A United Nations report released earlier this year stated that global investment in renewable energy rose by nearly a third in 2010.
The Figures
$211 billion was invested into green energy in 2010, a 32% rise from the $160 billion invested in 2009, and a 540% rise since 2004 [1]. There was a large leap in investment in renewable energy projects in the Third World and for the first time, developing nations spent more on “financial new investment” ($72 billion) than developed nations ($70 billion). Back in 2004, however, “financial new investments” in developing countries were only about a quarter of those in developed countries [1].
China was the world leader in green energy investment in 2010 (mainly due to wind farms), spending $48.9 billion – up 28% from 2009. Strong growth in investment was also seen in other emerging economies [1]:
- South and Central America: up 39% to $13.1 billion.
- Middle East and Africa: up 104% to $5 billion.
- India: up 25% to $3.8 billion.
- Asian developing countries (excluding China and India): up 31% to $4 billion
There was a notable increase in the investment of small-scale projects such as rooftop solar panels – up 91% to $60 billion globally. This was particularly apparent in Germany, where investment increased by 132% to $34 billion [1].
However, there wasn’t a growth in all sectors: there was a decline of 22% to $35.2 billion in the investment in large-scale renewable projects (e.g. wind farms) in Europe [1].
Reasons for the Rise
The United Nations Environment Programme (UNEP) suggested that the drop in the price of solar cells and the rapidly growing interest in green energy in developing countries were the main reasons for the rise in investment [1].
Furthermore, Achim Steiner, executive director of UNEP stated: “The continuing growth in this core segment of the green economy is not happening by chance. The combination of government target-setting, policy support and stimulus funding is underpinning the renewable industry’s rise and bringing the much needed transformation of our global energy system within reach” [1].
Energy policy analyst at Finland’s Aalto University, Peter Lund, added: “Clean energy is starting to make a difference. However, it is very important to stress that new energy technologies’ markets still rely much on government support and stimulus” [2].
Will Investment Continue to Rise?
In the next 12 months there are some key gatherings that are likely to have a significant impact on the global push towards a green economy.
For example, the United Nations Climate Change Conference is taking place this year, from the 28th November to the 9th December [3], and the Rio+20 Summit is occurring next year [4].
These meetings are perfect opportunities to try and accelerate the move towards a low-carbon and energy-efficient economy. I believe that it is the outcome of important meetings such as these that will have a strong influence on the future investment in green energy.
References:
[1] UNEP – The ‘Global Trends in Renewable Energy Investment 2011’ report.
Accessible at: http://jumanjisolar.com/wp-content/uploads/downloads/2011/07/unep_global_trends_2011.pdf
[2] http://www.usatoday.com/money/industries/energy/2011-07-07-green-energy-spending_n.htm
