The UNEP report, prepared by the Collaborating Centre for Climate and Sustainable Energy Finance in association with Bloomberg New Energy Finance, shows that despite the increasingly competitive commercial environment, total global investment in renewables (excluding large hydro) increased last year by 17% to a record $257 billion. This was a six-fold increase on the 2004 figure and 94% higher than the total in 2007, the year before the world financial crisis hit. Although last year’s 17% increase was smaller than the 37% rise recorded in 2010, it was achieved against the backdrop of a widening sovereign debt crisis in Europe and during a period of rapidly falling prices for renewable power equipment.
The Ren21 report notes that during 2011, renewables continued to grow strongly in all end-use sectors – power, heating and cooling and transport and renewable sources now account for 16.7 % of the global supply of global ‘final energy’.
In the power sector, renewables accounted for almost half of the estimated 208 gigawatts (GW) of electric capacity added globally during the year. By the end of 2011, total renewable power capacity worldwide exceeded 1,360 GW, up 8% over 2010; renewables comprised more than 25% of total global power-generating capacity (estimated at 5,360 GW in 2011) and supplied an estimated 20.3% of global electricity.
Solar attracted nearly twice as much investment as wind and total investment in solar power jumped 52% to $147 billion.
Competitive challenges intensified sharply, leading to sharp drops in prices, especially in the solar market – a boon to buyers but not to manufacturers, a number of whom went out of business or were forced to restructure. Photovoltaic (PV) module prices fell by close to 50%, and onshore wind turbine prices by around 10%. These changes brought these two leading renewable power technologies closer to competitiveness with fossil-fuel alternatives such as coal and gas.
Achim Steiner, UNEP Executive Director said “There may be multiple reasons driving investments in renewables from climate, energy security and the urgency to electrify rural and urban areas in the developing world as one pathway towards eradicating poverty—whatever the drivers the strong and sustained growth of the renewable energy sector is a major factor that is assisting many economies towards a transition to a low carbon, resource efficient, Green Economy” adding “This sends a strong signal of opportunity to delegates at the Rio+20 Summit: namely that transforming sustainable development from patchy progress to a reality for seven billion people is achievable when existing technologies are combined with inspiring policies and decisive leadership.”
China remains the leading investor in renewables with $52 billion excluding large hydro, closely followed by the US with $51 billion. Europe leads the regions with $101 billion in 2011. Among the other major developing economies, the star performer was India, where the country’s National Solar Mission helped to spur an impressive 62% increase in renewable energy investment to $12 billion, the fastest investment expansion of any large renewables market in the world.
At least 118 countries, more than half of which are developing countries, had renewable energy targets in place by early 2012, up from 96 in 2011, although some slackening of policy support was seen in developed countries. This weakening reflected austerity pressures, particularly in Europe, and legislative deadlock in the US Congress.
In USA renewables provided 12.7% of total domestic electricity in 2011, and an estimated 39% of electric capacity added in 2011 was from renewable sources, mostly wind power. Renewable energy sources accounted for about 11.8% of U.S. domestic primary energy production (compared with Nuclear’s 11.3%).
China again led the world in the installation of wind turbines and was the top hydropower producer and leading manufacturer of PV modules in 2011. Wind power generation increased by more than 48.2% during the year.
In the European Union, renewables accounted for more than 71% of total electric capacity additions in 2011, with solar PV alone representing nearly half (46.7%) of new capacity that came into operation.
Germany remained the third biggest market for renewable energy investment. Renewable sources met 12.2% of total final energy consumption and accounted for 20% of electricity consumption
Compared with other developing regions of the world, Latin America is far closer to achieving full access to energy, particularly to electricity. Six Latin American countries expanded solar home systems which has resulted in the installation of more than 113.000 units in 2011.
In Africa, 8,432 new biogas plants were installed in nine countries in 2011 and production rates of biogas plants were up 100% compared to 2010.
Mohamed El-Ashry, Chairman of REN21 was equally positive in his analysis. “Despite the continuing economic crisis in some key markets, and continuing political uncertainties, more renewable energy was installed last year than ever before,” adding “policy development and implementation were stimulated by the Fukushima nuclear catastrophe in Japan, along with improvements in renewable energy costs and technologies.” El-Ashry also highlighted employment opportunities as a key driver in the renewable energy arena.
“Globally there are more than 5 million jobs in renewable energy industries, and the potential for job creation continues to be a main driver for renewable energy policies.”