Record-breaking 2014 for global renewables growth

And despite tumbling technology prices, total investment in renewable energy rebounded after a two-year decline to reach $270bn in 2014: a year-on-year growth of 17%.

The upswing was driven major by solar installations in China and Japan and record investments in offshore wind projects in Europe and the UK in particular.

The figures come from UNEP’s ninth annual Global Trends in Renewable Energy Investments report, written in partnership with Bloomberg New Energy Finance.

“Once again in 2014, renewables made up nearly half of the net power capacity added worldwide”, said Achim Steiner, UN Under-Secretary-General and UNEP executive director.

“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.”

Leading lights

In total 9.1% of the world’s electricity came from renewable sources last year, up from 8.5% in 2013.

The market was once again dominated by wind and solar, as the two technologies accounted for 92% of overall investment in renewable power and fuels. A record 49GW of wind capacity and 46GW of solar PV capacity were added worldwide.

Asian economic giants China and Japan accounted for around half of global investment in solar, while in Europe, seven $1bn-plus offshore wind projects were confirmed.

But..

Not all technologies shared in the growth however, as investment in biofuels fell 8%, biomass and waste-to-energy dropped 10% and small hydro was down 17%.

Likewise, the report said multiple challenges remain, in the form of “policy uncertainty, structural issues in the electricity system – even in the very nature of wind and solar generation, with their dependence on breeze and sunlight”.

Uncertain future

Of even greater concern is an “erosion of investor confidence” thanks to increasing uncertainty around Government policies.

“Europe was the first mover in clean energy, but it is still in a process of restructuring those early support mechanisms,” said Michael Liebreich, chairman of the Advisory Board for Bloomberg New Energy Finance.

“In the UK and Germany we are seeing a move away from feed-in tariffs and green certificates, towards reverse auctions and subsidy caps, aimed at capping the cost of the transition for consumers.

“Southern Europe is still almost a no-go area for investors because of retroactive policy changes, most recently those affecting solar farms in Italy. In the US there is uncertainty over the future of the Production Tax Credit for wind, but costs are now so low that the sector is more insulated than in the past. Meanwhile the rooftop solar sector is becoming unstoppable.”

Brad Allen