A new report presented by Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance, the United Nations Environment Programme (UNEP) and Bloomberg New Energy Finance says there has been a 14 percent drop in renewable energy investments globally.
The report, Global Trends in Renewable Energy Investment 2014, has finally given the prophets of doom something to cheer about. They are now readying themselves in anticipation that maybe finally their chance has arrived to wax eloquent about how renewable energy is losing its steam.
Let me present the facts as they are. The Renewable Energy Policy Network 21 (or REN21) established in 2005 has been bringing out global status reports on the trends and growth in renewable energy. A cursory glance at their record sheets just after the executive summary presents a very consistent picture that is a far cry from what pessimists would make us believe.
Renewable Energy Growth between 2004- 2012
Year Investment (in billions) Installed capacity (Gigawatt)
2004 $30 billion 160 GW
2005 $38 billion 182 GW
2006 $ 63 billion 207 GW
2007 $ 104 billion 240 GW
2008 $130 billion 280 GW
2009 $ 160 billion 305 GW
2010 $ 227 billion 315 (excluding hydro power)
2011 $ 279 billion 395 GW
2012 $ 244 billion 480 GW
Source: REN21 Global Status reports
Both the investments and the installed capacity have shown a north ward trend. The trend looks even more impressive if we take into account the global economic meltdown of 2008 and its lingering impact till now.
Even the experts who have compiled the report have cautioned the readers that a large chunk of drop in investment is due to the falling cost of solar and wind, especially solar, installations. Still policy uncertainty that gripped China last year due to regime change and an almost policy paralysis in India due to many state assembly elections and impending general elections was one of the reasons for the depressed investments.
Both the countries are major players as far as investment, installation and future expansion plans are concerned. However, with the new Chinese leadership now comfortably ensconced in their power bubble and India on the verge of choosing a new set of leaders things are poised to change for the better.
In the short term four factors will spur the growth of renewable energy. A long term (or at least for 5 years in India’s case) clarity in the two most populous nations on Earth (India and China), coupled with Japan’s resolve to shift to renewable energy, US’ decreasing dependence on coal and imported oil and consequently Obama administration’s new found vigour to pursue climate agenda and Russia’s increasingly tenuous relations with the Western Europe where most of its gas is sold.
Renewable energy markets in India, China and Japan will not only take care of over capacity that has become the bane of European companies, but create additional demand that would attract even the most cautious of investors because they wouldn’t be able to resist the lure of the huge market.
Meanwhile in the US, shale gas is steadily emerging as a clean source of power giving coal dominant states a viable option. Their strident anti renewable energy stance is toning down a bit. If the Democrats win back majority in this year’s house of Representatives elections due in November, it will give the President Barak Obama, the necessary muscle to push with his grand renewable energy plan.
Last, but equally important, the Russian engagement in Ukraine and its strong arm tactics of raising gas price can have a spill over effect elsewhere. Russia supplies gas to Western Europe and as the economic sanctions are set to intensify Russia can strike back with gas price hike. It has already done this act in the past. So to decrease their dependence on Russian gas for power plants countries in Western Europe will revive their renewable energy plan with more purpose and gusto.
These trends are going to define the renewable energy space in the coming years. This means the market for the alternate energy will witness one of the best times in coming months.
Clean Ganga: Where e… on Clean Ganga: Where experts fai… indiadynamic on Incremental changes in agricul… Suraksha on Incremental changes in agricul… Ellen on Urban green cover: Stable plan… Georges Radjou on What is sustainability?