Green energy investments swelled by almost a third in 2010, backed primarily by the European market that reported a rise in the installation of solar panels on rooftops as well as the development of wind farms in China, says the United Nations Environment Programme (UNEP) in its latest annual report on renewable energy, called ‘Global Trends in Renewable Energy Investment 2011’.
A breakdown shows that the renewables sector was injected with a whopping USD 211 billion (around EUR 149 billion) in 2010, against USD 160 billion invested in 2009. The figures show a 540 % jump since 2004.
Created by Professor Ulf Moslener at the Frankfurt School of Finance & Management in Germany, in cooperation with the London-based Bloomberg New Energy Finance, the report says that developing nations surpassed developed economies with respect to ‘financial new investment’, what experts define as spending in utility-scale renewable energy projects and provision of equity capital for renewable energy companies.
In total, developing nations received USD 72 billion compared to the USD 70 billion that was invested in developed ones. This figure has changed significantly since 2004, when financial new investments in developing nations were about 25 % of those in developed economies.
The South and Central American markets recorded a 39 % rise to USD 13.1 billion, while the Middle East and Africa posted a 104 % jump to USD 5 billion. Asian developing nations, excluding China and India, were up 31 % to USD 4 billion. India alone posted an increase of 25 % to USD 3.8 billion. China ranks first in the list after providing 28 % more in financial new investments in renewables, totalling USD 48.9 billion.
The report also reveals that government research and development intensified in 2010, with investment rising by more than 120 % to over USD 5 billion.
Commenting on the findings, UN Under-Secretary-General and UNEP Executive Director Achim Steiner says: ‘The continuing growth in this core segment of the Green Economy is not happening by chance. The combination of government target-setting, policy support and stimulus funds is underpinning the renewable industry’s rise and bringing the much needed transformation of our global energy system within reach.’
He goes on to say that the UN Conference on Climate Change, to be held in Durban, South Africa, from 28 November to 9 December 2011, followed by the Rio+20 summit in Brazil in 2012, provides the opportunities the world needs to intensify and scale up ‘this positive transition to a low carbon, resource efficient Green Economy in the context of sustainable development and poverty eradication.’
For his part, Frankfurt School of Finance and Management President Udo Steffens says: ‘The finance industry is still recovering from the recent financial crisis. The fact that the industry remains heavily committed to renewables demonstrates its strong belief in the prospects of sustainable energy investments.’
Professor Steffens points out that the increasing number of investments in the developing world is boosting renewable energy technology innovations and opening up new markets ‘as first mover investors are facilitating a range of new business models and support entrepreneurship in the developing world.’
Despite the positive developments, some areas failed to post gains last year. New financial investment in large-scale renewable energy dropped by 22 % to USD 35.2 billion in Europe in 2010.
It should be noted, however, that this was more than compensated for by a rise in small-scale project installation. Feed-in tariffs (policy mechanisms designed to increase investment in renewable energy technologies) and a decline in the cost of photovoltaic (PV) modules in Europe led to increased small-scale project activity.
German investments jumped by 132 % to USD 34 billion. Investments in Italy increased by 59 % to USD 5.5 billion, while French ones rose by 150 % to USD 2.7 billion and the Czech-based grew by 163 % to USD 2.3 billion.
Wind power also dominated in terms of financial new investment in large-scale renewables in 2010, up 30 % to USD 94.7 billion on the previous year. Solar power picked up the pace thanks to the stronger investments in small-scale projects, posting a 52 % year-on-year jump to USD 86 billion in 2010. Biomass and waste-to-energy ranks third in front of biofuels, totalling USD 5.5 billion last year.
The report adds that a new UNEP Collaborating Centre for Climate & Sustainable Energy Finance will open at the Frankfurt School of Finance and Management.
