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July 09, 2011

UN reports Global Investments in Green Energy Up Nearly a Third to US$211 billion

Wind farms in China and small-scale solar panels on rooftops in Europe were largely responsible for last year's 32% rise in green energy investments worldwide according to the latest annual report on renewable energy investment trends issued by the UN Environment Programme (UNEP).

Last year, investors pumped a record US$211 billion into renewables - about one-third more than the US$160 billion invested in 2009, and a 540% rise since 2004. Positive trends in government research and development in renewables spotlighted-up over 120 per cent to well over US$5 billion.

The trends indicate that Green investments over the next 40 years could get close to the $76 trillion in global investment called for in another UN study.

The other report - The World Economic and Social Survey 2011: The Great Green Technological Transformation (251 pages). The survey says $1.9 trillion per year will be needed over the next 40 years for incremental investments in green technologies to avoid "planetary catastrophe".



For the first time, developing economies overtook developed ones in terms of "financial new investment"-spending on utility-scale renewable energy projects and provision of equity capital for renewable energy companies.

On this measure, US$72 billion was invested in developing countries vs. US$70 billion in developed economies, which contrasts with 2004, when financial new investments in developing countries were about one quarter of those in developed countries.

The report, Global Trends in Renewable Energy Investment 2011, has been prepared for UNEP by London-based Bloomberg New Energy Finance.

It was launched today by UN Under-Secretary-General and UNEP Executive Director Achim Steiner and Udo Steffens, President and CEO of the Frankfurt School of Finance & Management as it was also announced that a new UNEP Collaborating Centre for Climate & Sustainable Energy Finance is being inaugurated at the Frankfurt School.

China, with US$48.9 billion in financial new investment in renewables (up 28%), was the world leader in 2010.

Investments in Germany in "small distributed capacity" rose 132% to US$34 billion, in Italy they rose 59% to US$5.5 billion, France up 150% to US$2.7 billion, and the Czech Republic up 163% to US$2.3 billion.

The price of PV modules per megawatt has fallen 60% since mid-2008, making solar power far more competitive in a number of sunny countries.

By the end of 2010, many countries were rushing to make their PV tariffs less generous. Indeed, Spain and the Czech Republic both moving to make retroactive cuts in feed-in tariff levels for already-operating projects "damaged investor confidence," the report says. "Other governments, such as those of Germany and Italy, announced reductions in tariffs for new projects - logical steps to reflect sharp falls in technology costs."

n 2010, wind continued to dominate in terms of financial new investment in large scale renewables, with US$94.7 billion (up 30% from 2009). However, when investments in small scale projects are added in solar is catching up, with US$86 billion in 2010, up 52% on the previous year. With US$11 billion invested, biomass and waste-to-energy come in third in front of biofuels, which boomed at US$20.4 billion in 2006, but fell off dramatically - to US$5.5 billion last year.

The sharpest percentage jumps in overall investment were seen in small-scale projects - up 91% year-on-year at US$60 billion, and in government-funded research and development, up 121% at US$5.3 billion, as more of the "green stimulus" funds promised after the financial crisis arrived in the sector.

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