15 May 2017 2017 08:15 AM GMT

Overall Investment Down But Global Renewable Capacity Surges To Record Levels

As the cost of clean technology continues to fall, the world added record levels of renewable energy capacity in 2016, at an investment level 23 percent lower than the previous year, according to new research published by UN Environment, the Frankfurt School-UNEP Collaborating Centre, and Bloomberg New Energy Finance.

Global Trends in Renewable Energy Investment 2017 finds that wind, solar, biomass and waste-to-energy, geothermal, small hydro and marine sources added 138.5 gigawatts to global power capacity in 2016, up 8 percent from the 127.5 gigawatts added the year before. The added generating capacity roughly equals that of the world’s 16 largest existing power producing facilities combined. Investment in renewables capacity was roughly double that in fossil fuel generation; the corresponding new capacity from renewables was equivalent to 55 percent of all new power, the highest to date. The proportion of electricity coming from renewables excluding large hydro rose from 10.3 per cent to 11.3 per cent. This prevented the emission of an estimated 1.7 gigatonnes of carbon dioxide.

The total investment was $241.6 billion (excluding large hydro), the lowest since 2013. This was in large part a result of falling costs: the average dollar capital expenditure per megawatt for solar photovoltaics and wind dropped by over 10 per cent. “Ever-cheaper clean tech provides a real opportunity for investors to get more for less,” said Erik Solheim, Executive Director of UN Environment. “This is exactly the kind of situation, where the needs of profit and people meet, that will drive the shift to a better world for all.”

New investment in solar totalled $113.7 billion, down 34 percent from the record high in 2015. Solar capacity additions, however, rose to an all-time high of 75 gigawatts. Wind made up $112.5 billion of investment globally, down 9 percent; wind capacity additions fell to 54 gigawatts from the previous year’s high of 63 gigawatts. “The investor hunger for existing wind and solar farms is a strong signal for the world to move to renewables,” said Prof. Dr Udo Steffens, President of Frankfurt School of Finance & Management, commenting on record acquisition activity in the clean power sector, which rose 17 percent to $110.2 billion.

While much of the drop in financing was due to reduced technology costs, the report documented a slowdown in China, Japan, and some emerging markets, for a variety of reasons. Renewable energy investment in developing countries fell 30 percent to $117 billion, while that in developed economies dropped 14 percent to $125 billion. China saw investment drop 32 percent to $78.3 billion, breaking an 11-year rising trend. Mexico, Chile, Uruguay, South Africa and Morocco all saw falls of 60 per cent or more, due to slower than expected growth in electricity demand, and delays to auctions and financings. Jordan was one of the few new markets to buck the trend, investment there rising 148 percent to $1.2 billion.

The US saw commitments slip 10 percent to $46.4 billion, as developers took their time to build out projects to benefit from the five-year extension of the tax credit system. Japan slumped 56 percent to $14.4 billion. “The question always used to be ‘will renewables ever be grid competitive?’,” said Michael Liebreich, Chairman of the Advisory Board at BNEF. “Well, after the dramatic cost reductions of the past few years, unsubsidised wind and solar can provide the lowest cost new electrical power in an increasing number of countries, even in the developing world – sometimes by a factor of two.” “It’s a whole new world: even though investment is down, annual installations are still up; instead of having to subsidise renewables, now authorities may have to subsidise natural gas plants to help them provide grid reliability.”

Recent figures from the International Energy Agency cited the switch to renewables as one of the main reasons for greenhouse gas emissions staying flat in 2016, for the third year running, even though output in the global economy rose by 3.1 per cent. Investment in renewables did not drop across the board. Europe enjoyed a 3 per cent increase to $59.8 billion, led by the UK ($24 billion) and Germany ($13.2 billion). Offshore wind ($25.9 billion) dominated Europe’s investment, up 53 per cent thanks to mega-arrays such as the 1.2 gigawatt Hornsea project in the North Sea, estimated to cost $5.7 billion. China also invested $4.1 billion in offshore wind, its highest figure to date.

