an iPhone, that will change the energy picture going forward,” he said.
Additional reporting by Helen Reid; Editing by Susan Fenton
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