UK's struggle and Mexico's rise: Seven surprising stats about global clean energy investment
A new report from UN Environment and Bloomberg New Energy Finance has outlined the global trends of renewable energy investment, which grew by 2% last year. edie dives through the data to bring seven surprising statistics.
According to the Global Trends in Renewable Energy Investment 2018 report, published by UN Environment, the Frankfurt School-UNEP Collaborating Centre, and Bloomberg New Energy Finance (BNEF), global renewable energy investment is up 2% compared to 2016.
While this is actually a 13% decrease on the record levels set in 2015, it serves to highlight that the costs of renewable technologies – such as solar, wind and biomass, but excluding large-scale hydro projects – are falling and becoming cost competitive with fossil fuels.
In fact, last year was the eighth year running in which global investment in renewables exceeded $200bn, reaching $279.8bn. Since 2004, the world has invested $2.9trn in these energy sources, despite falling installation and development costs. This year’s report was largely driven by a surge in solar installations and investments.
“The extraordinary surge in solar investment, around the world, shows how much can be achieved when we commit to growth without harming the environment,” UN Environment’s head Erik Solheim said.
But while the headline figures make for interesting reading, the report is filled with interesting statistics and trends that show how the world of renewables is evolving, including a warning sign for the UK. Here, edie brings you seven surprising statistics that shaped investment into renewables in 2017. Enjoy.
Developing countries take the lion’s share
Renewable energy is no longer exclusive to the rich and developed nations. Last year, developing economies accounted for 63% of global investment into renewables, up 54% compared to the previous year.
This record market share highlights how declining costs have opened up new markets for investment. Emerging economies pumped $117.1bn into the sector last year, less than a billion dollars short of the record levels set in 2015, and up 20% from 2016. On the other hand, investment from developed economies fell by 18% to $102bn – the lowest figure since 2006.
According to the report, if the record investment figure for developed economies, of $197bn in 2011, was repeated last year by developing nations, it would have bought “a lot more gigawatts of renewables capacity” than it did at the time.
UK decline felt across Europe
As mentioned, investment from developed economies slipped to their lowest levels in more than a decade. Europe’s investment total, for example, fell by more than a third to $40.9bn. Europe’s global market share now sits at 15% - the lowest recorded figure since the report series began in 2004.
In 2011, Europe accounted for just under half of the global total in investment. According to the report, the biggest reason for the decline was a fall in investment of 65% in the UK, “reflecting an end to subsidies for onshore wind and utility-scale solar, and a big gap between auctions for offshore wind projects”.
China leads, again
As is often the case with global outlooks focused on renewables, China continues to set the pace. Overall, China was “by far” the world’s largest investor in 2017, pumping a record $126.6bn into green energy, which is a 31% increase on 2016.
China is the world’s biggest emitter of greenhouse gases, but renewables investment is reaping economic gains as well as lowering emissions. The nation’s One Belt One Road system, which uses ancient trade routes to accelerate infrastructure investments has helped to export more than $8bn of solar technology from the nation.
The US has announced a 30% tariff on these Chinese imports, but renewable investment in the nation is down 6% compared to 2016, to just $40.5bn. Overall, China, India and Brazil allocated $143.6bn to renewables, their highest total ever, and up 24% on 2016.
Solar the only energy on the up
Across the renewables spectrum, solar was the only technology which saw investment figures increase. Investment in new solar installations reached more than $153bn, an 18% increase on 2016.
According to the report, this was split between asset finance of utility-scale projects, up 20% at $104bn, and funding of small-scale systems, 15% higher at $49bn. Investment into solar is still attractive as many nations are incentivising investment through subsidies. In areas where the subsidies have been cut, such as the UK, the sector is ready to compete without policy support.
In contrast, new wind capacity fell 12% year-on-year, reaching $104bn. Other sectors covered in the report are also much smaller regarding new capacity investment. Biomass and waste-to-energy, for example, suffered a 352% decrease in investment (page 14), benefitting from just $3bn.
Costs decline but output grows
While the majority of sectors suffered from a decrease in investments, outputs from the technologies are reaching record levels. The total $279.8bn invested in renewables – excluding large hydro – saw a record 157GW of renewable power commissioned in 2017. This is a 14GW increase from 2016 and “far outstrips” the 70GW of fossil fuel power added over the same period, once adjusted for the closure of some existing plants.
Despite declines in investment, including the aforementioned 52% fall from biomass and waste-to-energy, the proportion of world electricity generated by wind, solar, biomass and waste-to-energy, geothermal, marine and small hydro rose from 11% in 2016 to 12.1% in 2017.
The world installed a record 98 gigawatts of new solar capacity, far more than the net additions of any other technology, however. According to the report, the increased output of renewables led to approximately 1.8 gigatonnes of carbon dioxide emissions being avoided, as the world looks to accelerate progress towards the Paris Agreement.
Mexico’s investment up 810%
Last year, the UK restored its position as one of the top 10 countries for renewable energy investment, although concerns remain about the impact that Brexit will have on future investments.
Despite the 65% decline in investment, the UK is still present in this top 10 list, and has been joined by Mexico and Sweden. Sweden, for example, saw investment into renewables increase by 127% to $3.7bn, just short of the 147% increase recorded in Australia, as investment levels reached $8.5bn.
However, all entries in the top 10 are dwarfed by Mexico. Then nation ploughed $6bn into renewable capacity in 2017, a staggering increase of 810% compared to 2016. Just outside the top 10, investment in Egypt leapt nearly six-fold to $2.6bn, while that of the United Arab Emirates increased 29-fold to $2.2bn.
Levelised costs reach record lows
Between 2009 and 2017, the benchmark levelised cost of electricity (LCOE) for solar fell from $304 per megawatt-hour to just $86, a reduction of 72%. For onshore, LCOE dropped from $93 to $67 per MWh, a reduction of 27%.
Offshore wind was one of the few areas to suffer, as project developers increasingly looked to move to deeper water, which originally increased the cost trend. However, since a peak in 2012, LCOE has declined 44% to $124 per MWh in this sector.
The LCOE reductions for solar, onshore wind and offshore wind have boosted the competitiveness of these sources against established technologies such as coal and gas.