With last year’s record-breaking investment of almost $300 billion in renewable energy, the world’s total investment since 2004 has now reached $2.3 trillion – that’s a lot of cash.
Although sluggish economic growth and subsidy cutbacks in Europe are putting a strain on investments in some countries, record-level investments by China and other developing nations ensure that on the whole, investment is going through the roof with solar and wind as the big winners.
According to a UN report, structural change is under way in how we power our cities, homes and businesses. Last year, electricity powered by coal and gas attracted less than half the record investment made in solar, wind and other renewables capacity.
‘Only’ $130 billion was invested in coal and gas power stations in 2015, according to the United Nations Environment Programme’s (UNEP) annual report released in March, compared to $266 billion in renewable energy investments. If you include R&D and early-stage technologies, the amount is even more impressive: $286 billion.
“We have entered a new era of clean energy growth that can fuel a future of opportunity and greater prosperity for every person on the planet,” UN general secretary Ban Ki-Moon says in a foreword to the report.
“Governments, businesses and investors around the world are realising that the progression to low-emission, climate-resilient growth is inevitable, beneficial and already under way,” he said.
— UN Environment (@UNEP) March 30, 2016
Global investment in renewable power capacity has hit a new record in 2015. It far outpaced that in fossil fuel generating capacity despite falling oil, gas and coal prices says Michael Liebreich, chairman of Bloomberg’s new energy arm, in a statement.
“It has broadened out to a wider and wider array of developing countries, helped by sharply reduced costs and by the benefits of local power production over reliance on imported commodities,” he said.
Led by China, the world’s 2015 investment in renewables was about 3 per cent higher than the previous record in 2011, the report says. The 134 gigawatts of renewable power added worldwide in 2015 compares to 106 gigawatts in 2014 and 87 gigawatts in 2013.
China Charges Ahead
In 2015, for the first time, investments in renewable energy in developing nations surpassed those in developed countries.
Much of the record-breaking investments took place in China, which invested $102.9 billion, or a third the world total. Other big-spenders from the developing world were India, South Africa, Mexico and Chile.
Even countries like Morocco, Turkey and Uruguay invested more than $1 billion. Overall, developing country investments last year were 17-times higher than in 2004.
Europe Still Beats United States
Investment in Europe however, plunged from $62 billion in 2014 to $48.8 billion in 2015 – the lowest figure in almost a decade. But despite the drop in investment, Europe still beat the United States which increased investment by close to 20 per cent to $44.1 billion. In Japan investment was much the same as the previous year at $36.2 billion.
Highlighting the continued investment in Europe, Eternal Sun – a Climate-KIC supported solar energy equipment start-up from the Netherlands – announced a take-over of its US competitor Spire Solar in January, following a venture capital injection in 2015.
— InnovationQuarter (@InnoQuarter) January 26, 2016
“Sustainable, renewable energy is growing, but not quickly enough to meet expected energy demand,” Ban Ki-Moon said, “For power sector development to be consistent with the goal of zero net greenhouse gas emissions in the second half of the century, it will be necessary to reduce or leave idle fossil-fuel power plant capacity (…).”
The UNEP report was produced in collaboration with the Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance and Bloomberg New Energy Finance.
Are you thinking about getting involved in the clean-tech sector? Climate-KIC runs programmes across Europe to support start-up companies.