Another positive sign came in winning bids for solar and wind in auctions around the world, at tariffs that would have seemed inconceivably low a few years ago. The records set last year were $29.10 per megawatt hour for solar in Chile and $30 per megawatt hour for onshore wind in Morocco. Additional highlights included purchases of assets such as wind farms and solar parks reached a new high, $72.7 billion and corporate takeovers reached $27.6 billion, 58 per cent more than 2015. The smaller sectors had mixed fortunes in terms of new investment. Biofuels fell 37 percent to $2.2 billion, the lowest for at least 13 years; biomass and waste held steady at $6.8 billion and small hydro at $3.5 billion. Geothermal rallied 17 percent to $2.7 billion. Marine edged down 7 percent to $194 million.

Sitting two different technologies in the same location – to make use of shared land, grid connections, and maintenance, and to reduce intermittency – is growing. Some 5.6 gigawatts of these ‘hybrid’ projects have been built or are under development worldwide. The Ramanathapuram solar complex in India, billed as the world’s largest ever solar voltaic project (648 megawatts), was constructed. The report in full can be downloaded at fs-unep-centre.org.

February 5th 2018
EV, Renewables See CO2 Emissions Plateau By 2030, But Far From 2 Degree Pathway

Major shifts in the global energy landscape, particularly related to electric vehicles (EVs) and renewable energy sources, mean that MEI expects global CO₂emissions to plateau by 2030. However, increased global energy demand means emissions will remain at more than double the level required for a 2 degrees Celsius warming pathway. Ole Rolser, Associate Partner and Solution Leader at MEI, comments: “Despite the significant momentum around EVs and renewable energy sources taking an increasing share of the power market, to realise the 2 degrees pathway scenario, we’d have to see much broader, much more disruptive change than what we’re seeing now.”

February 5th 2018
Masdar City To Test Latest Concepts In Autonomous Electric Vehicles

ICONIQ Motors, a China-based EV company, has reached agreement to test its autonomous driving concept at Masdar City. The ICONIQ SEVEN, one of the world’s latest EV models is a futuristic vehicle, built on an intelligent, connected vehicle platform integrated with Microsoft’s AZURE cloud technology; and is set to hit the market in 2019. “Masdar City has put smart and sustainable mobility at the centre of its strategy, as highlighted by the historic success of its flagship driverless Personal Rapid Transit (PRT) system,” said Yousef Baselaib, Executive Director of Sustainable Real Estate at Madsar. “It is the ideal location to test innovative autonomous driving concepts.”

December 27th 2017
Rooftop PV Presents a $23 Billion Opportunity in India Over The Next 5 Years

India is accelerating development of renewable energy projects to provide cheap, reliable and clean power to its 1.3 billion people. The country’s per-capita on-grid electricity consumption has increased significantly over the four years; due to increased industrial activity, higher uptake of electrical appliances by residential electricity users and the addition of new consumers to the grid. During this period, the cost of electricity from rooftop PV has halved, due to fierce competition in the market and a drop in equipment prices. In contrast, average retail electricity rates have increased by 22% in the same period. This has made rooftop PV cheaper than commercial and industrial grid tariffs in all major states in India.

January 8th 2018
Vestas Sets 10.6 GW Record In 2017 After Year-End Surge; Ups Cashflow Guidance

Vestas has received a firm and unconditional order for 190 MW of 4 MW platform turbines in the U.S. taking the global order intake for the company in 2017 to 10.6 GW, surpassing 2016’s record order intake of 10.5 GW. The surge of orders at the end of the year has resulted in the company revising its guidance for free cashflow upwards. It now expects the free cashflow for 2017 to be €1.15bn-€1.25bn, as compared with the previous guidance of €450m-€900m. Markets have reacted favourably with the company share price experiencing an increase of 5%. 


 

   

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