Renewable Energy Investment is Growing

An international policy network called the Renewable Energy Policy Network for the 21st Century, or REN21, has released its global status report for 2010. Made up of representatives of industry, governments, non-governmental organizations, and others, the group promotes the rapid development of renewable energy worldwide.

The 2010 report examines the state of the renewables industry in 2009, and the highlight number reported is that 19% of global final energy consumption now comes from renewable sources. That is a far larger number than many would expect, and the reason is that it includes burning “traditional biomass”, i.e. wood, for cooking and heating. Wood-burning accounts for 13% of the headline number.

Hydropower, both large and small, accounts for another 3.2% of energy consumption. The remaining 2.6% comes from what most of us think of as renewable sources — solar, wind, geothermal, biomass, and biofuels.

While it may be a little difficult to get too worked up over just 2.6%, that number represents substantial growth in the past five years. Utility scale solar PV, for example, has doubled since 2004, and grew by 44% in 2009.

According to the report, major world governments have committed $188 billion to renewable energy and energy efficiency since the global financial crisis in the fall of 2008. By the end of 2009, however, just 9% of those funds had been spent, mostly a result of long lead times to get projects and spending approved. REN21 expects larger expenditures in both 2010 and 2011.

Total investment in renewable assets (excluding large hydropower projects) in the first quarter of 2010 totaled $29.5 billion, up from $26 billion in the 2009 fourth quarter and up from about $18 billion from the first quarter of 2009. Venture capital funding and private equity investment totaled $2.9 billion in the first quarter, up from $1.5 billion in the same period a year ago and up from $1.7 billion sequentially.

The report also notes that 85 countries have set policy targets for renewables, including all 27 members of the European Union. Conspicuous by its absence is the US, although the report points out that 36 states and the District of Columbia have set renewable portfolio standards.

Both the US and Europe added more renewable power capacity in 2009 than they added coal, gas, and nuclear capacity. Globally, 80,000 megawatts of renewable capacity was added, with China adding nearly half the total and nearly three-quarters of the total excluding hydropower additions.

The amount of power generated by renewables is still small, but the growth has been substantial and investment has picked up again. That’s the good news.

Paul Ausick