Renewable energy’s share of world electricity generation climbed steadily despite a 14 percent drop in investments in the sector, says a new report Global Trends in Renewable Energy Investment 2014.
Globally, renewables excluding large hydro accounted for 43.6 percent of newly installed generating capacity in 2013.
India’s investment in renewable energy decreased by 15 percent to $6 billion (Rs.360.48 billion) in 2013. On the other hand, China invested more than the contribution of the entire Europe in 2013 as per the report. However, at $56 billion, the Chinese investment was down six percent.
The report also finds that installed solar capacity jumped 26 percent – from 31 GW in 2012 to a record 39 GW in 2013 even as the investment in solar capacity decreased 23 percent from US$135.6 billion to US$104.1 billion.
Global Trends in Renewable Energy Investment 2014 was compiled by the Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance, the United Nations Environment Programme (UNEP) and Bloomberg New Energy Finance.
This would have increased by about 12 percent the gap between where emissions are heading and where they need to be in 2020 if the world is to have a realistic prospect of staying under a two degree Centigrade temperature rise.
Although investment in renewable energy capacity, including all hydro, in 2013 was once again below gross investment in fossil-fuel power, at US$227 billion compared to US$270 billion, it was roughly double the net figure for investment in fossil-fuel power excluding replacement plant, the research said.
“A long-term shift in investment over the next few decades towards a cleaner energy portfolio is needed to avoid dangerous climate change, with the energy sector accounting for around two thirds of total greenhouse gas emissions,” said Achim Steiner, UN under-secretary-general and executive director of UNEP.
“The fact that renewable energy is gaining a bigger share of overall generation globally is encouraging,” Steiner added. “To support this further, we must re-evaluate investment priorities, shift incentives, build capacity and improve governance structures.”
While overall decline in investment dollars had been disappointing, foundations for future growth in the renewable energy market fell into place in 2013, said Ulf Moslener, head of Research of the Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance.
While the year saw increased interest from long-term investors such as pension funds, insurance companies, wealth managers and private individuals in the equity and debt of wind and solar projects, part of their new engagement was through clean energy bond issuance, which set a new record of US$3.2 billion raised in 2013, as well as via new types of financing vehicles including North American ‘yield companies’ and real estate investment trusts.
But the star performer among investment types in 2013 was public market equity-raising by renewable energy companies, which jumped 201 per cent to US$11 billion, the report said. This was the highest since 2010, spurred on by the rally in clean energy share prices and institutional investors’ appetite for funds offering solid yields.