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Planet-Profit Report, reporting on sustainable development in the Western United States.

The year renewable investment aced out fossil fuels

2011 will be seen as a tipping point on a global level

Years from now, those interested in sustainable development will likely see 2011 as a tipping point. It was the year global investment in renewable energy technologies surpassed that of fossil fuels.  

In late November,  Bloomberg New Energy Finance team crunched the numbers and found that electricity from the wind, sun, waves and biomass drew $187 billion globally last year compared with $157 billion for natural gas, oil and coal. They also found that accelerating installations of solar- and wind-power plants led to lower equipment prices, making clean energy more competitive with coal.

A Bloomberg report analyzed future investment and found that the value of renewable energy capacity installed will likely double in real terms — from $195 billion in 2010 to $395 billion by 2020 and rise to $460 billion in 2030. The report also predicts an increase of renewables energy production (including large hydro) from 12.6 percent of the whole in 2010 to 15.7 percent in 2030. The Bloomberg New Energy Finance team compiled the report.

Here are some highlights:

• Europe will remain one of the biggest markets for world investment despite economic problems.
• China will take the lead in renewable energy asset finance from Europe in 2014 with an annual investment of about $50 billion.
• The United States and Canada will see no lasting slowdown in projects, together hitting $50 billion of investment by 2020; the U.S.’s total will be about $40 billion.
• Markets outside Europe, the U.S., Canada and China will account for 50 percent of global annual investment by 2020.
• The most rapid growth is expected in developing economies, including India, the Middle East, Africa and Latin America.
• Solar will undergo the fastest percentage of growth (after offshore wind) largely due to cost reductions. An annual average of $130 billion will be spent from 2010 to 2030 compared with $86 billion in 2010.
• The wind sector (both on- and offshore) will continue to expand, attracting $140 billion in 2020 and $206 billion per year by 2030 from 2010’s $82 billion.
• The bio-energy sector will see renewed activity, largely due to commercialization of second-generation technologies, with investments expected to increase from $14 billion in 2010 to $80 billion in 2020.

The report and analysis drew from 65 technical experts with knowledge across all renewable energy technologies and geographical regions, according to Bloomberg.

Lead author Guy Turner said he was most surprised “by the growth in demand from developing countries — not just China, India and Brazil, but the rest of the world.” He said the results indicate that last year’s record growth is not a one-time thing but is a portent of global growth. “Big winners will be the emerging renewable energy hubs in Latin America, Asia, the Middle East and Africa,” he said.

Report findings related to the U.S. include:

• Natural gas prices are likely to increase notably by 2015, which will favor increased investment in renewables.
• Investment in the renewable sector is coming from sources previously not tied to the energy sector, such as Google, and many U.S. utilities have invested more in renewables than is required under state mandates.
• Onshore wind will remain the forerunner in the renewable sector, largely due to its low cost, accounting for 64 percent of total renewable energy capacity by 2030.
• U.S. coal capacity will drop by about 13 percent in this decade and 34 percent between 2020 and 2030, resulting in a 14-percent cut in the total U.S. coal fleet after considering likely new build.
• Natural gas installations will climb 12 percent this decade and an additional 6 percent over the next.
• Nuclear will continue to supply around 20 percent of power generation and capacity will increase by 18 percent over the next 20 years.
• By 2020, 10 percent of U.S. power will come from renewables (excluding hydro) and about 17 percent in 2030.

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