Global investment in new renewable energy was more than double that for coal and gas in 2015, revealing a structural change in energy generation, commentators said.
The latest annual report on global energy trends by the United Nations Environment Programme (UNEP) and Bloomberg New Energy Finance (BNEF) revealed that $266bn was invested in solar, wind and other renewable capacity, compared with $130bn in coal and gas. A further $20bn was invested in early stage renewable technology, research and development, 3% higher than the previous peak in 2011.
Excluding large-scale hydro, renewables made up 54% of added global generation capacity last year. Solar photovoltaics and wind together added 118GW in generating capacity, compared with the previous record of 94GW set in 2014, the report states.
More modest additional capacity was provided by biomass and energy-from-waste, geothermal, solar thermal and small hydro, it says, adding that 250MW utility-scale electricity storage (excluding pumped hydro and lead-acid batteries) was installed worldwide, up from 160MW in 2014.
For the first time, investment in renewables was higher in developing countries than in developed countries. Developing and emerging economy nations recorded investment of $156bn, up 19% from 2014. By contrast, investment in developed countries was $130bn, down 8% from the previous year.
Investment in Europe was down 21%, from $62bn in 2014 to $48.8bn in 2015. This represented the continent’s lowest figure for nine years despite record investments in offshore wind projects.
UK investment was $22.2bn, placing it fourth in the global investment league table. However, the report authors predict that subsidy cuts announced by the government will see overall UK investment decline in 2016. The reports found evidence that some developers had rushed to prepare their offshore wind projects ready ahead of the closure of the renewables obligation in 2017, while impending cuts to feed-in-tariffs for solar power were partly to blame for a drop of more than a half in project financing in utility-scale solar in Europe, the report states.
‘The fact that a majority Conservative government was elected in May 2015 may also have convinced some developers to get on with their projects rather than relying on future auctions that might or might not happen,’ the report states.
Globally, renewables, excluding large-scale hydro, still account for a small minority of total installed power capacity at around 16.2%, but that figure increased from 15.2% in 2014 and continues to climb, the report notes. Meanwhile, electricity generated by renewables was 10.3% of global generation in 2015, up from 9.1% in 2014.
Catherine Mitchell, professor of energy policy at the University of Exeter, said: ‘There are some eye-catching figures in this report which are, as UNEP says, extremely significant.’
She added that the report should not be viewed in isolation; pointing to a report from the International Energy Agency identifying a decoupling of global energy-related emissions and economic growth, driven largely by investment in renewables and energy efficiency; China’s recent new five-year plan outlining plans to scale up investments in renewable energy; and a report by the Energy and Climate Change Intelligence Unit suggesting that coal growth in Asia is faltering.
But Professor Udo Steffens, president of the Frankfurt School of Finance and Management, warned: ‘Coal-fired power stations and other conventional power plants have long lifetimes. Without further policy interventions, climate altering emissions of carbon dioxide will increase for at least another decade.’
