After Record Growth, Renewable Energy to Face “Very Difficult” Year
Despite sluggish growth in most developed countries and the on-going debt crisis in Europe, renewable energy investment showed solid growth of 17 percent in 2011 over the year before, says a new status report on renewable energy.
In 2011, renewable energy investment hit a new record of $257 billion, according to “Global Trends in Renewable Energy Investment,” which was released Monday by the United Nations Environment Programme (UNEP). That brings the total investment in the sector over the past five years to nearly a trillion dollars. From 2006 to 2011, annual investments nearly doubled.
There had been concerns that “the financial crisis and the economic turmoil in certain parts of the world would put a dent in the overall investment flows into renewables,” said UNEP Executive Director Achim Steiner.
Nonetheless, “2011 saw a solid, continued increase in total investment worldwide,” said Steiner, who spoke from a press conference in Rio de Janeiro, Brazil, leading up to the Rio+20 environmental summit later this month.
At the same time, each dollar of investment went farther than ever before, as prices for wind and solar fell.
Prices for solar modules—the part of a solar panel that captures sunlight and turns it into electricity—plummeted by nearly half in 2011 alone, and 75 percent over the past three years, said Michael Liebreich, chief executive of Bloomberg New Energy Finance, which collaborates with the UNEP in producing the annual report.
So renewable energy installations set new records in 2011, with 29 billion watts of solar panels and 40 billion watts of wind turbines installed, according to a new companion report by REN21, “Renewables 2012 Global Status Report.”
Worldwide, 208 billion watts of new power generating capacity—including coal, natural gas, and nuclear—were installed in 2011. Almost half of that total was renewable, the REN21 report notes, with wind and solar making up more than two-thirds of the renewables, and most of the rest from hydroelectric.
“We find ourselves at this strange juncture,” Liebreich said, “where a lot of the public debate is framed around the failure of renewables,” including two solar energy companies that folded—Solyndra, which received support from the Department of Energy, and Konarka, which got support from the state of Massachusetts when Mitt Romney was governor.
“And yet if you look at the physical rollout of the technologies,” Liebreich added, “then you see that progress has continued at a compound annual rate somewhere in excess of 20 percent even over the past five years, through the financial crisis.”
Despite this growth, 2012 will be “a very, very difficult year for the sector” Liebreich forecast.
Different regions of the world are each facing different barriers to the growth of renewable energy, the UNEP report points out.
“Europe has really struggled with the debt crisis,” Steiner said, calling it “destabilizing.”
In Europe, many countries are implementing austerity measures and cutting back their “feed-in tariffs” that have subsidized a rapid growth in solar and wind energy.
“The single thing that could move the clean energy sector ahead would be to resolve the European crisis,” said Liebreich, because Europe has been the leading investor in renewable energy.
In the U.S., the low price of natural gas—well below $3 per thousand cubic feet (mcf), far cheaper than in the rest of the world—has made it more difficult for renewable energy to compete in North America.
(See: “Shale Gas: A Boon That Could Stunt Alternatives, Study Says”)
However, natural gas won’t remain so cheap, argued Liebreich. The boom in shale gas production is “essentially being dumped on the market,” making prices “unnaturally low,” he said. “Everybody knows you need prices of $4, $5 or $6 in order for the gas producers … to cover their costs.”
In developing countries, the main barrier is no longer cost, said Steiner. Instead it’s access to finance, something many of the least-developed countries need outside assistance with.
“Kenya is ready to double its electricity generating infrastructure, purely with renewables,” Steiner said. “The delays and constraints are largely in the way that international financial support is currently being provided,” and the new UNEP report calls for changes in linking international development funds and clean energy efforts.
Emerging economies saw rapid growth in their renewable energy sectors.
China was, for the third year in a row, the world’s leader in renewable energy investment.
India ramped up its National Solar Mission program, achieving “the single largest increase in a renewable energy technology from one year to another,” said Steiner. As Liebreich put it, “India has really been the star pupil in the class.”
For a rundown of renewable energy installed in countries around the world, see a new scorecard from the Natural Resources Defense Council, which called for countries to set a target to get 15 percent of electricity from renewable sources by 2020.
Related Topics
Go Further
Animals
- This ‘saber-toothed’ salmon wasn’t quite what we thoughtThis ‘saber-toothed’ salmon wasn’t quite what we thought
- Why this rhino-zebra friendship makes perfect senseWhy this rhino-zebra friendship makes perfect sense
- When did bioluminescence evolve? It’s older than we thought.When did bioluminescence evolve? It’s older than we thought.
- Soy, skim … spider. Are any of these technically milk?Soy, skim … spider. Are any of these technically milk?
- This pristine piece of the Amazon shows nature’s resilienceThis pristine piece of the Amazon shows nature’s resilience
Environment
- Are the Great Lakes the key to solving America’s emissions conundrum?Are the Great Lakes the key to solving America’s emissions conundrum?
- The world’s historic sites face climate change. Can Petra lead the way?The world’s historic sites face climate change. Can Petra lead the way?
- This pristine piece of the Amazon shows nature’s resilienceThis pristine piece of the Amazon shows nature’s resilience
- Listen to 30 years of climate change transformed into haunting musicListen to 30 years of climate change transformed into haunting music
History & Culture
- Meet the original members of the tortured poets departmentMeet the original members of the tortured poets department
- Séances at the White House? Why these first ladies turned to the occultSéances at the White House? Why these first ladies turned to the occult
- Gambling is everywhere now. When is that a problem?Gambling is everywhere now. When is that a problem?
- Beauty is pain—at least it was in 17th-century SpainBeauty is pain—at least it was in 17th-century Spain
Science
- Here's how astronomers found one of the rarest phenomenons in spaceHere's how astronomers found one of the rarest phenomenons in space
- Not an extrovert or introvert? There’s a word for that.Not an extrovert or introvert? There’s a word for that.
- NASA has a plan to clean up space junk—but is going green enough?NASA has a plan to clean up space junk—but is going green enough?
- Soy, skim … spider. Are any of these technically milk?Soy, skim … spider. Are any of these technically milk?
Travel
- Could Mexico's Chepe Express be the ultimate slow rail adventure?Could Mexico's Chepe Express be the ultimate slow rail adventure?
- What it's like to hike the Camino del Mayab in MexicoWhat it's like to hike the Camino del Mayab in Mexico