In what has become a record year for clean energy, total global investment in gas and coal-fired power stations dropped to less than half of the total investment in renewable energy sources for 2015.
In addition to this, it is also the first time that financial investment in renewables by developing countries have overtaken that of the rest of the world.
“Extremely Significant”
A professor of energy policy at the University of Exeter, Catherine Mitchell, has called this change “extremely significant” and says that it clearly demonstrates the new trend in energy investment.
She continued:
“We are looking at serious sums of money being invested in clean energy, with the dirtiest forms of fossil fuels the losers. This is the direction of travel that we need to see to have a chance of escaping the worst impacts of climate change.”
Roughly £200bn ($286bn) was invested worldwide in 2015, which is higher than the previous record of $278bn- set in 2011. This is according to research that the UN Environment Programme published last Thursday. The numbers do not include investment in large hydroelectric plants but the statistics do include onshore and offshore wind farms, biomass and solar.
Chinese Focus Shifting
A huge 36% of this global investment was from China alone, as the country tries to use clean energy to combat its severe levels of air pollution. Total Chinese investment went up by 17% from 2014 to 2015, reaching a total of $103bn.
It is thought that this increase is set to continue over the coming years, as China recently released its new five year plan to shift its focus to renewable energy.
Perhaps the most surprising thing about this trend is the fact that it has come at the same time as fossil fuel prices plummeting worldwide. However, because of the fact that the report only covers investment from 2015, it may have failed to properly portray the true impact of the continued fall in fossil fuel costs; it is possible that this will effect future investment trends.
Investment in the US was also up, as rules governing the level of spending on renewables took effect. However, even though investment went up by one-fifth, the new total of $44bn is still less than half of China’s.
Europe Falling Behind
Europe had an extremely weak performance in this area, after previously being a leader in renewables. Total investment dropped by a fifth to just $49bn, in spite of a big increase in offshore wind. This is according to a report conducted by Bloomberg New Energy Finance and the Frankfurt School of Finance and Management.
It is believed that some of the figures for Europe will have been effected by the drop in the cost of solar panels- around 60% since 2009. But Mitchell believes that it is also a sign that politicians should be doing more to encourage investment in renewables.
She said:
“Globally, we are seeing a rapid take up of renewables alongside a switch to more energy-efficient and flexible electricity systems. Technology changes are facilitating that transition, but increasingly it is governments that are holding it back, as policy makers are failing to put in place policies that can keep up,”
“This is particularly the case in the EU, that has been prone to a ‘boom and bust’ approach to renewables deployment [by which an initial enthusiasm from politicians is followed by a rowing back as the costs of subsidies become apparent], which will see [member states] lose out to countries that can provide more long-term policy clarity.”
Biomass Investment Falls
According to Unep, solar power had a very strong performance with a total increase in investment of 12%- reaching a total of $161bn worldwide. Wind had a smaller increase of just 4% to $110bn.
Sources based on biomass saw drops in investment, as did wave and tidal energy systems, along with geothermal. The falling investment in controversial biofuels is likely to be music to the ears of environmental campaigners; such fuels saw decreases of 35% to $3bn.
The small amounts invested in geothermal technology, which fell by more than 20% to just $2bn, and the tiny amounts invested in marine energy, which fell by 42% to only $215m.
Oil Prices May Change Trend
Unep went on to warn that these positive trends may not continue with the persistent drops in fossil fuel prices, which were not fully seen when this report was made.
The authors said:
“Policy support for renewables remains fickle. It is also possible that the recent big fall in coal, oil and gas prices may tempt some developing countries to keep relying on fossil fuel capacity for longer.”
