The clean energy industry has remained remarkably resilient during the economic crisis with $243 billion in new capital invested in the sector in 2010 (a 30% increase on 2009), according to a report recently released by the World Economic Forum in collaboration with research firm Bloomberg New Energy Finance. The report, Green Investing 2011: Reducing the Cost of Financing, explores recent investment trends and examines which national policies most efficient in spurring clean energy deployment.
Using a levelized cost of energy (LCOE) analysis, the report highlights which policies result in appropriate prices being paid for clean energy – and which ones have resulted in significant overpayment.
The Green Investing 2011 report – the third in a series on green investing published by the World Economic Forum – finds that:
- While over $194 billion in government stimulus funding has been pledged to date for the clean energy sector, clean-energy technologies such as solar and onshore wind already compete in some places without subsidies due to continued reduction in costs.
- Policy design is integral to reducing the cost of capital, hence ensuring that clean energy is available at the lowest possible cost. Subsidies remain critical, but must be carefully crafted with taxpayers’ interests in mind to avoid overpaying for clean-energy generation.
- To build long-term consensus on clean energy, policy-makers should ensure that the benefits of lower costs of clean energy are passed on to consumers or taxpayers rather than accruing to the clean energy sector.
“The lesson of countries such as Spain, Germany, Italy and the Czech Republic in recent years is that, where generous policies lead, investment and clean energy deployment will surely follow,” said Michael Liebreich, Chief Executive, Bloomberg New Energy Finance, United Kingdom, and report co-author. “The real question, though, is: how do you spur development without creating a boom-bust cycle and without overpaying? With budget belts around the world tightening, policy-makers owe it to their taxpayers and energy users to find the most efficient ways of supporting the clean-energy industry.”
“We hope this report will provide a framework for decision-makers as they examine strategies to close the $250 billion annual clean energy investment gap,” said report co-author Anuradha Gurung, Associate Director, Investors Industry, World Economic Forum.
The first report, Green Investing: Towards a Clean Energy Infrastructure, published in 2009. Green Investing 2010: Policy Mechanisms to Bridge the Financing Gap focused on the range of policy tools that might help spur large-scale investments into clean energy.
Download the report from: www.weforum.org/reports/green-investing-2011
World Economic Forum