Global investments in renewable energy rebounded strongly last year, registering a solid 17% increase to $270 Billion in 2014 after two years of declines and brushing aside the challenge from sharply lower crude oil prices.
According to UNEP’s 9th annual Global Trends in Renewable Energy Investment 2015, prepared by the Frankfurt School – UNEP collaborating Centre for Climate and Sustainable Energy Finance (the Centre) and Bloomberg New Energy Finance (BNEF) the main cause were major expansions of solar installations in China and Japan and record investments in offshore wind projects.
A continuing sharp decline in technology costs – particularly in solar but also in wind – means that every dollar invested in renewable energy bought significantly more generating capacity in 2014. The 103GW of capacity added by new renewable energy sources last year compares to 86GW in 2013, 89GW in 2012 and 81GW in 2011 and made 2014 the best year ever for newly installed capacity.
“Once again in 2014, renewables made up nearly half of the net power capacity added worldwide” says Achim Steiner , UN Under-Secretary-General and Executive Director of UNEP. “These climate-friendly energy technologies are now an indispensable component of the global energy mix and their importance will only increase as markets mature, technology prices continue to fall and the need to rein in carbon emissions becomes ever more urgent.”
China saw by far the biggest renewable energy investments last year — a record $83.3 billion, up 39% from 2013. The US was second at $38.3 billion, up 7% on the year though this is below its all-time high reached in 2011. Third came Japan, at $35.7 billion, 10% higher than in 2013 and its biggest total ever.
A boom in European offshore wind development resulted in seven $1 billion-plus projects reaching “final investment decision” stage in 2014.
Among these the $3.8 billion 600MW Gemini installation off the cost of the Netherlands was the largest non-hydro renewable energy plant to get the go-ahead anywhere in the world. Other renewable energy sources did not perform so well by comparison.
Although 2014 was a turnaround year for renewables after two years of shrinkage, multiple challenges remain in the form of policy uncertainty, structural issues in the electricity system — even in the very nature of wind and solar generation, with their dependence on breeze and sunlight.