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Renewable energy investment in 2018 hit USD 288.9 billion

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Global investment in renewable energy hit USD 288.9 billion in 2018, with the amount spent on new capacity far exceeding the financial backing for new fossil fuel power, according to new figures published today.

These numbers, produced by BloombergNEF (BNEF), are being published today as part of REN21’s Renewables 2019 Global Status Report.

The numbers show that while investment was 11 per cent down over the previous year, 2018 was the ninth successive year in which it exceeded USD 200 billion and the fifth successive year above USD 250 billion. The figure does not include hydropower above 50MW, which saw an additional USD 16 billion invested – also down on 2017, when USD 40 billion was invested.

The dip in investment in 2018 can be partly attributed to falling technology costs in solar photovoltaics, which meant that the required capacity could be secured at a lower cost, and a slowdown in solar power deployment in China.

However, globally, solar was still the largest focus of investment, with USD 139.7 billion in 2018, down 22 per cent. Wind power investment increased two per cent in 2018, to USD 134.1 billion. The other sectors lagged far behind, although investment in biomass and waste-to-energy increased 54 per cent, to USD 8.7 billion.

The figures compare the amount invested in new renewable power capacity, which was USD 272.3 billion  globally in 2018 (excluding large hydro), with that in new coal- and gas-fired generating capacity, which was USD 95 billion.

China leads, Europe and developing countries rally

A geographical breakdown of the USD 288.9 billion figure for total renewable energy investment in 2018 shows that China led investment worldwide for the seventh successive year, at USD 91.2 billion. However, this was down 37 per cent from 2017’s record number, due to a number of factors including a mid-year change in the government’s feed-in tariff policy, which hit investment in solar power.

China also accounted for 32 per cent of the global total investment, followed by Europe at 21 per cent, the United States at 17 per cent, and Asia-Oceania (excluding China and India) at 15 per cent. Smaller shares were seen in India at 5 per cent, the Middle East and Africa at 5 per cent, the Americas (excluding Brazil and the United States) at 3 per cent and Brazil at 1 per cent.

If China is excluded, renewable energy investment in the developing world actually increased 6 per cent to USD 61.6 billion, a record high.

“When overall investment falls, it is easy to think we are moving backwards, but that is not the case,” Angus McCrone, Chief Editor at BloombergNEF, commented: “Renewable energy is getting less expensive and we are seeing a broadening of investment activity in wind and solar to more countries in Asia, Eastern Europe, and the Middle East and Africa.”

Investment in Europe jumped 39 per cent to USD 61.2 billion, the highest level in two years, driven largely by large on- and off-shore wind investments.

In the United States, investment edged up 1 per cent to USD 48.5 billion, the highest level since 2011, also driven by an increase in wind power financing.

Investment in the Asia-Pacific region (excluding China and India) increased 6 per cent to USD 44.2 billion, the highest level in three years, while the Middle East and Africa saw investment leap 57 per cent to a record USD 15.4 billion. However, in the Americas (excluding Brazil and the United States), investment declined 23 per cent (excluding large hydropower) to USD 9.8 billion. 

“It is reassuring to see investment growing in the US,” said Prof. Dr. Nils Stieglitz, President of Frankfurt School of Finance & Management, involved in the report, “Ironically, this renewables investment growth may in part be driven by projects rushing to qualify for the current tax-support scheme, which is due to expire in only a few years as chances for extension are currently quite low.”

A wealth of more detailed information on global investment in the financing of renewables in 2018 will be shared in the Global Trends in Renewable Energy Investment report, to be released in September ahead of the Global Climate Action summit of the UN Secretary-General. That report has been published every year since 2007. this year’s edition is co-funded by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. It will feature a look back on a decade of renewable energy investment.

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Reaching energy and climate goals demands a dramatic scaling up of clean energy technologies

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A major effort to develop and deploy clean energy technologies worldwide is urgently needed to meet international energy and climate goals, particularly in order to reduce carbon emissions from areas beyond the power sector such as transport, buildings and industry, according to a new IEA report released today.

With global carbon emissions at unacceptably high levels, structural changes to the energy system are required to achieve the rapid and lasting decline in emissions called for by the world’s shared climate targets. The IEA’s Energy Technology Perspectives 2020 – the first core ETP report for three years following a revamp of the series – analyses more than 800 different technology options to assess what would need to happen to reach net-zero emissions by 2070 while ensuring a resilient and secure energy system.

