For The First Time, Developing Countries Spending The Most On
Renewables
BY Michael J. Coren
Spending on renewable energy is at an all-time high around the world,
and in some of the poorest places on Earth, it may mean leapfrogging
over dirty power sources in favor of clean ones.
That's it folks. 2010 may have been the year when developing countries
pulled away from the developed world's fossil-fuel fouled past, toward
a future powered by clean renewables. And despite the fact that much
of that investment was state-subsidized, we are still at a turning
point when renewables such as solar, geothermal and wind (those old
whipping posts for critics arguing they won't compete with subsidized
oil and coal) began to stand on their own two feet, especially in the
parts of the world where they are often the only source of power
available.
According to a new report by UN Environment Program, collaborating
with the Frankfurt School of Finance & Management and Bloomberg New
Energy Finance, investors poured a record $211 billion into renewable
energy in 2010, accounting for one-third of all new generating
capacity. That's a 540% rise since 2004, and during a global financial
crisis.
A big chunk of this investment was for massive wind farms in China
(the country's clean-tech sector swallowed up $48 billion last year)
and small-scale solar rooftops in Germany. Both are recipients of
largess from governments through feed-in tariffs and subsidies. Yet
the far more interesting story is the explosion of alternative energy
in places that can't afford such schemes, where the natural resource
base (wind, sun and geothermal) is vast and the cost of generating
clean energy is at or near competitive prices: Egypt, Morocco, Kenya,
Argentina, Mexico and others. Even Pakistan-- Pakistan!--took in $1.5
billion investment to boost its wind capacity.
"In many parts of the world, we could expect something like a leapfrog
[of energy technologies]," writes Ulf Moslener of the Frankfurt School
of Finance & Management in the report. "The strong message is
growth... Fossil fuel investment is still dominant around the world
but the gap is shrinking fast. If you look at the deals being made,
much of the [conventional] investment is to replace old fossil plants,
but renewable finance is for new capacity."
Assuming cold-hard numbers are an indication--presumably they are--we
are fast approaching a world where new energy resource bases will rely
substantially on strong winds, blazing sun and hot springs. Investment
in Kenya's wind, geothermal, small-scale hydro and biofuel projects
rocketed from virtually zero to $1.3 billion between 2009 and 2010.
Although only 10% of the country's population has access to
electricity, Kenya is building a 280 megawatt geothermal plant as a
down payment on the 3,000 MW it expects to need by 2018, roughly
triple today's demand.
In the Middle East and North Africa, Egypt and Morocco are teaming up
with the World Bank to create a series of massive solar installations
that will reshape the power dynamics of the region. Already, more than
600 megawatts (MW) of hybrid gas-solar plants have been installed.
Morocco announced its design to install 2,000 MW of solar capacity on
36 square miles before the decade is out (potentially for export to
Europe), while Egypt is planing to build its own 100 MW solar plant.
Renewables may still prove more expensive for some time to come. But
economics change fast. If today's trends are point to the future (the
price of PV solar per megawatt has dropped 60% since mid-2008), then
there's no turning back.
[Image: Flickr user whiteafrican]
Follow @fastcompany.
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