Global information provider New Energy Finance contracted by the UN’s Environment Programme’s (UNEP) Sustainable Energy Finance Initiative says in “Global Trends in Sustainable Energy Investment 2009” that $155 billion was invested in 2008 in clean energycompanies and projects worldwide, not including large hydro.

UN Report Coverpage

UN Report Coverpage

Even without a deep exposure of how the numbers and the criteria for what’s included the trend in this series of reports, investment is up a great deal. – the 2008 investment is more than a four-fold increase since 2004 by this report’s calculation.

This is in the face of the extremely difficult financial market conditions prevailing during the latter half of 2008 as a result of the global economic crisis. The 2008 numbers topped 2007’s record investments by 5% in large part as a result of China, Brazil and other emerging economies.

The bulk of the money, some $105 billion was spent directly developing 40 GW of power generating capacity from wind, solar, small-hydro, biomass and geothermal sources. A further $35 billion was spent on developing 25 GW of large hydropower, according to the report.

The $140 billion investment in 65 GW of low carbon electricity generation is included with the estimated $250 billion spent globally in 2008 constructing 157GW of new power generating capacity from all sources. The renewable construction accounted for the majority of investment and over 40% of actual power generation capacity additions for 2008

For observations, Achim Steiner, UN Under-Secretary General and UNEP Executive Director, said: “Without doubt the economic crisis has taken its toll on investments in clean energy when set against the record-breaking growth of recent years. Investment in the United States fell by two per cent and in Europe growth was very much muted. However, there were also some bright points in 2008 especially in developing economies—China became the world’s second largest wind market in terms of new capacity and the world’s biggest photovoltaic manufacturer and a rise in geothermal energy may be getting underway in countries from Australia to Japan and Kenya. Meanwhile other developing economies such as Brazil, Chile, Peru and the Philippines have brought in, or are poised to introduce policies and laws fostering clean energy as part of a Green Economy. Mexico for example, the Global host of World Environment Day on June 5, is expected to double its target for energy from renewables to 16 per cent as part of a new national energy policy,” he added.

Breaking out the growth has wind attracting the highest new investment at $51.8 billion for 1% growth over 2007. Solar made the largest gains at $33.5 billion for 49% growth, while biofuels surprisingly dropped some to $16.9 billion for a 9% decrease in dollar volume.

The sustainable energy sector’s total transaction value during 2008 – including corporate acquisitions, asset re-financings and private equity buy-outs – was $223 billion, an increase of 7% over 2007. But capital raised via the public stock markets fell 51% to $11.4 billion as clean energy share prices lost 61% of their value during 2008. The year’s trend is exposed in investments in the second half of 2008 down 17% from the first half, and down 23% from the final six months of 2007, the trend has continued into 2009.

Several large economies such as the U.S. and China have announced stimulus packages with specific, multi-billion dollar provisions for energy efficiency up to boosts to renewable energies. The next six months or so will see more with a climax planned at the UN climate convention meeting in Copenhagen threatening a world wide new climate agreement-one that can bring certainty for enthusiasm or despair to the carbon markets.

The report, paid for by a government type entity, has its obligatory predictions:

“The investment surge of recent years and softened commodity markets have started to ease supply chain bottlenecks, especially in the wind and solar sectors, which will cause prices to fall towards marginal costs and several players to consolidate. The price of solar PV modules, for example, is predicted to fall by over 43% in 2009.” We’ll see.

For alarming consumers and complicating investment that has driven up prices, transaction values in the global carbon markets grew 87% during 2008, reaching a total of $120 billion. Following the lead of the EU and Kyoto compliance markets, several countries are now putting in place a system of interlinked carbon markets and working towards a global scheme under the UN Framework Convention on Climate Change (UNFCCC). That’s a great deal of money to be shifting from consumers to government’s preferred providers. It’s a numbers sure to grow unless consumers become informed voters about such schemes like the U.S. cap and trade swindle.

The report can be downloaded in full with a registration. In shorter forms an Executive Summary, a data set and a PowerPoint are also available.

On the whole the report will have little influence as in prior years. Countries do have a tendency to do what’s in their own interest, UN or not. Yet it is refreshing to see the numbers, however the base assumptions are set up, without a determined and obvious global warming assault in one’s face. Its there of course, just not so abrasive as usual.

The report could be a little comforting; the transition is underway to more sensible fuel and energy production. And try as governments might, the only things that are working for consumers at scale to impact them so far, can only exist with incentives that have had little impact on prices. The hard and damaging impacts really come from the restrictions and limits applied to petroleum exploration and the cartels imposing production cuts.

It’s not so grim yet, nor is it inevitable.

America can still lead by getting squarely in the way of things like the UN’s global warming effort.


2 Comments so far

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