Global investments in renewable energy hit $244b

renewable-energyInvestment in renewable power and fuels, including small hydroelectric projects was $244 billion in 2012, representing a decrease of 12 per cent from the previous year’s record figure of $279 billion.

This was contained in United Nations Environment Programme (UNEP) 2013 report of renewable energy released recently.

According to the report, total investment in developed economies in 2012 was down 29 per cent at $132 billion while that in developing economies was up 19 per cent at $112 billion, the highest ever.

After being neck-and-neck with the U.S. in 2011, China was the dominant country in 2012 for investment in renewable energy, its commitments rising 22 per cent to $67 billion, thanks to a jump in solar investment. But there were also sharp increases in investment for several other emerging economies, including South Africa, Morocco, Mexico, Chile and Kenya.

It added that activity trends were downbeat in many, but not all, developed economies. “Policy uncertainty took a heavy toll of investment in the U.S. – down 34 per cent at $36 billion – and also in former renewable energy early-movers such as Italy and Spain.

The report added: “The result was that, despite problems in former market hot-spots in southern Europe, the amount of PV capacity installed in 2012 was a record 30.5GW, up from 2011’s 28.8GW. However this came at reduced cost, contributing to an 11 per cent fall in overall solar investment last year, to $140 billion.

“Japan and Germany were two countries at the sharp end of the powerful trends in the solar market in 2012.

Japan saw investment in renewable energy (excluding research and development) surge 73 per cent to $16 billion.”

It disclosed that Germany saw renewables in vestments lip 35 per cent to $20 billion. “Part of this was down to a pause in offshore wind financings, as grid connection delays were addressed, but the major reason was that the 7.6GW of solar capacity installed in 2012 came at much lower cost than would have been the case in 2010 or 2011,” it added.

Despite high levels of investment in renewable energy, the report pointed out that generators were continuing to spend large sums on fossil-fuel assets. “In 2012, gross investment on coal, gas and oil power was an estimated $262 billion, some $2 billion higher than the total investment in renewable power capacity including large hydro. Net investment in fossil-fuel technologies, at $148 billion, was much less than that in renewable.”

It hinted that clean energy share prices had another poor year in 2012, the Wilder Hill New Energy Global Innovation Index, or NEX, slipping six per cent while wider stock markets gained. This followed a 40 per cent plunge in the previous year.

“The NEX reached a low in late July some 78 per cent below its record level reached in November 2007, before beginning a rally that extended into 2013.

“The main reasons for the further under-performance of renewable energy shares last year were severe distress in the manufacturing supply chain for both wind and solar, caused by over-capacity; and investor unease about future prospects in the light of unhelpful policy moves in Europe and North America.

“There were contrasts in the trends seen among different categories of investment. Small-scale capacity was the strongest area, rising three per cent to $80 billion in 2012. Asset finance of large projects slipped 18 per cent to $149 billion,” it added.

It noted that investment in specialist renewable energy companies by public market investors dropped 61 per cent to $4 billion, while that by venture capital and private equity investors fell 30 per cent to $4 billion, the lowest since 2005. Corporate and government research and development spending, however, edged up one per cent to $10 billion.

It added that apart from the $244 billion worldwide investment, there was an important additional sum spent on new hydroelectric projects of more than 50MW.

“Some 22GW of such projects are estimated to have come online during 2012, equivalent to investment of around $33 billion.”

 

Information from The Guardian was used in this report.

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