Global renewable energy investment to double over next 10 years

Global investment in renewable energy infrastructure will double over the next 10 years, soaring to $395bn a year by 2020, according to a major new report from Bloomberg New Energy Finance (BNEF).
The report, entitled Global Renewable Energy Market Outlook, also predicts that growth will be maintained throughout the 2020s, with annual investment in new capacity and retrofitting of existing infrastructure reaching $460bn by 2030.
Speaking to BusinessGreen, Guy Turner, director of commodity market research at BNEF, said that the surge in investment will prove a truly global phenomenon.
“One of the most startling statistics is that around 40 per cent of global power demand will come outside the EU, North America and the BRIC [Brazil, Russia, India and China] countries,” he said.
“There is going to be huge growth in markets such as Indonesia, Vietnam, Thailand, the Middle East, Africa and Latin America.”
The report confirms that the short-term outlook for the European renewable energy market remains bearish as a result of the tough economic climate and the scaling back of government support mechanisms, which will result in China overtaking Europe as the lead market for renewable energy asset finance in 2014.
However, it predicts that there will be no major slowdown in project construction in North America, while emerging markets such as India and Africa will see investments grow by between 10 and 18 per cent a year through to 2020.
Turner said that the prospects for the sector after 2020 are even more encouraging as improvements in solar and wind energy technologies in particular should make renewable power cost competitive with fossil fuels.
“Once you get to post-2020 you start to get growth driven by raw economics rather than policies. Solar will continue to come down in price while better blades and energy storage will make onshore wind competitive at the same time as fossil fuel prices are likely to rise,” he said.
“Then you will start to see a step change in renewable energy economics where it will make more sense for people to invest in clean energy.”
These predictions are borne out in the report, which estimates that global solar energy capacity will rise from 51GW currently to 1,137GW in 2030, driven by $130bn a year of investment, while the wind energy sector will see investment increase from $82bn last year to $140bn in 2020 and $206bn in 2030.
However, despite the rapid growth, the report predicts that renewable energy including hydropower will account for only 15.7 per cent of global energy by 2030.
Turner warned that, while renewables will make a significant contribution to global electricity generation, the combination of rising energy demand and challenges transitioning to renewable powered transport and heat generation will make it difficult for renewables to account for a greater proportion of global energy output.
“With electricity generation we can move to lots of renewables, but electricity only accounts for 30 per cent of global energy,” he said. “There are renewable options for heat and transport, but there are major challenges to rolling them out.”
Source: Environmental-Expert
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