global investment and other trends in green energy


global investment green energy

Reports detail global investment and other trends in green energy

Renewables accounted for 60 per cent of newly installed capacity in Europe and more than 50 per cent in the USA in 2009. This year or next, experts predict, the world as a whole will add more capacity to the electricity supply from renewable than non-renewable sources.

The reports detail trends in the global green energy sector, including which sources attracted the greatest attention from investors and governments in different world regions.

They say investment in core clean energy (new renewables, biofuels and energy efficiency) decreased by 7% in 2009, to $162 billion. Many sub-sectors declined significantly in money invested, including large (utility) scale solar power and biofuels. However, there was record investment in wind power. If spending on solar water heaters, as well as total installation costs for rooftop solar PV, were included, total investment in 2009 actually increased in 2009, bucking the economic trend.

New private and public sector investments in core clean energy leapt 53 per cent in China in 2009. China added 37 gigawatts (GW) of renewable power capacity, more than any other country.

Globally, nearly 80 GW of renewable power capacity was added, including 31 GW of hydro and 48 GW of non-hydro capacity.

China surpassed the US in 2009 as the country with the greatest investment in clean energy. Chinas wind farm development was the strongest investment feature of the year by far, although there were other areas of strength worldwide in 2009, notably North Sea offshore wind investment and the financing of power storage and electric vehicle technology companies.

Wind power and solar PV additions reached a record high of 38 GW and 7 GW, respectively. Investment totals in utility-scale solar PV declined relative to 2008, partly a result of large drops in the costs of solar PV. However, this decline was offset by record investment in small-scale (rooftop) solar PV projects.

The reports also show that countries with policies encouraging renewable energy have roughly doubled from 55 in 2005 to more than 100 today – half of them in the developing world – and have played a critically important role in the sectors rapid growth.

The sister reports, UNEPs Global Trends in Sustainable Energy Investment 2010 and the REN21s Renewables 2010 Global Status Report, were released by UN Under-Secretary-General Achim Steiner, UNEPs Executive Director, and Mohamed El-Ashry, Chair of REN21. The UNEP report was prepared by London-based Bloomberg New Energy Finance. The REN21 report was produced by a team of authors in collaboration with a global network of research partners.

The UNEP report focuses on the global trends in sustainable energy investment, covering both the renewable energy and energy efficiency sectors. The REN21 report offers a broad look at the status of renewable energy worldwide today, covering power regeneration, heating and cooling and transport fuels, and paints the landscape of policies and targets introduced around the world to promote renewable energy.

Says Mr. Steiner: The sustainable energy investment story of 2009 was one of resilience, frustration and determination. Resilience to the financial downturn that was hitting all sectors of the global economy and frustration that, while the UN climate convention meeting in Copenhagen was not the big breakdown that might have occurred, neither was it the big breakthrough so many had hoped for. Yet there was determination on the part of many industry actors and governments, especially in rapidly developing economies, to transform the financial and economic crisis into an opportunity for greener growth.

There remains however a serious gap between the ambition and the science in terms of where the world needs to be in 2020 to avoid dangerous climate change. But what this five years of research underlines is that this gap is not unbridgeable. Indeed, renewable energy is consistently and persistently bucking the trends and can play its part in realizing a low carbon, resource efficient Green Economy if government policy sends ever harder market signals to investors, he added.

Says Mr El-Ashry: Favorable policies now in place in more than 100 countries have played a critical role in the strength of global renewable energy investments recently. For the upward trend of renewable energy growth to continue, policy efforts now need to be taken to the next level and encourage a massive scale up of renewable technologies.

Says Michael Liebreich, chief executive of Bloomberg New Energy Finance: The relatively resilient performance of the sector during the current economic downturn shows that clean energy was not a bubble created by the late stages of the credit boom, but is instead an investment theme that will remain important for the years ahead.

By the numbers:

In 2009 renewable sources represented:

25 per cent of global power (electricity) capacity (1,230 gigawatts (GW) out of 4,800 GW total all sources, including coal, gas, nuclear)

18 per cent of global power production

60 per cent of newly installed power capacity in Europe and more than 50 per cent in the US; the world as a whole should reach 50 per cent or more in newly-installed power capacity from renewables in 2010 or 2011.

Appendix

Major highlights, UNEP Sustainable Energy Finance Initiative and REN21 reports

For the first time, private sector green energy investments in Asia and Oceania, some $40.8 billion in 2009, exceeded that in the Americas, at $32.3 billion.

Private sector investment in Europe was down 10 percent at $43.7 billion.

Major economies in 2009 began to spend some of the estimated $188 billion in global green stimulus programs announced in September 2008. However, at the end of 2009, only 9 percent of the money had been spent, with larger proportions expected to flow in 2010 and 2011.

After a weak first quarter attributed to the banking crisis, sustainable energy investments rebounded in the final three quarters of last year. The new investment total of $162 billion in 2009 represented the second highest annual figure ever (after 2008) — nearly quadruple the sum invested in 2004.

New investment of $162 billion has added an estimated 50 gigawatts (GW) of renewable energy generation capacity worldwide (not including hydro-electric). This represents a sharp rise from the 40GW added in 2008. Fifty GW is roughly the output of 75 coal-fired power plants.

Looking forward

The green power sector survived the economic downturn better than many expected, with share prices rising almost 40% in 2009, reversing roughly one third of losses experienced in 2008.

Clean energy share prices under-performed wider stock markets by around 10 percent in the first four months of 2010. Although oil prices were buoyant, prices of electricity and natural gas stayed low, cramping returns for project developers.

Nevertheless, new clean energy investments in the first quarter of 2010 (often the most subdued quarter of the year) were up more than 50 percent on the same three months of 2009.

Sector Highlights

From 2005 to 2009 inclusive, the annual average rate of growth in wind power capacity was 27 percent; solar hot water 21 percent rate; ethanol production 20 percent and biodiesel production 51 percent. The use of biomass and geothermal for power and heat also grew strongly.

Wind

Wind was even more dominant as a destination for investment in 2009 than 2008.

In 2008, it accounted for $59 billion or 45 percent of all financial investment in sustainable energy; in 2009, it accounted for $67 billion and its share rose to 56 percent.

Wind power additions reached a record high of 38 GW, 13.8 GW of which was installed in China, 10 GW in the US, and 2.5 GW in Spain.

Wind power existed in just a handful of countries in the 1990s, but now exists in over 82 countries.

Solar

Total global investment in solar PV reached a record $40 billion in 2009.

Grid-connected solar power has grown by an average of 60 percent every year for the past decade, from 0.2 GW at the start of 2000 to 21 GW at the end of 2009.

 
 
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