It finds that transitioning just the power sector to clean energy would get the world only one-third of the way to net-zero emissions. Completing the journey will require devoting far more attention to the transport, industry and buildings sectors, which today account for about 55% of CO2 emissions from the energy system. Much greater use of electricity in these sectors – for powering electric vehicles, recycling metals, heating buildings and many other tasks – can make the single largest contribution to reaching net-zero emissions, according to the report, although many more technologies will be needed.

“Despite the difficulties caused by the Covid-19 crisis, several recent developments give us grounds for increasing optimism about the world’s ability to accelerate clean energy transitions and reach its energy and climate goals. Still, major issues remain. This new IEA report not only shows the scale of the challenge but also offers vital guidance for overcoming it,” said Dr Fatih Birol, the IEA’s Executive Director.

“Solar is leading renewables to new heights in markets across the globe, ultralow interest rates can help finance a growing number of clean energy projects, more governments and companies are throwing their weight behind these critical technologies, and all-important energy innovation may be about to take off,” Dr Birol said. “However, we need even more countries and businesses to get on board, we need to redouble efforts to bring energy access to all those who currently lack it, and we need to tackle emissions from the vast amounts of existing energy infrastructure in use worldwide that threaten to put our shared goals out of reach.”

Energy Technology Perspectives 2020 (ETP 2020) examines how to address the challenge of long-lasting energy assets already operating around the world – including inefficient coal power plants, steel mills and cement kilns, most of which were recently built in emerging Asian economies and could operate for decades to come. It finds that the power sector and heavy industry sectors together account for about 60% of emissions today from existing energy infrastructure. That share climbs to nearly 100% in 2050 if no action is taken to manage the existing assets’ emissions, underscoring the need for the rapid development of technologies such as hydrogen and carbon capture.

Ensuring that new clean energy technologies are available in time for key investment decisions will be critical. In heavy industries, for example, strategically timed investments could help avoid around 40% of cumulative emissions from existing infrastructure in these sectors. Accelerated innovation is crucial for this – and for scaling up the clean energy technologies needed across the energy system.

Hydrogen is expected to play a large and varied role in helping the world reach net-zero emissions by forming a bridge between the power sector and industries where the direct use of electricity would be challenging, such as steel and shipping. In the IEA’s Sustainable Development Scenario – a pathway for reaching international energy and climate goals – the global capacity of electrolysers, which produce hydrogen from water and electricity, expands to 3 300 gigawatts in 2070, from 0.2 gigawatts today. In 2070, these electrolysers consume twice the amount of electricity that China generates today. Carbon capture is also employed across a range of sectors in the Sustainable Development Scenario, including the production of synthetic fuels and some low-carbon hydrogen. And modern bioenergy directly replaces fossil fuels in areas like transport and offsets emissions indirectly through its combined use with carbon capture.

The blistering pace of technological transformation that would be necessary for the world to reach net-zero emissions by 2050 is explored in the report’s Faster Innovation Case. It finds that to meet the huge increase in demand for electricity, additions of renewable power capacity would need to average around four times the current annual record, which was reached in 2019.

Governments need to play an outsized role in accelerating clean energy transitions towards meeting international goals, according to ETP 2020. The report highlights core areas that policy makers need to make sure they address. And it notes that economic stimulus measures in response to the Covid-19 crisis offer a key opportunity to take urgent action that could boost the economy while supporting clean energy and climate goals.

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CSOs to ADB: End dirty energy legacy, ban coal

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Days before the Asian Development Bank’s (ADB) Annual Governors Meeting, civil society groups challenged the bank anew to jumpstart Asia’s energy transition by decarbonizing its energy investment portfolio.

The call was made in a webinar and publication launch on Friday, where the groups said “Leaving behind ADB’s Dirty Energy Legacy” must begin with a formal ban on coal investments.

“Thanks to the lenient Energy Policy it adopted in 2009, ADB is guilty of having shaped Asia’s energy sector into its carbon-intensive state today. No amount of renewable energy investments could cover up the bank’s role in advancing the myth of clean coal and the fact that half of the total installed capacity of power generation projects it funded the past decade is from fossil fuels,” said Gerry Arances, Executive Director of the Center for Energy, Ecology, and Development (CEED).

Arances said that with the worsening climate crisis, deteriorating air quality, increasing viability of renewable energy, and environmental and economic imperatives highlighted by the COVID-19 pandemic on the need for a green recovery, the imperative to decarbonize is clear.

“The critical reflections we from civil society offer today mirror what the bank’s Independent Evaluation Department reported: that ADB needs a new energy policy that accurately responds to the region’s needs. In doing so it must live up to its role in global energy transformation, which it can begin by completely leaving coal in its dirty past,” Arances said.

