Continued Growth in Renewable Energy Investments
Renewable energy technologies are quickly cementing themselves as a key pillar of energy sector development and as an economic powerhouse in their own right. In 2011, a number of forces contributed to impressive growth in renewable energy markets around the world. The most recent installment of Worldwatch’s Vital Signs Online series analyzes the investment growth witnessed across the sector in 2011.
2011 saw total new investment in renewable power and fuel (excluding large hydropower) jump 17 percent over the previous all time high set the year before, setting a new single year record with US$257.5 billion invested in the sector. Net investments in new renewable power capacity outpaced that of fossil fuel capacity over the same period, further displaying the critical importance renewables now play in the global energy mix.
Distributed geographically, both industrialized and developing countries witnessed positive growth over investment totals in the previous year. Industrialized countries accounted for 65 percent of all global investment in 2011, attracting $168 billion overall. Of the 35 percent share invested in developing countries, nearly 80 percent was channeled to renewables in China, India, and Brazil.
China continued to hold the lead in country-specific investment in 2011, attracting US$52 billion to their renewables sector. Enormous growth of 57 percent in the United States, due in large part to a rush to take advantage of expiring government incentives, challenged China’s lead on the sector with investment totaling US$51 billion by year end.
2011 was a year of significant change in the renewables sector. Solar technologies, benefitting from a 50 percent cost reduction over the year, outpaced wind for the top spot in technology-specific investment. Solar technologies attracted nearly US$150 billion in investment, a 52 percent increase over the previous year, making solar and small hydro the only two technologies to post positive growth over total investment in 2010. Wind energy technologies, at over $US80 billion invested, and biomass and waste-to-energy, at just above a combined US$10 billion invested, rounded out the top three technologies for investment in 2011.
Though impressive, it is essential for the continued development of the renewables sector that this upward investment trend be sustained. Meeting the full potential of renewable energy technologies, allowing them to play a critical role in reaching international climate targets as well as energy access goals, depends heavily on the continued development and deployment of renewables fostered through increased investment. The IEA estimates that an average annual investment in renewables of US$235 billion by 2020 is needed to meet the 2-degrees-Celsisus warming scenario. Likewise, the agency also estimates that US$48 billion per year will be needed to provide universal access to modern electricity by 2030. Early signs, however, indicate that the impressive growth witnessed in 2011 is not being repeated in 2012. Through the first two quarters, investment in renewables is down nearly US$20 billion from the same time period last year.
While there are some grounds for concern, the impressive growth in renewable energy investment in 2011 is cause for renewed optimism for the sector. Moving forward, it is clear that renewables will have a growing role to play in the energy systems of the future.
Homepage Image: In 2011, China led the world in country-specific renewable energy investments. (Suntech)
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