Global Trends in Green Energy 2009: New Power Capacity from Renewable Sources Tops Fossil Fuels Again in US, Europe

REN21 yesterday released its annual publication, the Renewables 2010 Global Status Report, together with its twin report – UNEP’s annual Global Trends in Sustainable Energy Investment 2010. In 2009, for the second year in a row, both the US and Europe added more power capacity from renewable sources such as wind and solar than conventional sources like coal, gas and nuclear, according to these reports.

Renewables accounted for 60 per cent of newly installed capacity in Europe and more than 50 per cent in the USA in 2009. This year or next, experts predict, the world as a whole will add more capacity to the electricity supply from renewable than non-renewable sources.

The reports detail trends in the global green energy sector, including which sources attracted the greatest attention from investors and governments in different world regions.

By the numbers:
In 2009 renewable sources represented:

  • 25 per cent of global power (electricity) capacity (1,230 gigawatts (GW) out of 4,800 GW total all sources, including coal, gas, nuclear)
  • 18 per cent of global power production
  • 60 per cent of newly installed power capacity in Europe and more than 50 per cent in the US; the world as a whole should reach 50 per cent or more in newly-installed power capacity from renewables in 2010 or 2011

The major highlights of the reports (you can download the full version for free at http://www.ren21.net/globalstatusreport/g2010.asp):

  • For the first time, private sector green energy investments in Asia and Oceania, some $40.8 billion in 2009, exceeded that in the Americas, at $32.3 billion.
  • Private sector investment in Europe was down 10 percent at $43.7 billion.
  • Major economies in 2009 began to spend some of the estimated $188 billion in global “green stimulus” programs announced in September 2008. However, at the end of 2009, only 9 percent of the money had been spent, with larger proportions expected to flow in 2010 and 2011.
  • After a weak first quarter attributed to the banking crisis, sustainable energy investments rebounded in the final three quarters of last year. The new investment total of $162 billion in 2009 represented the second highest annual figure ever (after 2008) — nearly quadruple the sum invested in 2004.
  • New investment of $162 billion has added an estimated 50 gigawatts (GW) of renewable energy generation capacity worldwide (not including hydro-electric). This represents a sharp rise from the 40GW added in 2008. Fifty GW is roughly the output of 75 coal-fired power plants.

Looking forward …:

  • The green power sector survived the economic downturn better than many expected, with share prices rising almost 40% in 2009, reversing roughly one third of losses experienced in 2008.
  • Clean energy share prices under-performed wider stock markets by around 10 percent in the first four months of 2010. Although oil prices were buoyant, prices of electricity and natural gas stayed low, cramping returns for project developers.
  • Nevertheless, new clean energy investments in the first quarter of 2010 (often the most subdued quarter of the year) were up more than 50 percent on the same three months of 2009.

Let’s have a look on the sectors:

From 2005 to 2009 inclusive, the annual average rate of growth in wind power capacity was 27 percent; solar hot water 21 percent rate; ethanol production 20 percent and biodiesel production 51 percent. The use of biomass and geothermal for power and heat also grew strongly.

Wind EnergyWind:

  • Wind was even more dominant as a destination for investment in 2009 than 2008.
  • In 2008, it accounted for $59 billion or 45 percent of all financial investment in sustainable energy; in 2009, it accounted for $67 billion and its share rose to 56 percent.
  • Wind power additions reached a record high of 38 GW, 13.8 GW of which was installed in China, 10 GW in the US, and 2.5 GW in Spain.
  • Wind power existed in just a handful of countries in the 1990s, but now exists in over 82 countries.

photovoltaic.gifSolar:

