Economic Crisis Hits E.U. and U.S. Clean Energy
However, Renewables Take Lion’s Share of Funding from Fossil Fuels
Jun 4, 2009
Over half the US$250 billion invested in new power generating capacity worldwide in 2008 was spent on renewable energy sources, according to a new United Nations Environment Programme (UNEP) report launched during the first week of June 2009.
The “Global Trends in Sustainable Energy Investment 2009” report said that of the US$155 billion invested in clean energy, more than two-thirds went to renewable energy projects from geothermal and wind to solar and bio fuels, and US$13.5 billion on companies ramping up new technology development.
The new study, prepared by research firm New Energy Finance, reported that 2008's investment in clean energy quadrupled the amount in 2004, and topped the record-breaking year of 2007 by five per cent, although outlay was down 17 per cent in the second half of 2008 compared to the first half, a trend continuing in 2009.
“Without doubt the economic crisis has taken its toll on investments in clean energy when set against the record-breaking growth of recent years,” said UNEP Executive Director Achim Steiner, a German national.
Emerging Economy Investments in Clean Tech on the Rise
As investment in low carbon energy fell in the United States by two per cent and growth slowed in Europe, the bright spots in 2008 came mostly from developing economies. According to the UNEP research China became the world’s second largest wind market in terms of new capacity and the world’s biggest photovoltaic manufacturer. A rise in geothermal energy may be getting underway in countries from Australia to Japan and Kenya.
Other developing economies, such as Brazil, Chile, Peru and the Philippines, are establishing policies and laws fostering clean energy as part of a Green Economy. Mr. Steiner said that Mexico, the global host of the 2009 World Environment Day which is observed annually on 5 June, is set “to double its target for energy from renewables to 16 per cent as part of a new national energy policy.”
Largest Gains in Wind and Solar Power While Bio Fuel lost
At almost US$52 billion, wind energy companies and projects attracted the highest amount of new investment, and solar power made the largest gains with US$33.5 billion – 49 per cent growth – while bio fuel investment dropped by nine per cent to US$16.9 billion.
One response to the global economic crisis has been the announcements of stimulus packages with specific, multi-billion dollar provisions for energy efficiency and incentives to utilize renewable energy resources.
Achim Steiner claimed that these 'green new deals' lined up by some economies, including China, Japan, the Republic of Korea, European countries and the United States contain some serious clean energy provisions. These will help support the market," said Mr. Steiner.
Big Boost Expected From UN Climate Convention Summit in Copenhagen
However, the biggest renewables stimulus package of them all can come at the UN climate convention meeting in Copenhagen in December 2009. This is where governments need to seal the deal on a new climate agreement – one that can bring certainty to the carbon markets and unleash transformative investments in lean and clean green technologies.
During 2008 the total transaction value in the sustainable energy sector – including corporate acquisitions, asset re-financings and private equity buy-outs – was US$223 billion, an increase of 7% over 2007. But capital raised via the public stock markets fell 51% to US$11.4 billion as clean energy share prices lost 61% of their value during 2008.
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