The Executive Summary is from the report, Global trends in renewable-energy investment 2015, authored by the Frankfurt School – UNEP Collaborating Centre for Climate & Sustainable Energy Finance. The Summary examines a few key elements in the rebound in global renewable energy investment in 2014, and then the continuing challenges, the role of clean power in the climate issue, and the trends in costs of generation.
Investments rallied strongly after two years of decline. Renewables, excluding large hydropower reached 100 GW of installations for the first time ever, and developing countries led by China came within just a few billion dollars of overtaking investment in developed economies. In addition, there were record statistics for financings solar in China and Japan and offshore wind in Europe.
It is also the case that the recent period has seen the competitive environment for renewables become even more exacting. The near-50% plunge in crude oil prices between June 2014 and March 2015 will have a direct effect on renewable energy in a few places, such as developing countries burning oil for power and biofuel markets not covered by mandates. More significant may be the indirect effect, from downward pressure on gas prices. That will lower the cost of gas-fired generation, a competitor of wind and solar in many countries.
So far, renewables have been up to the challenge. For instance, January this year is seeing a project in Dubai setting a clear, new record for the lowest price ever agreed for electricity from a solar photovoltaic plant. Further cuts in the cost of generation for both solar and wind look to be on the cards in 2015.
The top headline for renewable energy in 2014 was that investment rebounded by 17% to $270.2 billion. This was the first annual increase in dollar commitments to renewables excluding large hydro for three years, and brought the total up to just 3% below the all-time record of $278.8 billion set in 2011.
The 2014 performance by renewable energy investment was arguably more impressive than that in 2011 anyway – because capital costs in wind, and particularly in solar PV, fell sharply in the intervening three years, so each billion dollars committed added up to many more MW of capacity than it did in the earlier year. Some 103 GW of renewable power capacity (excluding large hydro) is estimated to have been built in 2014, compared to 86 GW in 2013 and 80.5 GW back in 2011. The 2014 total was dominated by wind and PV, with 49 GW and 46 GW respectively, both record figures.
Frankfurt School– Unep Centre
http://www.fs-unep-centre.org
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