  • Total global investment in solar PV reached a record $40 billion in 2009.
  • Grid-connected solar power has grown by an average of 60 percent every year for the past decade, from 0.2 GW at the start of 2000 to 21 GW at the end of 2009.
  • The year 2009 was very different for large-scale (utility-scale) solar however, suffering a 27 percent fall in financial investment in the year, to $24 billion.
  • The sharp decline links to several factors, including falling prices, a sudden over-supply of photo-voltaic products, new caution on the part of investors towards equity in young solar companies, a shortage of bank financing for projects in Europe and North America and a temporary freeze on permits for new capacity in Spain, the most active solar market in 2008.
  • Solar PV additions nevertheless reached a record high of 7 GW in 2009. Germany was the top market, with 3.8 GW added, or more than half the global market. Other large markets were Italy, Japan, the United States, the Czech Republic, and Belgium. Spain, the world leader in 2008, saw installations plunge to a low level in 2009 after a policy cap was exceeded.
  • In 2009, China produced 40 percent of the world’s solar PV supply, 25 percent of the world’s wind turbines (up from 10 percent in 2007), and 77 percent of the world’s solar hot water collectors.
  • Power produced by solar PV dropped in price some 50 to 60 percent by some estimates — from highs of $3.50 per watt in mid-2008, to lows approaching $2 per watt.
  • An estimated 70 million households worldwide now employ solar hot water heating.

flowers.gifBio fuels:

  • Biofuels, which ranked third after wind and solar in 2008 with $18 billion of financial investment, ended up fourth last year with just $7 billion. Biomass and waste-to-energy, which was fourth in 2008 with $9 billion, moved up to third in 2009 with $11 billion.
  • Biofuels displaced the energy equivalent of 8 percent of global gasoline consumption.
  • Latin America is seeing many new biofuels producers in countries like Argentina, Brazil, Colombia, Ecuador, and Peru, as well as expansion in many other renewable technologies.
  • Investment in new biofuels plants also declined from 2008 rates, as corn ethanol production capacity was not fully utilized in the United States and several firms went bankrupt. The Brazilian sugar ethanol industry likewise faced economic troubles, with no growth despite ongoing expansion plans. Europe faced similar softening in biodiesel, with production capacity only half utilized.

Geothermal:
Geothermal suffered a 29 percent drop in financial investment in 2009, to $2 billion.

Energy Efficiency:
Energy-smart technologies such as power storage and efficiency saw a 34 percent rise in investment, to $4 billion. For the first time, energy-smart technologies attracted more venture capital and private equity investment than any other clean energy sector.

To finish this post, I wanted to add some interesting statements regarding this reports:

Mr. Steiner, UNEP’s Executive Director said: “The sustainable energy investment story of 2009 was one of resilience, frustration and determination. Resilience to the financial downturn that was hitting all sectors of the global economy and frustration that, while the UN climate convention meeting in Copenhagen was not the big breakdown that might have occurred, neither was it the big breakthrough so many had hoped for. Yet there was determination on the part of many industry actors and governments, especially in rapidly developing economies, to transform the financial and economic crisis into an opportunity for greener growth.”

There remains however a serious gap between the ambition and the science in terms of where the world needs to be in 2020 to avoid dangerous climate change. But what this five years of research underlines is that this gap is not unbridgeable. Indeed, renewable energy is consistently and persistently bucking the trends and can play its part in realizing a low carbon, resource efficient Green Economy if government policy sends ever harder market signals to investors” he added.

Mr El-Ashry, Chair of REN21 said: “Favorable policies now in place in more than 100 countries have played a critical role in the strength of global renewable energy investments recently. For the upward trend of renewable energy growth to continue, policy efforts now need to be taken to the next level and encourage a massive scale up of renewable tech nologies.

Michael Liebreich, chief executive of Bloomberg New Energy Finance stated: “The relatively resilient performance of the sector during the current economic downturn shows that clean energy was not a bubble created by the late stages of the credit boom, but is instead an investment theme that will remain important for the years ahead.

For the first time, private sector green energy investments in Asia and Oceania, some $40.8 billion in 2009, exceeded that in the Americas, at $32.3 billion.
Private sector investment in Europe was down 10 percent at $43.7 billion.
Major economies in 2009 began to spend some of the estimated $188 billion in global “green stimulus” programs announced in September 2008. However, at the end of 2009, only 9 percent of the money had been spent, with larger proportions expected to flow in 2010 and 2011.
After a weak first quarter attributed to the banking crisis, sustainable energy investments rebounded in the final three quarters of last year. The new investment total of $162 billion in 2009 represented the second highest annual figure ever (after 2008)
nearly quadruple the sum invested in 2004.
New investment of $162 billion has added an estimated 50 gigawatts (GW) of renewable energy generation capacity worldwide (not including hydro-electric). This represents a sharp rise from the 40GW added in 2008. Fifty GW is roughly the output of 75 coal-fired power plants.

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