New reports confirm renewable energy market stalled last year as technology costs fell, but emerging economies promise to drive growth
The UN Environment Programme (UNEP) has today confirmed global investment in renewable energy slowed down last year, even as deployment in key technologies and markets continued to accelerate.
The agency has this afternoon published two major reports on progress in the renewables industry, which echo previous studies showing investment fell 12 per cent last year to $244bn, primarily as a result of the drastic fall in the cost of solar and wind power and policy uncertainty in several industrialised nations.
Despite the investment slowdown, the reports stressed that the general trend for the industry was encouraging, noting that $1.6tr has been invested in renewables since 2006, 2012 marked the third consecutive year investment comfortably topped $200m, and that the sector now employs 5.7 million people globally. The data also confirms once again that investment in new renewables capacity topped investment in new fossil fuel generation capacity.
The reports also demonstrated that the slowdown in investment had not been matched by a slowdown in deployment, due to the fact solar prices fell by 30 to 40 per cent, while wind energy costs also saw more modest falls. As a result solar installations hit a new record of 30.5GW, while wind energy capacity deployment rose from 42.1GW in 2011 to 48.4GW last year.
“The uptake of renewable energies continues world-wide as countries, companies and communities seize the linkages between low carbon Green Economies and a future of energy access and security, sustainable livelihoods and a stabilized climate,” said UNEP executive director Achim Steiner, in a statement.
“There has been a dramatic increase in number and size of projects. There have also been sharp falls in manufacturing costs and in the selling prices of wind turbines and photovoltaic panels, contributing to a shake-out in the industry in 2012. This is not only normal in a rapidly growing, high tech industry but is likely to lead to even more competition, with even bigger gains for consumers, the climate and wider sustainability opportunities.”
Last year also saw a sharp shift in the make-up of the global market, with investment in emerging economies nearly matching that found in industrialised nations for the first time. According to the Global Trends and Global Status reports, investment in renewables in the so-called Global South topped $112bn while investment in developed nations reached $132bn. The spread of investment is in stark contrast to five years ago when industrialised nations invested 2.5 times more in renewables, excluding large hydro, than developing countries.
The reports also noted that 138 countries now boast renewable energy targets or targets, two thirds of which are in developing countries.
Moreover, China further cemented its position as the world´s leading renewable energy market last year as investment rose 22 per cent to $67bn. The report comes in the same week as the International Energy Agency (IEA) reported that China saw one of the lowest increases in its greenhouse gas emissions in 20 years last year as a result of investment in energy efficiency and renewables.
However, while sharp increases in renewables investment were recorded in Africa, the Middle East and parts of South America, the UNEP reports also confirmed significant slowdowns in the US and Germany where investment fell 34 per cent and 35 per cent, respectively.
Investment in Japan bucked the trend, climbing 73 per cent to $16bn on the introduction of new renewable energy subsidies, but the bulk of industrialised countries saw investment stall as a result of policy uncertainty and falling technology costs.
Michael Liebreich, chief executive of Bloomberg New Energy Finance, which contributed to the reports, said the research demonstrated the continued strength of the global renewables industry, but he warned a step change in investment would still be required if the world is to meet its climate change targets.
“It is encouraging that renewable energy investment has exceeded $200bn for the third successive year, that emerging economies are playing a larger and larger part, and that the cost-competitiveness of solar and wind power is improving all the time,” he said. “What remains daunting is that the world has hardly scratched the surface – CO2 emissions are still on a firm upward trend and there was still nearly $150bn of net investment in new fossil-fuel generating assets in 2012.”
Source: Business Green