Bloomberg: Global renewable energy boom driven by business community
Global investment in low-carbon energy is set to hit $2.6trn by the end of this year, with large corporates driving this trend, new analysis from Bloomberg has concluded.
Published by Bloomberg’s New Energy Finance (BNEF) arm, the analysis’ findings have been compounded by the UN’s Environment Programme (UNEP).
The $2.6trn (£2.1trn) accounts for all money invested in new renewable energy arrays; expanding and updating existing facilities; procuring power; improving infrastructure and in research and development since 2010.
BNEF claims that the majority of this investment has been funnelled into wind and solar power, with global solar generation capacity having increased more than 2,500% during the past decade, from 25GW in January 2010, to 633GW anticipated by January 2020.
In total, the research group states, there’s been a 2.4TW net increase in global clean power generation capacity since 2010.
According to BNEF, a key driver of this investment has been the business community, with privately and publicly owned firms having collectively signed up to purchase 8.6GW of clean energy between January and July 2019 – up from 7.2GW in the same period the year prior. As highlighted in its recent Corporate Energy Outlook, the majority of this energy was procured in North America, where 5.95GW of deals were secured during the six-month period.
However, just 1GW of these deals were signed via green tariffs from regulated utilities, leaving BNEF unsure that the 2018 total of 2.6GW of renewable deals sealed in this way in the US will be met in 2019.
“This may be a result of buyer apprehension, as several companies have been involved in highly publicized legal battles with regulated utilities over clean energy buying,” the research group said.
“Companies are instead favoring the virtual power purchase agreements (PPA) model, which has made up 82% of all US deals in 2019.”
The good news is that, globally, BNEF believes corporates are well on track to surpass their 2018 renewables sourcing record of 13.4GW this year. This figure takes into account PPAs only and does not cover onsite generation.
BNEF, in its latest analysis, puts this trend down to growing demands for businesses to decarbonise – driven by policy, consumers and investors alike – coupled with the falling costs of wind, solar and battery technology. The cost of electricity from solar PV arrays, for example, has fallen by 81% since 2009.
At the same time, many nations are beginning to phase out coal power and to set long-term climate goals which are not compatible with continued fossil fuel use at scale.
BNEF is predicting that this changing business, policy and economic landscape will lead to renewable energy attracting $322bn of annual investment globally through to 2025, compared with $166bn for fossil fuel plants.
Global investment in new renewable energy capacity over this decade is on course to hit $2.6 trillion, with more GW of solar capacity installed than any other generation tech. Solar alone will have grown from 25GW in 2010 to 663GW by the close of 2019. https://t.co/hUgQtAvEeY pic.twitter.com/mA4xyGTGVi
— BloombergNEF (@BloombergNEF) September 10, 2019
“Investing in renewable energy is investing in a sustainable and profitable future, as the last decade of incredible growth in renewables has shown,” UNEP executive director Inger Andersen said.
“It is clear that we need to rapidly step up the pace of the global switch to renewables if we are to meet international climate and development goals.”
Available to watch on-demand: Free Corporate Power Purchase Agreements online masterclass
Energy and sustainability professionals keen to find out more about sourcing renewable energy through Corporate PPAs now have access to a 45-minute masterclass on the topic, on-demand.
Hosted by edit in association with Orsted, the webinar explores what Corporate PPAs are, which oganisations are most suited to adopting them, and the business benefits of doing so.
— WATCH THE 45-MINUTE MASTERCLASS HERE —
© Faversham House Ltd 2023 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.
Please login or Register to leave a comment.