A sharp increase in global investment in renewable energy after two years of decline, with developing countries increasing their commitments, masks uncertainty in Europe
The past year has seen a resurgence in investment for renewable energy technologies despite the drop in oil prices, according to a report prepared by two financial organisations which study the sector. The report, from the Frankfurt School – United Nations Environment Programme collaborating centre for Climate and Sustainable Energy Finance, and Bloomberg New Energy Finance, states that global investment in renewable energy investment climbed by 17 per cent in 2014 to $270bn after two consecutive years of declines.
The report notes that sharp declines in the cost of renewable technologies, most markedly in solar but also in wind, meant that every dollar invested bought more generating capacity. The capacity added in 2014 amounts to 103GW, compared with 86GW in 2013, 89GW in 2012 and 81GW in 2011.
The capacity installed included wind, solar, waste-to-power, geothermal, small hydro and marine. If this capacity had been installed as conventional fossil fuel-fired generation, global carbon emissions would have been 1.3gigatonnes of CO2 higher, the report says.
The largest investor in renewables was China, followed by the US and Japan. Brazil, India and South Africa were all in the top 10, showing a rapid expansion of renewables in developing countries.
One concern highlighted by the report is a decrease in investor confidence in some regions, notably Europe. Although Europe was a pioneer in renewables, it is now restructuring its early incentive regimes, making some regions, such a southern Europe, very unattractive to investors, it notes. It also states that goverments have struggled to produce policy to modernise their electricity systems to cope with the knock-on effects of increasing renewables.
”Once again in 2014, renewables made up nearly half of the net power capacity added worldwide, said Achim Steiner, UNEP executive director. ”These climate-friendly energy technologies are now an indispensible component of the global energy mix and their importance will only increase.”