Developing nations take energy lead

Weekend West
9 July 2011, Page: 70

Investment in renewable energy last year amounted to a record $US211 billion ($198 billion), a rise of 32% over 2009 and 540% over 2004, according to a United Nations backed report. China, investing $US48.9 billion, up 28%, accounted for more than a fifth of the total, in a year when developing countries for the first time outstripped rich economies in renewables investment, the report said.

Factors behind the surge include stimulus money earmarked after the 2008 financial crash now finding its way into the market, sustained prices for fossil fuels and government perks such as feed in tariffs for cleaner power. The report, Global Trends in Renewable Energy Investment 2011, is a collaboration of the UN Environment Program, the Frankfurt School of Finance and Management in Germany and Bloomberg New Energy Finance.

If big hydropower dams are excluded, renewable power made up 8.1% of total world power generation capacity last year, compared with 7.1% in 2009. The report says the most mature technology, wind, continued to dominate the renewables sector, accounting for $US94.7 billion of investment projects last year. Solar investment was $US26.1 billion and biomass and waste-to-energy projects amounted to $US11 billion.

A almost catches up with wind if small scale installations, such as rooftop photovoltaic panels, are included. The small scale solar sector doubled in value last year, helped by subsidies, especially in Germany, France, Italy and the Czech Republic. These subsidies were being pared back by governments, but even so the market "is likely to stay strong" in 2011, the report said.

The cost effectiveness of wind and solar has risen enormously. The price of PV panels per MW has fallen by 60% since mid 2008, and that of wind turbines by 18%. "The tipping point, where renewables becomes the predominant energy option, now appears closer than it did just a few years back", it said.