Investment in renewable energy dips globally as prices fall
- Author: Joey Payne Apr 07, 2017,
Apr 07, 2017, 2:18
A new report by UN Environment, the Frankfurt School-UNEP Collaborating Centre, and Bloomberg New Energy Finance, finds that all investments in renewables totaled $241.6 billion (excluding large hydro). The research also shows that this record level of capacity additions was made with 23% less overall investment compared to the previous year.
Despite the increase, global investment in new renewables was down nearly a quarter to $241.6 billion as the costs of renewables such as solar and wind fell.
Noting some challenges in achieving the 100% transition, the report mentioned that in some regions, most notably Africa, the United States and Japan, experts were sceptical about reaching that figure in their own countries or regions by 2050, largely due to the vested interests of the conventional energy industry.
Investment in power generated from fossil fuels was roughly half that of renewables past year, according to the report, which is based on data from Bloomberg New Energy Finance.
According to the latest report by the International Renewable Energy Agency (IRENA), last year was a record year for renewables as the "global renewable energy generation capacity increased by 161 gigawatts (GW) in 2016".
The proportion of electricity coming from renewable sources, not including large hydropower plants, rose from 10.3 per cent to 11.3 per cent in 2016.
New investment in solar totaled $113.7 billion, a decrease of 34% from the record high in 2015. Within this, there was a 71GW addition to solar energy capacity, meaning it lead the way for the energy capacity. Offshore wind ($25.9 billion) dominated Europe's investment, up 53 per cent thanks to mega-arrays such as the 1.2 gigawatt Hornsea project in the North Sea, estimated to cost $5.7 billion. Solar capacity additions, however, rose to an all-time high of 75 gigawatts. With this, the operating renewable portfolio of TPREL grows to 1959 MW, comprising 907 MW wind, 932 MW solar, and 120 MW waste heat recovery capacity as of today.
While much of the total decline in financing is pegged to lower equipment costs, some of is due to a slowdown in China, Japan and other emerging markets, McCrone said. Japan slumped 56 per cent to $14.4 billion. "Mexico, Chile, Uruguay, South Africa and Morocco all saw falls in investment of 60% or more, on a mixture of scheduled pauses and delays with auction programmes and financings", according to the report. Jordan was one of the few new markets to buck the trend, investment there rising 148% to $1.2 billion.
"Even though investment is down, annual installations are still up". The Global Trends report indicates that 1.7 Gt of Carbon dioxide emissions were abated as a result of the 2016 renewable capacity additions. The improving capacity is also improving the business opportunities for renewable energy, as well as the socio-economic benefits in terms of fueling economic growth and creating more jobs as the industry gets larger.