Solar energy attracts $149.6bln investment in 2014

LAHORE: Global investment in renewables bounced back in 2014 with solar spearheading the upward trend with 25 percent investment at $149.6 billion, followed by wind, showing 11 percent increase to a record $99.5 billion.
The UNEP’s 9th annual ‘Global Trends in Renewable Energy Investments’ report revealed on Tuesday, which was prepared by the Frankfurt School-UNEP Collaborating Centre, and Bloomberg New Energy Finance.
However, Pakistan has failed to board the bandwagon of renewables, especially solar and wind, despite being rich in both these resources. There is no mention of even meagre development in this part of the world in the report.
According to global trends in renewable energy in 2014, some 49GW of wind capacity and 46GW of solar PV capacity were added worldwide, both records. As in previous years, the market in 2014 was dominated by record investments in solar and wind, which accounted for 92 percent of overall investment in renewable power and fuels.
The dominant feature of the solar sector saw unprecedented expansion in China and Japan. Between them, the two Asian giants invested $74.9 billion in solar in 2014, around half the world’s total.
In China, utility-scale projects of more than one megawatt made up about three-quarters of the solar investment of $40 billion, which was a 45 percent increase on the previous year. In Japan, on the other hand, investment was dominated by small scale projects of less than a megawatt, which account for 81 percent of the total solar investment of $34.8 billion, a 13 percent increase on 2013.
Among other renewables, offshore wind projects worth $18.6 billion were financed globally in 2014. This was 148 percent higher than the previous year and 45 percent higher than the next highest year, 2010. Most of this total -$16.2 billion -was in Europe with China accounting for the remaining $2.4 billion.
Other renewable energy sources did not perform so well by comparison. Biofuels fell eight percent to $5.1 billion, biomass and waste-to-energy dropped 10 percent to $8.4 billion and small hydro was down 17 percent to $4.5 billion. Only geothermal bucked the trend with a 27 percent increase to $2.7 billion.
A salient feature of the 2014 result was the rapid expansion of renewables into new markets in developing countries, where investments jumped 36 percent to $131.3 billion. China with $83.3 billion, Brazil $7.6 billion, India $7.4 billion, and South Africa $5.5 billion were all in the top 10 investing countries, while more than $1 billion was invested in Indonesia, Chile, Mexico, Kenya, and Turkey.
Global investments in renewable energy rebounded strongly last year, registering a solid 17 percent increase after two years of declines and brushing aside the challenge from sharply lower crude oil prices.
Major expansion of solar installations in China and Japan and record investments in offshore wind projects in Europe helped propel global 2014 investments to $270 billion, a 17 percent surge from the 2013 figure of $232 billion.
It was the first annual increase in dollars invested in and committed to renewables (excluding large hydro-electric projects) in three years, a total just three percent below the all-time record of $279 billion set in 2011. The falls in the investment figures for 2012 (to $256 billion) and 2013 (to $232 billion) were attributed in part to lower prices for renewable energy technologies due to economies of scale.
The 103GW of generating capacity added around the world made 2014 the best year ever for newly installed capacity, according to the UNEP’s report. A continuing sharp decline in technology costs -particularly in solar but also in wind -means that every dollar invested in renewable energy bought significantly more generating capacity in 2014.
The 103GW of capacity added by new renewable energy sources last year compares to 86GW in 2013, 89GW in 2012 and 81GW in 2011.
Wind, solar, biomass and waste-to-power, geothermal, small hydro and marine power contributed an estimated 9.1 percent of world electricity generation in 2014, up from 8.5 percent in 2013. This meant that last year the world electricity system emitted 1.3 gigatonnes of CO2 -roughly twice the emissions of the world’s airline industry -less than it would have if that 9.1 percent had been produced by the same fossil-dominated mix generating the other 90.9 percent of world power.
“Once again in 2014, renewables made up nearly half of the net power capacity added worldwide,” says Achim Steiner, UN Under-Secretary-General and Executive Director of UNEP.
“These climate-friendly energy technologies are now an indispensable component of the global energy mix and their importance will only increase as markets mature, technology prices continue to fall and the need to rein in carbon emissions becomes ever more urgent. The growing penetration of renewable generation in the world’s developing economies is one of the important and encouraging aspects of the 2014 report.”
China saw by far the biggest renewable energy investments last year -a record $83.3 billion, up 39 percent from 2013. The US was second at $38.3 billion, up seven percent on the year (though this is below its all-time high reached in 2011). Third came Japan, at $35.7 billion, 10 percent higher than in 2013 and its biggest total ever. —Munawar Hasan