Investments in renewable energy hit new records in 2015, with China and the Global South leading the charge, according to a new report by the United Nations Environment Programme (UNEP).
Global investment in green energy grew by 5 percent last year to $285.9 billion, surpassing the previous record of $278.5 billion set in 2011, UNEP showed in its annual assessment. Another milestone was set as 2015 became the first year in which renewables, excluding large hydro-electric projects, made up a majority (53.6 percent) of power generation installations.
“These are transitions and trends that are remarkable and would have been unthinkable just 10 years ago,” UNEP Executive Director Achim Steiner said in a video presentation of the report, which was produced in co-operation with the Frankfurt School and Bloomberg New Energy Finance.
The authors of the study said the results were all the more remarkable during a year that saw the price of fossil fuels – oil, coal and gas – plummet dramatically.
Even as investment in renewable energies made huge strides, the report’s authors warned that much remained to be done in order to make good on promises by world leaders at the historic COP21 climate summit in Paris last November. Clean technologies still only deliver 10.3 percent of the world’s electricity.
The transition to renewable energy seems nevertheless to be under way, with a wide array of capital sources now behind the low-carbon push. “It’s a real mix, with utility-scale projects (like wind farms and solar parks) playing an important role,” Eric Usher, the acting head of the UNEP Finance Initiative, told FRANCE 24 by phone.
“It’s normal for the incumbent utilities to adapt to new technologies”, Usher said, adding that nascent capital markets and development banks helped complete the picture.
Developing countries first
Another significant green energy trend of 2015 was the rise of developing countries, with China and the Global South setting the pace in terms of spending.
The developing world invested $156 billion in clean energy last year, 19 percent more than in 2014. China singlehandedly accounted for a colossal $102.9 billion, or 36 percent of the world total, according to UNEP.
Other developing countries lifted their investments considerably in 2015, including South Africa (329 percent), Mexico (105 percent), and Chile (151 percent).
By comparison, developed countries invested $130 billion though December, with spending up 19 percent in the United States, but down by 21 percent in Europe to $48.8 billion – the lowest in nine years.
“The drop in investment is part of a larger malaise in European economies, but also due to policy slippage from some countries,” said Usher, noting that Spain, Italy and Greece, but also the United Kingdom, had “slimmed down” or “scaled back” on green energy commitments.
“Europe was the first to move on renewable energy investments. It’s now in a ‘wait and see’ mode,” he said.
Renewable winners and losers
It was not a strong year for public market investment in renewable energy, which totaled $12.8 billion in 2015, down 21 percent on the previous year’s figure.
Researchers said that the amount was nevertheless consistent with the average for the past seven years.
Figures for the year also appeared to confirm the dominance of solar and wind energy in comparison to other clean-energy sectors. Solar grew by 12 percent compared to 2014, and wind by 4 percent. In stark contrast, new investment in biofuels dropped by 35 percent and in marine (wave and tidal) plunged by 42 percent.
“To some extent there is a ‘zooming in’ on technology winners, and tidal has tapered off,” Usher admitted, but rejected the idea that smaller renewables were doomed. “It’s telling to see where venture capital is going, and while it’s true those investments are principally in solar, investors are still betting on other renewables.”
Usher said that the relative weakness of biomass, biofuels, marine and other renewables could be attributed to investors’ aversion to uncertainty. “Once you build a solar plant, it’s easy to repeat the installation elsewhere. The resource doesn’t change, the sun is very predictable,” he explained. “Wind is more complicated, and most other renewables are very specific to the local context.”
Find the full UNEP report here.
Date created : 2016-03-24