Last year, the world investment in renewable energy rose to $211 billion according to the UN Environment Program, an increase of 32% over 2009. Using 2004 as a baseline, that is more than a five-fold increase. Not counting hydroelectric dams, renewable energy supplied 5% of global electricity, 30% of new electrical capacity overall. Thanks largely to $48.9 billion in investments in China, more investment in renewables occurred in developing countries than in the mature economies for the first time ever. The developing nations has investments totaling $72 billion to the developed world’s $70 billion.
Regionally, that broke down as follows:
South and Central America: up 39% to $13.1 billion;
Middle East and Africa: up 104% to $5 billion;
India: up 25% to $3.8 billion, and
Asian developing countries excluding China and India: up 31% to $4 billion.
Another interesting datum is the rise of small-scale projects in Europe at the expense of the big projects – the latter actually declined by 22%, falling to $32.5 billion. Because the price of photo-voltaic cells per megawatt has dropped about 60% in the last three years, these have become much more attractive to deploy. This helped with the increases: Germany’s small-distributed capacity investment rose 132% to $34 billion; Italy had a 59% increase rising to $5.5 billion; France increased by 150% to $2.7 billion, and the Czech Republic investments rose 163% to $2.3 billion.
Further good news was on the R&D side, where government-funded research (the kind that isn’t commercially viable now but could be one day – e.g., moon program, Internet) was up 121% to $5.3 billion. That isn’t bad considering the global economy’s condition back when the investment decisions were made in 2008-09.
The UNEP says, “Two areas of investment showed a fall in 2010 compared to 2009: corporate research, development and deployment (down 12% at US$3.3 billion, as companies retrenched in the face of economic hard times) and provision of expansion capital for renewable energy companies by private equity funds (down 1% to US$3.1 billion).”
Weighing on the development and deployment of renewables is the relatively low cost of natural gas, according to the UNEP. Trading between $3 and $5 per million BTU for almost all of 2010 (down from a $13 peak in 2008), natural gas is a “here-and-now” alternative to coal and oil. “This gave generators in the US, but also in Europe and elsewhere, an incentive to build more gas-fired power stations and depressed the terms of power purchasing agreements available to renewable energy projects,” says the report.