Global RE investments surge to $ 211 billion in 2010

Posted on July 9, 2011 by

UNEP recently published the “Global Trends in Renewable Energy Investment 2011” in collaboration with Bloomberg New Energy Finance.  At a overall level, the RE investements grew by 32% to reach $ 211 billion in 2010. Emerging economies contributed $72 billion, a notch higher than the developed economies, at $70 billion. This is a significant shift from the situation 5-6 years back when the skew used to be 75% in the developed market.

As expected, China led the tally with investments totaling $48.9 billion. India’s numbers though growing at 25% look pale at $3.8 billion. In rest of Asia, RE investments increased by 31%, to $4 billion. In Central and South America, the 2010 investments stand at $13.1 billion, clocking a growth of 39%. Africa and middle east doubled their RE invesements against a small base $ 2.45 billion in 2009 to reach $ 5 billion in 2010.

Commenting on the report, Udo Steffens, President of the Frankfurt School of Finance and Management said “The investment activity in the developing world is not only leading to innovations in renewable energy technologies. Further more, it will open up new markets as first mover investors are facilitating a range of new business models and support entrepreneurship in the developing world.”

There are clear shifts in RE investment patterns. Large-scale investments, primarily by the government are the drivers of China’s numbers while retail, small-scale and distributed RE applications such as rooftop solar are driving the growth in Germany. Partly due to the bruised economies, the large-scale, government investments in Europe fell by 22% to $ 35.2 billion but the retail investments more than doubled to $34 billion.

There are a number of factors at play in renewable energy investment numbers. A reduction in natural gas prices made construction of gas-fired power stations more attractive. On the other hand, competition across the supply chain and per megawatt costs reductions made sure that offset these factors were offset. There has also been decline in the cost of solar PV modules, driving investment in small-scale, distributed solar power in Europe even though governments scaled back feed-in tariffs. Per MW cost of PV modules has fell by 60% in last 2 years. Wind power costs are relatively more stable, having fallen by 18% in the past two years.

The technology wise investment details are as under

  • Wind power continues to be the most important source of renewable energy investment. It increased by 30% over 2009 to $94.7 billion.
  • Solar power investment were $86 billion in 2010, having grown by 52%. This includes investments in small-scale projects.
  • Biomass and waste-to-energy investments were $11 billion.
  • Biofuels investments were $5.5 billion in 2010, significantly below $20.4 billion in 2006.

Source: Clean Technica