Global investment in low-carbon energy surged to a record $243 billion last year, boosted by a 30 percent spending increase in China and a burst in small-scale solar-power installations.
The figure eclipses the $186.5 billion spent in 2009 and is more than double the level in 2005, Bloomberg New Energy Finance said today in a statement. The investment came even as clean energy shares had a “lackluster performance” last year, the London-based research company said.
The investment “flies in the face of skepticism about the clean-energy sector among public market investors,” New Energy Finance Chief Executive Officer Michael Liebreich said. “We have been saying for some time that the world needs to reach a figure of $500 billion per annum investment in clean energy if we are to see carbon emissions peak by 2020. What we are seeing in these figures for the first time is that we are halfway there.”
Asset financing for utility-scale projects such as wind farms, solar parks and biofuel plants expanded 19 percent last year to $127.8 billion, more than half of expenditure, New Energy Finance said. Enel Green Power SpA’s initial share sale led $17.4 billion of investments from the public markets, while small-scale projects including rooftop solar panels surged 91 percent to $59.6 billion.
Investment in China expanded 30 percent to $51.1 billion, according to the study.
The figures cover technologies including wind and solar power, energy efficiency, smart-grid equipment, biofuels and carbon capture and storage. Mergers and acquisitions data aren’t included in the study, because they’re not considered new investment.
While the expansion of investment is “very good news,” it has been “in fairly direct response” to government incentives, ranging from cheap debt in China to feed-in tariffs — guaranteed above-market rate prices — for solar power in Europe, Liebreich said.
“The industry needs to continue to drive down its costs and reduce its reliance on this sort of support,” he said.
The report, from the American Superconductor Corporation, which makes wind machine components and licenses other companies to produce such components, said that China might have the largest installed base of wind turbines, about 40,000 megawatts.
The United States ended the third quarter of last year with about 36,700 megawatts of installed capacity, and with a year-end slowdown, may have ended the year with less than 40,000 megawatts.
In 2010 China installed about 16,000 megawatts, versus 5,000 in the United States; in 2009 it installed 13,000 megawatts versus 10,000 in the United States, according to American Superconductor.
The wind picture is part of a trend; China is also adding coal-fired power plants and nuclear plants very rapidly to meet a sharply increasing demand for electricity. The United States, with a more mature economy, a recession and growing energy efficiency, is thought to have seen modest growth in electricity demand last year by comparison with 2009, but remains significantly below its peak electric demand because of the recession.
While China is already boasting “All aboard!” on a network of sleek passenger trains that zip 200 mph and beyond between major urban centres, the United States is still fussing about where to install a single high-speed rail line for a proposed California project.
That’s just a snapshot of how this country continues to lag behind its Asian competitor on the clean technology front.
Can America ever catch up? Yes, says Washington research fellow Miriam Pemberton. But it means taking a $100 billion-dollar bite out of the defense budget annually.
But prospects for that look dim. Many key leaders in a Republican-majority House have declared the Department of Defense off limits””even as they claim to be wielding hatchets for slicing away “waste” to lift the country out of economic doldrums.
An inside-the-Beltway defense contractor who asked to speak off the record told SolveClimate News in an interview that Congress won’t be lopping significant amounts from the defense budget any time soon. And even if it did, that money would not be redirected toward a clean technology deficit.
“The idea that we will whack the Department of Defense to make the Department of Energy robust is a fantasy,” he said. “DOD might be cut some. The question is, what happens to that money? I can’t see those resources going toward DOE. That shift will not occur.”
But Pemberton, who researches demilitarization issues for the Institute for Policy Studies’ Foreign Policy in Focus project, says Congress is missing the big picture.
If the effects of climate change are indeed so dire, she asks, then why shouldn’t defense dollars be redistributed toward DOE and other federal outlets such as the Environmental Protection Agency, the Department of Labor, the Department of Transportation and the National Oceanic and Atmospheric Administration that can play integral roles in avoiding these impending disasters?
The most important new message contained in the final report of the presidential commission investigating the gulf oil spill is aimed squarely at Congress: If lawmakers hope to win popular support for ramped-up oil drilling in America’s coastal waters then they must make sure that every possible precaution is taken to reduce the chances of another catastrophe like the spill.
A projected shortfall in the production of an important green energy alternative could hurt U.S. efforts to move away from fossil fuels, a ClimateWire analysis has found.
The federal oil spill commission’s final report contains many recommendations for the nation’s offshore oil and gas industry. Some recommendations call on the industry to change its ways; others call on the government to press beyond its current reforms. But one recurring theme is that everyone involved in this hazardous business needs to apply more brainpower.
It’s true that no amount of planning and clear thinking can reduce the risk of an accident to zero, but at Tuesday’s news conference unveiling the commission’s final recommendations, co-chairman Bob Graham said there’s no doubt the United States can do better.
“It’s not asking too much that our approach in the United States be at least equivalent of the best practices in the world,” he said. “They are not that today, and sadly the United States has one of the lesser records in terms of the safety of its offshore drilling practices.”
The commission found one reason for that is federal regulators have been focused on checking off boxes on regulatory lists instead of applying the kind of brainpower they should have been applying.
“Science has not been given a sufficient seat at the table. Actually I think that is a considerable understatement “” it has been virtually shut out,” Graham said.
The question is whether the newly constituted Congress is in a mood to listen. What the commission is asking for are tough new rules and money to strengthen federal oversight at a time when the House is controlled by politicians who broadly oppose new spending and seem hostile to regulation of any sort.
Yet Congress must act, and President Obama should use some of what leverage he has in this new political alignment to see that it does. As the commission co-chairman, Bob Graham, noted, without dramatic action another deep-water disaster will inevitably occur, leaving the public to “wonder why Congress, the administration and industry stood by and did nothing.”
The commission’s 380-page report is the most exhaustive accounting so far of what happened on the Deepwater Horizon. As it forecast in a preliminary summary, the commission blames the accident largely on poor decisions and other “management failures” by three companies involved: BP, Transocean and Halliburton.
It also strongly reinforces its earlier indictments of industry for failing to prepare adequate response plans and of government regulators for allowing themselves to be captured by an industry they were meant to oversee.
What’s new are the recommendations. All are sound, and most will require Congressional help.