Renewable energy nips at the heels of fossil fuels

A new report shows that renewable energy is beginning to mix it with the big players in the fossil fuels sector – and it is solar leading the charge.

As we reported yesterday in the news section of Climate Spectator, Bloomberg New Energy Finance, commissioned by the United Nations Environment Program, has just released its annual wrap-up of global investment trends in renewable energy for the 2011 period.

While the International Energy Agency made it clear yesterday that there is so much we need to do to contain global warming (IEA: We’re on track for 6 degree warming, June 12), this Bloomberg report provides some reasons for optimism.

The chart below taken from this report is a great illustration of the incredible task ahead, but also the grounds of optimism.

The bottom two lines illustrate that renewable energy still has a long way to go before it will become a source of electricity, on level pegging with fossil fuels – making up just 6 per cent of total global power generation. But when it comes to new installations of power stations, covered by the top two lines, renewables are well and truly mixing it with the big boys. Of all the power generation newly installed in 2011, renewable energy made up nearly 43.7 per cent of the generating capacity and 30.7 per cent of actual power generation.

Renewable energy power generation and capacity as a proportion of all power sources

Source: Bloomberg New Energy Finance

While the Australian debate seems to be warped by this perception that China and the US aren’t doing anything about global warming, they are in fact leading the world in investment in renewable energy. The chart below illustrates that China invested $51 billion and the United States $48 billion in renewable energy last year. The US surge in growth of investment of 61 per cent though is nothing to get too carried away with, being a product of on-again/off-again tax credit support policies. These are a lesson in how not to design carbon emission reduction policy.

New investment in renewable energy by country and asset class – 2011, and growth from 2010 $billions

Source: Bloomberg New Energy Finance

The big story from a technology perspective is how solar energy has left all the other renewable energy technologies in its dust. In 2010, solar energy was second to wind in terms of investment. But the chart below shows how it has surged well beyond wind with 75 per cent greater investment. Indeed it was the only technology other than small hydro which managed to realise any growth in investment from 2010.

Global new investment in renewable energy by fuel type and growth on 2010 - $billions

Source: Bloomberg New Energy Finance

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