Biomass Global new investment in energy-smart tech:asset class (unep.org)

Published on March 31st, 2015 | by Sandy Dechert

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UNEP: Green Investment Up 17%, 103 GW Added In 2014

March 31st, 2015 by  

This morning the United Nations Environment Program released its 9th annual report on Global Trends in Renewable Energy Investment. The news is very good: 2014 was the best year ever for newly installed renewable capacity. The Frankfurt School–UNEP Collaborating Centre and Bloomberg New Energy Finance prepared the report.

In spite of the 50+% collapse in oil prices toward the end of last year, global investments in renewable energy scored big, with a 17% increase from 2013. (Largely due to lower cleantech prices resulting from economies of scale, the numbers had previously declined for two years.) Global 2014 investments reached $270 billion, 17% up from the 2013 total of $232 billion and only 3% below the 2011 all-time record ($279 billion).

Unprecedented solar expansion in China (mostly utility-scale projects over 1 MW) and Japan (smaller-scale projects) — comprising around half the world total — and strongest-ever investments in European offshore wind propelled the surge. In fact, solar and wind accounted for over 90% of all investment.

  • Global new investment:growth by sector (unep.org)Solar rose by a whopping 25% to $149.6 billion, its second-highest year ever, adding a record 46 GW of capacity.
  • Wind rose by 11% to a record $99.5 billion, adding 49 GW, another record.
  • Geothermal investments also rose, having a 27% increase to $2.7 billion. Biofuels, biomass, waste-to-energy, and small hydro all dropped somewhat.

Measured in terms of more conventional power, the record 103 GW of added renewable capacity equals approximately the same output capacity as all 158 nuclear power plant reactors in the United States. The figure compares to 86 GW in 2013, 89 GW in 2012, and 81 GW in 2011.

Global new investment in renewables (unep.org)

In terms of world energy generation, solar, wind, biomass and waste-to-power, geothermal, small hydro, and marine power made up an estimated 9.1% of world electricity generation, over half a percentage point up from 2013. Increasing equivalent fossil sources would have released about 1.3 gigatonnes of CO2 — or about twice the emissions of the world’s airline industry.

Says Achim Steiner, the UN’s Under-Secretary-General and UNEP Executive Director:

“Once again in 2014, renewables made up nearly half of the net power capacity added worldwide…. The growing penetration of renewable generation in the world’s developing economies is one of the important and encouraging aspects of the 2014 report.” 

Renewables expanded rapidly into new markets in developing countries, where investments jumped 36% to $131.3 billion. China ($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. In Indonesia, Chile, Mexico, Kenya, and Turkey, more than $1 billion each was invested. The total renewables investment in developed economies rose only slightly, by 3%, to $138.9 billion.

Viewing the results in terms of national totals, we see the Chinese investments last year being the highest: a record $83.3 billion, up 39% from 2013. The US made slightly less than half that amount, $36.3 billion. At $35.7 billion, Japan made its biggest total ever, 10% higher than in 2013. The latter statistic is especially important, considering that more Japanese problems with nuclear have surfaced during the past week.

Renewable vs. fossil investment (unep.org)Oil price impacts are only likely to influence areas like solar in oil-exporting countries and biofuels. It’s interesting to compare the trajectories for fossil fuel investment and for renewable over the past few years.

The report’s authors do see challenges remaining from policy uncertainty and structural issues in the electricity system as grids and utilities adjust to more wind and solar in the generation mix. However, investor confidence may sag if uncertainty arises about government support policies for renewables.

Says Michael Liebreich, Chairman of the Advisory Board for Bloomberg New Energy Finance:

Policies in place to aid off-grid development (unep.org)Europe was the first mover in clean energy, but it is still in a process of restructuring those early support mechanisms. 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 to 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.

The UNEP report cautions that major electricity market reforms like Germany’s Energiewende may be needed elsewhere if these positive steps for renewable energy continue. Nothing succeeds like success.

