A new United Nations report shows last year worldwide investments in renewable energy soared to record levels, seeing an increase of 32% since 2009. Though last year’s growth was concentrated in Asia and Europe, countries around the world are turning away from fossil fuels and embracing renewable energy sources, with wind and solar installations leading the way. Numbers for the developing world are particularly striking: in 2010, for the first time ever, developing countries invested more in clean energy than industrialized nations.
The report, titled Global Trends in Renewable Energy Investment 2011, was prepared for the UN Environment Programme by Bloomberg New Energy Finance. The findings are encouraging, and suggest the renewable energy sector is still doing well even as economies remain incompletely recovered from the 2008 financial meltdown.
“The finance industry is still recovering from the recent financial crisis,” said Udo Steffens, President of the Frankfurt School of Finance and Management in Germany. “The fact that the industry remains heavily committed to renewables demonstrates its strong belief in the prospects of sustainable energy investments.”
The overall percentage of energy generated from renewable sources also went up in 2010, even as total energy demand in developing countries continues to grow. 8.1% of global energy generation came from renewables in 2010, up from 7.1% in 2009. Power sources included in this figure include wind, solar, biomass, and geothermal energy, but not large hydropower projects that are generally considered non-renewable.
More than 20% of 2010’s renewable energy investments were in China, which put $US 48.9 billion into growing clean energy projects. Meanwhile in Europe, solar power saw a surge thanks to feed-in tariff policies that allow homeowners who install solar fixtures to sell excess electricity that they generate back to the grid. India, Africa, Latin America, and other parts of the developing world also saw dramatic gains in renewable energy investment.
Countries that saw the most growth tend to be those with strong policies to encourage the renewable energy industries or provide incentives for shifting to low-carbon power. Stimulus money from job creation programs passed after the 2008 financial meltdown helped grow clean industries in many nations, while tax incentives and feed-in tariffs also contributed. In most countries renewable energy needs such incentives to compete with fossil fuels, which have been heavily subsidized for decades.
Yet even in nations that lack strong incentives, renewable energy is gaining a foothold. The United States lacks any comprehensive strategy to supplant fossil fuels with renewables, but early this year renewable sources produced 11.73% of the nation’s energy. For the first time ever, renewable power now generates more energy in the US than nuclear plants, though it still lags far behind fossil fuels.
New regulations on pollution from coal plants, which the US Environmental Protection Agency is rolling out in response to a Clean Air Act mandate, could make dirty fuels like coal an even less attractive investment, and prompt more companies to turn to renewable energy. Meanwhile in Australia—a country that, like the US, has been slow to embrace renewable power—a proposed tax on carbon emissions could have a similar effect.
In total, the world invested US$ 211 billion in renewable energy in the year 2010, money that came mainly from corporations, government entities, and venture capitalists. At US$ 96 billion, wind energy received the most money, with solar coming in not far behind. While investments in most other renewables went up, money spent on biomass projects declined—a fact likely to please environmentalists worried about deforestation and other side effects of growing plant material for fuel.
The race is now on to see how much renewable energy will grow in 2011, and which nations will reap most of the benefits. The results will determine how quickly the world’s countries can make the shift to a cleaner, greener energy future.