U.N. Report: Renewable Energy Investments Hit New Record in 2015

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Global financial commitments to renewable energy set a record last year. For the first time, the developing world's investments in renewable energy exceeded investments in those technologies by the developed world, according to a report from the U.N. Environment Programme and Bloomberg New Energy Finance.

The report, Global Trends in Renewable Energy Investment, said investments in renewable energy generation, excluding hydroelectric generation over 50 megawatts (MW), totaled an estimated $285.9 billion last year, about 5% greater than the previous record of $278.5 billion set in 2011.

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Click on the icon at right to see aggregate global annual investments in renewable energy from 2004 through 2015.

Global Trends in Renewable Energy Investment, released in March, estimated investments in large-scale hydroelectric generation over 50 MW at about $45 billion in 2015. That sum was excluded from renewable energy totals, which likely reduced investment totals in the developing world more than in the developed world. One reason for excluding those large-scale hydro projects is they have the potential to create significant problems for the environment and indigenous people.

The report also said world-wide investments in renewable energy outstripped investments in coal- and gas-fired generation around the world last year. New coal- and gas generation investments totaled an estimated $130 billion last year, less than half the $265.8 billion invested around the world in renewable energy. Last year was the first time global investments in renewable energy outstripped investments in coal- and gas-fired generation, the report added.

Moreover, investment in renewables in the developing world exceeded renewable investments in the developed world by a $156 billion to $130 billion margin, the U.N. report said. China alone accounted for an estimated $102.9 billion investment in renewable energy last year, about 36% of the world's total. Last year was the first time renewable power investment in the developing world exceeded investments in renewable power in the developed world.

Click on the icon at right to see global investments in renewable energy from 2004 through 2015 by developing and developed countries.

The U.N. report has tracked global investments in renewable energy development since 2004, investment totaled approximately $47 billion. All told, since 2004 the world has invested about $2.3 trillion in renewable energy, the report said.

Despite Europe's global leadership in offshore windpower development, overall investment in renewables across the Continent slipped 21% to $48.8 billion last year, the U.N. report continued. Offshore wind financings surged 11% in Europe last year, to $17 billion, it noted.

The report also said U.S. investments in renewable energy rose 19% in 2015, to $44.1 billion. Solar power projects accounted for slightly over two-thirds of that sum.

In Japan, a continued boom in small-scale solar power pushed that country's renewable investment total to $36.2 billion, the same as in 2014, the report observed.

Global Trends in Renewable Energy Investment pointed out renewable generation costs continue to fall, particularly in solar power. In the second half of 2015, it said, the global average levelized cost of electricity (LCOE) for crystalline silicon photovoltaics (PV) was $122 per megawatt-hour (MWh), down about 15% from $143 per MWh in the second half of 2014. Some PV projects are going ahead at price points significantly under that, notably a 200-MW project in Dubai being built by ACWA Power International (Riyadh, Saudi Arabia) that was awarded a contract in January 2015 to produce power at just $58.50 per MWh.

The strong growth of investment in renewables comes despite sharply falling prices for fossil fuels like coal and natural gas, the report noted. Despite the gains of renewable energy, the authors are concerned that the policy support for renewables remains fragile and fickle. It noted a less-friendly stance toward renewables taken by the U.K. government last May as well as the U.S. Supreme Court's decision in February 2016 to send the Obama administration's Clean Power Plan back to a federal appeals court for a trial. That trial, originally scheduled to begin this month, has been pushed to September. For more on that issue, see February 16, 2016, article--Unprecedented Stay by Supreme Court Casts Long Shadow Over Clean Power Plan.

In his foreword to the report, U.N. Secretary-General Ban Ki-Moon wrote, "Reducing the risks of climate change requires urgent action now... We have entered a new era of clean energy growth that can fuel a future of opportunity and greater prosperity for every person on the planet. Governments, businesses and investors around the world are realizing the progression to low-emission, climate-resilient growth is inevitable, beneficial and already under way."

He added that the Paris Agreement last December, signed by about 194 nations, "finally provides the policy signals the private sector has asked for to help accelerate the low-carbon transformation of the global economy."

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