Further policy interventions required, say authors of UN report, if world is to move away from oil, gas, coal and embrace low emission future
By Ed King
Global temperatures continue to rise but there is a patch of good news. The UN’s annual study of clean power trends says investments in low carbon power are breaking records.
Funding for wind, solar and other forms of renewable energy inched up 5% in 2015 to US$285.9 billion, past a previous peak of $278.5 billion in 2011.
“We have entered a new era of clean energy growth,” said UN secretary general Ban Ki-moon. Investments in new coal and gas capacity through 2015 were 50% lower than renewables.
China boosted clean energy finance flows 17% to $102.9bn, while India was up 22% at $10.2bn said the UNEP-sponsored study, compiled by the Frankfurt School of clean energy finance.
“Investment also increased in the US, up 19% at $44.1 billion; in Middle East and Africa, up 58% at $12.5 billion, helped by project development in South Africa and Morocco,” the report said.
“Developing countries excluding China, India and Brazil lifted their investment by 30% last year to an all-time high of $36 billion, some 12 times their figure for 2004.”
In contrast, Europe saw a significant fall in cleantech spending linked to the economic downturn, dropping 21% to $48.8 billion.
“Strong investment” in the UK was an exception, said the authors, noting the country had taken a “less friendly” attitude towards renewables midway through 2015.
With average global temperatures likely to hit a new historic high in 2016, and carbon dioxide emissions also edging up, investments in coal, oil and gas will need to decline fast.
The study warned there is little chance of a power sector emissions peak before 2030, instead anticipating a 10% spike by 2040.
Last year, 195 countries agreed to target a goal of net zero emissions later this century, requiring the phase-out of oil, gas and coal and introduction of carbon-sucking technologies.
“Coal-fired power stations and other conventional power plants have long lifetimes,” said professor Udo Steffens, president of the Frankfurt School of Finance & Management.
“Without further policy interventions, climate altering emissions of carbon dioxide will increase for at least another decade.”
Solar PV: “In the second half of 2015, the global average levelised cost of electricity for crystalline silicon PV was $122 per MWh, down from $143 in H2 2014.”
Offshore wind: “Finally had a breakthrough year in China in 2015, with no fewer than nine projects financed, for an estimated cost of $5.6 billion.”
Onshore wind: “China is estimated to have commissioned a giant 29GW of capacity in 2015… an upward revision in the government’s capacity target for 2020 is also expected.”
Electric vehicles: “Sales… jumped 60% in 2015 to a new record of 462,000. EVs, via the recharging of their batteries, could also offer new opportunities for balancing renewables output.”
Battery storage: “In 2015, some 250MW of utility-scale electricity storage (excluding pumped hydro and lead-acid batteries) were installed worldwide, up from 160MW in 2014. Announced projects reached 1.2GW.”
Global trends: “Africa is one of the most promising markets for renewable energy over the next 10-20 years.”
2016 investments: “Capital costs for PV projects in India have fallen to among the cheapest in the world, at around $1.1 million per MW, and in January 2016, an auction in Rajasthan for 420MW of capacity produced winners at tariffs of just six US cents per kWh.”
Generous banks: “The development bank most active in the sector was KfW of Germany, which provided $28.3 billion of finance, followed by the European Investment Bank ($11.7 billion).”