Friday, July 8, 2011

Global Investments in Green Energy Up Nearly a Third/UNEP

Renewable energy tops nuclear power in the US
By John Timmer | Published about 4 hours ago

Plunging prices and booming investments are beginning to reshape the
energy market, according to a couple of reports that were released
this week. A report produced on behalf of Bloomberg says that
investments in renewable energy have gone up by roughly a third over
the last year, to $211 billion. Led by China's renewable push, the
world is now on a trajectory that will see its investments in
renewable electricity surpass those in fossil fuels within a year or
two. As a result of these investments, the US is now producing more
renewable energy than nuclear power.
First, renewable investments. Bloomberg's New Energy Finance group has
collaborated with the UN Environment Programme and the Frankfurt
School of Finance and Management to produce a global overview of
funding for renewable power. This includes the obvious�financing for
the construction of utility-scale projects and home installations�and
some non-obvious funding, like merger and acquisition activity.

Any way you look at things, the numbers make it clear just how
significant renewables have become. Excluding hydropower, renewables
made up about 35 percent of the power capacity added worldwide last
year, and produced over five percent of the total power. Investments
directed toward this new capacity (excluding things like mergers) hit
$187 billion, and are closing in fast on the spending on fossil fuel
power plants, cutting the gap in spending to $31 billion, down from
$74 billion. At that pace, we'll be investing more in renewables
either this year or next.

Renewables made up 35 percent of the power capacity added worldwide
last year.

Part of the reason is cost. Although wind turbines are very mature
technology now, their cost per MW still fell by 18 percent over the
last two years; photovoltaics have dropped a staggering 60 percent in
that time. "Further improvements in the levelised cost of energy for
solar, wind and other technologies lie ahead, posing a bigger and
bigger threat to the dominance of fossil-fuel generation sources in
the next few years," according to the report's authors.

That will be a major transition, but another one took place already
this past year: more financing went to utility-scale projects in the
developing economies than in the industrialized ones. That change is
driven by China, where investments were up by about 30 percent,
reaching $49 billion.

The US, despite seeing a jump of 60 percent, still trailed far behind,
with only about $25 billion in these investments. That would be enough
to put the US in second place, at least until small-scale distributed
solar is considered. Rooftop and similar capacity boomed in Germany
after several years of government-driven investment in larger
projects. Small-scale solar now constitutes the majority of Germany's
investment, and is sufficient to push it into second place globally. A
similar trend was apparent in other European countries, including
Italy, France, and the Czech Republic. These installations are also
enough to push solar energy much closer to wind power when it comes to
total investments.

Renewables are also becoming a major factor outside of the BrIC
countries (Brazil, India, China). Latin American investments tripled
to clear $6 billion, and other Asian nations saw 30 percent growth to
$4 billion. But the big story is Africa, led by Egypt and Kenya, where
investments were up nearly five-fold, reaching $3.6 billion. "Solar
telecommunications towers," the report argues, "are becoming the
technology of choice, not a poor substitute for diesel or other fossil-
fuel power options."

These trends have driven a major milestone in the US. The US Energy
Information Agency performs a monthly review of the national energy
economy, and its most recent report (for June) held a bit of a
surprise: renewable energy has passed nuclear for the first three
months this year. Electricity generated by nuclear plants has held
steady at about 8,400 quadrillion BTUs for the last several years,
while renewables have experienced strong growth, reaching just over
8,000 Quads last year.

This figure includes biomass, which has seen significant growth over
the last decade, as has wind. So far, solar is barely registering, but
several major utility-scale projects are in the works, both
photovoltaic and concentrated solar, so that may change before too long.

Developed economies still have a substantial lead when it comes to R&D
investments, which are helping to drive the costs of solar (and other
technologies) downwards. Government policies in these nations have
also fostered increased production, which is pushing the costs down
even further. But the rapid growth of renewables outside these
economies show that globalization has ensured that the benefits are
spreading rapidly to other countries, where renewables are enabling
off-the-grid operation of key infrastructure.

Further reading
� The UNEP press release (

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