Global Clean Energy Investment Boom Media Brief

Apr 03, 2012 - 11:00am

A growth industry

Despite uncertain economic conditions, clean energy investment around the world is growing. A record US$260 billion was invested in clean energy last year*. 
   
  • Of this total over half - US$137 billion - was invested in solar energy, followed by wind power at US$75 billion.
  • For the first time since 2008, the United States was the global leader in terms of total investment in clean energy - US$56 billion.
  • China maintained its strong position, with investment rising to US$47 billion. India's investment grew the fastest with a 2011 increase of 52 per cent and a total of US$10 billion in total. Brazil also saw impressive investment growth rates of over 10 per cent
  • Other global investment leaders include Germany, Italy, the UK, Japan, Spain and Canada.
  • Driven largely by installations of solar on homes, Australia invested $4.7 billion in 2011, up 11 percent on the previous year*.

A global energy player

  • Globally, renewable energy accounted for around 46 per cent of newly installed electricity generating capacity between 2008 and 2009* and roughly half of new power generating capacity added in 20104. Renewable energy delivered close to 20 per cent of global electricity production over this period.
  • Data provided to The Climate Institute by leading financial analyst Bloomberg New Energy Finance shows clearly that investment in clean energy generation now competes with global investment in fossil fuels (Figure 1.). In 2004, only 22 per cent of investment of new power generation capacity was based on clean energy. In 2011, it was 42 per cent.

Investment is driving down costs

Global investments in clean energy are driving substantial technology costs reductions*.
 
  • The price of solar PV panels has fallen by 75 per cent over the last five years.
  • Since 1985, the cost of wind energy has fallen by over 50 per cent for on shore generation and over 75 per cent for offshore generation.

Policy intervention is increasing

Global investments in clean energy are being driven by countries implementing a range of policies. The International Energy Agency (IEA) notes that the main drivers for deploying renewable energy are energy security; economic, innovation, rural and industrial development; and the reduction in carbon and other pollution*.

  • The number of countries with renewable energy targets or policies has doubled in the last five years, from 55 in 2005 to 118 in 2011*.
  • Subsides to renewable energy amounted to around US$66 billion in 2010, according to the IEA.8 This compares to US$409 billion for fossil fuels.
  • In 2008 alone, renewable energy saved 1.7 billion tonnes of carbon pollution being emitted to the atmosphere - more than that year’s aggregated power sector emissions in OECD Europe*.
  • Between 2.3–3 million people are now employed the renewable energy industry globally, according to Deutsche Bank Group. By 2030, up to 30 million people could be employed globally in solar, wind, bioenergy and other renewable energy industries*.
It is broadly recognised internationally that in addition to carbon pricing a range of measures are required to reduce emissions cost-effectively. For example, the IEA researchers conclude that the optimal policy portfolio for minimising the long-term cost of reducing emissions through renewable energy includes carbon pricing; research and development; and policies to drive their deployment and cost reduction through market experience*. (Outside the renewable energy other policies are also required to unlock energy efficiency and drive pollution reductions outside the stationary energy sector, for example, in agriculture.)

The IEA also highlight  that given the major role renewable energy will play in meeting long-term emission targets, renewable energy policy needs to be seen in terms of its ‘longer?term role and strategic importance in addressing climate change’ and carbon price design should include policies, such carbon price floors, to provide long-term investment certainty.

Figure 1.0
Clean energy and fossil fuel power generation investment: 2004-2011


Source: Bloomberg New Energy Finance. Investment for new build – fossil fuel calculated from US Energy Information Administration and International Energy Agency data, clean energy taken from Bloomberg New Energy Finance totals. This work was undertaken in partnership with Pacific Hydro and Bloomberg New Energy Finance as part of the Global Climate Leadership Review 2012.

 

* See attachment for all references.

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