Prior to its release today, the publication has been used by CEED and NGO Forum on ADB, a network of over 250 civil society organisations across Asia, in engaging the bank’s energy decision-makers towards a full transition away from coal and other fossil fuels.

“The Taal volcano eruption, Australian forest fires, floods in Pakistan and Bangladesh, and the typhoons in the USA all struck within a span of 7 months amid COVID-19. If there ever was a time to be climate responsible for ADB, it is now,” said Rayyan Hassan, Executive Director of NGO Forum on ADB.

Forum representatives Vidya Dinker of Growth Watch in India, Hasan Mehedi of Coastal Livelihood and Environmental Action Network (CLEAN) in Bangladesh, and Richard Kahulugan of the Philippine Movement for Climate Justice were present in the webinar to express a unified call for an end to ADB’s advancement of dirty energy in their countries.

“The ADB IED Evaluation on ADB’s Energy Policy recommends ending coal power for Asia-Pacific. We as NGO Forum on ADB demand that the ADB Board of Directors and ADB Senior Management take heed of this recommendation and act swiftly towards an immediate end on all coal and coal-related power and forge towards a just transition to limit global temperature rise to the Paris goal of 1.5°C. ADB must end coal, and end it now. We are out of time,” said Hassan.

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India urged to lead global push for clean energy, climate action

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India has a crucial role to play in promoting clean energy and climate action as the world looks to recover from the COVID-19 pandemic, UN Secretary-General António Guterres said on Friday. 

Delivering the 19th Darbari Seth Memorial Lecture, the UN chief called on India to take the lead in transforming global economic, energy and health systems to save lives, create inclusive economies and avert the threat of climate change.

“India can become a true global superpower in the fight against climate change, if it speeds up its shift from fossil fuels to renewable energy,” he stated.

With the pandemic putting sustainable development at risk, exposing vulnerabilities that will worsen with climate change, the Secretary-General outlined how switching to clean energy could benefit millions worldwide.

“Investments in renewable energy, clean transport and energy efficiency during the recovery from the pandemic could extend electricity access to 270 million people worldwide – fully a third of the people that currently lack it,” he said.

Furthermore, “these same investments could help create nine million jobs annually over the next three years”, he added.

End fossil fuel subsidies

Mr. Guterres highlighted India’s progress in the renewable energy sector. 

The number of workers has risen five-fold since 2015, while last year, spending on solar energy eclipsed coal-fired power generation for the first time. 

Despite significant challenges, the South Asian giant has embraced the technology that will power a sustainable future, and is a pioneer in areas such as clean cooking. 

However, the UN chief noted that subsidies for fossil fuels, such as coal, are still roughly seven times higher  than subsidies  for clean energy. The situation is the same in many other parts of the world, something he found “deeply troubling”.   

“I have asked all G20 countries, including India, to invest in a clean, green transition as they recover from the COVID-19 pandemic,” he said. “This means ending fossil fuel subsidies, placing a price on carbon pollution and committing to no new coal power plants after 2020.”  

‘Up in smoke’ 

Fossil fuels, including coal emissions, create pollution that has severely damaged human health.   

Mr. Guterres said eliminating them would result in a rise in life expectancy by 20 months, and prevent some 5.5 million deaths annually worldwide. 

Unlike renewable energy, investing in fossil fuels is “bad economics”, he continued, which explains why the world’s largest investors are abandoning coal. 

“They see the writing on the wall,” he said.  “The coal business is going up in smoke.” 

Time for bold leadership 

The UN chief said he was inspired to learn about a “promising trend” in India.   

During the pandemic, the proportion of renewable energy rose from 17 per cent to 24 per cent, while coal-fired power declined from 76 per cent to 66 per cent. 

Mr. Guterres underlined that renewable energy must continue to grow, and coal use progressively phased out. 

“Today is the time for bold leadership on clean energy and climate action. I call on India to be at the helm of the ambitious leadership we need,” he said. 

Honouring a climate action pioneer 

The Darbari Seth Memorial Lecture has been delivered annually since 2002, in honour of the late Indian industrialist and founder of The Energy and Resources Institute (TERI). 

The Secretary-General described Mr. Seth as “a climate action pioneer” who stressed that his country must end its reliance on fossil fuels and instead invest in solar power. 

“India has all the ingredients for exerting the leadership at home and abroad envisioned by Darbari Seth,” he said. 

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