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Falling price of solar obscures rise in renewables generation share

Renewable energy’s share of world electricity generation continued to climb in 2013 despite a 14 per cent drop in investments to $214.4bn, claims a new report.

According to Global Trends in Renewable Energy Investment 2014 – produced by the Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance, the United Nations Environment Programme (UNEP) and Bloomberg New Energy Finance — the investment drop of $35bn was partly down to the falling cost of solar photovoltaic systems. The other main cause was policy uncertainty in many countries, an issue that also depressed investment in fossil fuel generation in 2013.

Globally, renewables excluding large hydro accounted for 43.6 per cent of newly installed generating capacity in 2013.

‘A long-term shift in investment over the next few decades towards a cleaner energy portfolio is needed to avoid dangerous climate change, with the energy sector accounting for around two thirds of total greenhouse gas emissions,’ said Achim Steiner, UN under-secretary-general and executive director of UNEP. ‘The fact that renewable energy is gaining a bigger share of overall generation globally is encouraging. To support this further, we must re-evaluate investment priorities, shift incentives, build capacity and improve governance structures.’

‘While some may point to the fact that overall investment in renewables fell in 2013, the drop masks the many positive signals of a dynamic market that is fast evolving and maturing,’ Steiner said in a statement. ‘This should give governments the confidence to forge a new robust climate agreement to cut emissions at the 2015 climate change conference in Paris.’

The report points to the end of a four-and-a-half year 78 per cent decline in clean energy stocks, which were lowest in July 2012 but gained 54 per cent in 2013, an improvement that took place as many companies in the solar and wind manufacturing chains moved back towards profitability.  

Large hydro-electric projects were another important area of investment with at least 20GW of capacity estimated to have come on stream in 2013, equivalent to approximately $35bn of investment.

Although investment in renewable energy capacity, including all hydro, in 2013 was once below gross investment in fossil-fuel power, at $227bn compared to $270bn, it was roughly double the net figure for investment in fossil-fuel power excluding replacement plant.

The year marked a deepening involvement of long-term investors such as pension funds, insurance companies, wealth managers and private individuals in the equity and debt of wind and solar projects. Part of their new engagement was through clean energy bond issuance, which set a new record of $3.2bn raised in 2013, as well as through new types of financing vehicles including North American ‘yield companies’ and real estate investment trusts. Public market equity raising by renewable energy companies rose 201 per cent to $11bn.


Regional highlights:

  • Last year was the first in which China invested more in renewable energy than Europe. China’s total was down by six per cent at $56bn, while Europe’s dropped 44 per cent to $48bn. The US saw a fall of 10 per cent to $36bn. India moved 15 per cent down to $6bn and Brazil 54 per cent down to $3bn, the lowest since 2005.
  • The Americas, excluding the US and Brazil, increased investment in renewables by 26 per cent (to $12bn) in 2013. Japan’s appetite for solar helped to drive an 80 per cent increase in renewable energy investment to $29bn in 2013.
  • Installed solar rose 26 per cent — from 31GW in 2012 to 39GW in 2013 even as investment in solar capacity decreased 23 per cent from $136bn to $104bn. 

Readers' comments (4)

  • Does the 43.6% figure represent what can be achieved on average, or does it assume the sun is directly overhead and the wind speed is optimal for 24 hours every day of the year? There’s a very big difference.

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  • I was going to make a similar comment, but its not the fault of this article. It's just the way things are generally presented. Installed capacity for many renewables is a new useless number. Even if you could remove variability, a low cap factor means that expected output is way lower than installed capacity. An expected output number, based on capacity and expected cap factor, would be much more useful a metric.

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  • According to some calculations I did a little while ago, the average capacity factor of all the wind and solar farms in the world is around 22%. In general, their output during system peak demand periods is even less.

    The industry exists because of the huge subsidies paid by all electricity consumers and taxpayers. Research has shown that it is a singularly ineffective and expensive method of reducing carbon dioxide emissions. Nuclear power and conversions from coal to gas are much more effective and much cheaper.

    The fact that the world has not warmed for the last 17 years even though carbon dioxide levels have risen steadily proves that man-made carbon dioxide does not cause dangerous global warming.

    Which ever way you look at it, wind and solar power are a massive boondoggle – some people would describe them as fraud.

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  • Whenever clerks (jumped-up and other -are there any other?) get involved in number-crunching matters of which they have no in depth knowledge...fraudulent activity is going to be the result. Moving the cost/reward numbers around the books of UK plc may keep them busy, but what does it achieve. Yes, lots of manufacturing and installation staff spin their wheels: Would they do so, so readily if they realised that all they are actually doing is increase the public debt 'load' on their children and grandchildren. I used to work for a firm, to which the music hall joke about statistics: "Lies, damn lies and statistics" required a simple change: for the word statistics substitute.. " the X Company accounts."

    Such misconduct appears to have taken on a national status.

    But sadly, for the vast body of the population, what matters is next week's finances, not next century's: and for the word-and-figure weasels -politicians- what matters is maintaining the conn for long enough to get a voter's vote every five years?
    Mike B

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