UN: Global renewables investment up despite financial crisis

Four out of every 10GW of new energy capacity built last year came from the renewables sector, according to a major new report commissioned by the UN Environment Programme which confirms that renewables now represent a mainstream energy investment.

The study, from analyst firm New Energy Finance, found that despite the onset of the global recession, rapid growth in developing countries meant that overall renewables investment, excluding large hydro projects, rose five per cent last year to $155bn (£94m).

Over $13.5bn of new private investment went into companies developing new low-carbon energy technologies, while $117bn was invested in the development of 40GW of capacity from established renewable technologies, such as wind, solar and biofuels, representing 40 per cent of all new power generation capacity built last year.

Wind attracted the highest level of investment with $51.8bn representing a one per cent improvement on 2007. However, the solar sector enjoyed the largest gains with $33.5bn of investment marking 49 per cent growth against 2007 levels.

Overall, renewables investment last year was more than four times greater than in 2004.

Achim Steiner, UN Under-Secretary General and head of UNEP, said that the economic crisis had undoubtedly taken its toll with investment in the US falling two per cent and growth in Europe proving slower than expected.

But he added that there were some "bright points in 2008, especially in developing countries". In particular, he noted that China had become the world's second largest wind market in terms of new capacity and the world's biggest photovoltaic manufacturer.

Steiner also said that renewable energy focused economic stimulus packages from a raft of countries, including Brazil, Chile, Peru, the Philippines, the US, China, Japan, the EU and South Korea, meant that the sector was poised for further growth.

However, he warned that the long-term health of renewables depended largely on the success of ongoing negotiations to agree an international climate change deal, which are scheduled to culminate at a meeting in Copenhagen later this year.

"This is where governments need to seal the deal on a new climate agreement - one that can bring certainty to the carbon markets, one that can unleash transformative investments in lean and clean green tech," he said.

The report warns that significant further increases in investment are needed, and calculates that annual investment in renewable energy, energy efficiency and carbon capture and storage needs to reach half a trillion dollars by 2020, representing an average of 0.44 per cent of global GDP, if emissions are to be kept at relatively safe levels.

Such levels of investment are possible based on growth over the last four years, but the report warns that a solid deal is required in Copenhagen to ensure momentum is maintained.

A separate report from the EU published yesterday found that reaching the 2020 renewable energy target to ensure 20 per cent of energy comes from renewables will create around 2.8 million jobs and generate an increase in GDP of around 1.1 per cent.