Other highlights of the 2014 UNEP report include these notes on financial investment mechanisms:

Although asset finance of utility-scale renewable energy projects went up 10% to $170.7 billion, the increase for small-scale projects of less than 1MW was even bigger at 34%, to $73.5 billion. Recent sharp reductions in solar system costs are making rooftop solar a more competitive option for businesses and households looking to generate part of their own power needs. The US, Japan and China had the biggest increases in small-scale project investment.

Global new investment in energy-smart tech:asset class (unep.org)

Among other investment categories, equity raising by renewable energy companies on public markets jumped 43% in 2014 to $15.1 billion, helped by the recovery in sector share prices between mid-2012 and March 2014, and by the popularity with investors of US ‘yieldcos’ and their European equivalents, quoted project funds.

Venture capital and private equity investment in renewable energy rallied to $2.8 billion last year, up 27% on 2013’s depressed figure, but still little more than a quarter of the record established in 2008. R&D spending on renewables edged up 2% to $11.7 billion, with corporate entities accounting for $6.6 billion and governments $5.1 billion.


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About the Author

covers environmental, health, renewable and conventional energy, and climate change news. She's currently on the climate beat for Important Media, having attended last year's COP20 in Lima Peru. Sandy has also worked for groundbreaking environmental consultants and a Fortune 100 health care firm. She writes for several weblogs and attributes her modest success to an "indelible habit of poking around to satisfy my own curiosity."



  • Donald Zenga

    Solar installation of 46 GW is impressive, article just mentioned Solar and not Solar PV, so could this include Solar Thermal for power and water heating. In fact the solar water thermal has much bigger volume than Solar PV.

    BTW, “103 GW of added renewable capacity equals approximately the same output capacity as all 158 nuclear power plant reactors” is absolutely wrong”. Renewables operate at various capacity factors between 20 – 90 %, while nuclear runs at between 80 – 90%.

    • Aku Ankka

      I think it includes CSP (maybe 2GW last year?) as baseline PV was about 38GW (as per http://en.wikipedia.org/wiki/Growth_of_photovoltaics).

      And yes, that apples-to-oranges between nameplate capacities is frustrating. Very misleading. Wish they did even token effort to estimate anticipated production.

  • JamesWimberley

    it’s amusing to compare the disparate numbers for global pv installations in 2014, now 3 months old:
    UNEP: 46 GW,
    IHS: 44.2 GW (link)
    IEA: 38.7 GW (link)
    That’s a 19% range – not in predictions, but for measurements of the past.

    The statistical problem will get worse, as more and less developed countries join the party. It’s not colonialist to recognize that German statistics are much more reliable than Mexican or Indian (or for that matter American), and the growth is shifting to such countries. Even the tidy Netherlands don’t know how much solar they have, through some privacy hangup. When the wave reaches Somalia, the statisticians have lost. Warlords don’t care.

    The IEA’s low number is probably because they are trying to count installations directly, rather than counting shipments by manufacturers.

    • Will E

      Its because IEA is always wrong.
      but you r right, there will be too much Solar to
      count.

    • Ronald Brakels

      It will be hard to keep track of how much PV is out there, but fortunately we have a couple of ways to keep track. Firstly we have a decent idea of the total amount of PV that has been produced and so that creates an upper limit, and secondly we can take a random sample of satellite images of countries and check just how much PV is actually there on roofs and fields. By looking at photos from different years we can get a rough idea of the likely efficiency of the installed capacity.

      • nakedChimp

        And then you can track exports/imports of FF and the revenue from FF extraction/transport companies and related businesses..

        • Ronald Brakels

          True, but I can look at a little widget that shows me that right now Victoria is generating just over 5 gigawatts from brown coal at the moment, and I suspect the world will be a widgettier place in the future which will make monitoring such things easier.

          • jeffhre

            As the price of chips moves downward and the volume of panels/inverters moves up, it will become dirt cheap to monitor production.

      • Ronald Brakels

        Once building integrated solar takes off it might be harder to spot on satellite photographs, but it will emit less infrared than roofs of similar albedo, so it could still be checked up on.

  • Will E

    What about the sag of investors for low FF prices.
    a volatile game.
    investors dont want that.
    Renewable is predictable, long term investment.
    contract now, 30 years reliable ROI.

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