Investing in greener economy could spur growth: U.N.
NAIROBI (Reuters) - Channeling 2 percent, or $1.3 trillion, of global gross domestic product into greening sectors such as construction, energy and fishing could start a move toward a low-carbon world, a report launched on Monday said.
The investment would expand the global economy at the same rate, if not higher, as under present economic policies, said the report by the U.N. Environment Program (UNEP).
“Investing 2 per cent of global GDP into 10 key sectors can kick-start a transition toward a low-carbon world,” the Nairobi-based agency said in a statement.
“The sum, currently amounting to an average of around $1.3 trillion a year and backed by forward-looking national and international policies, would grow the global economy at around the same rate if not higher than those forecast, under current economic models.”
UNEP’s Executive Director Achim Steiner said in the statement: “With 2.5 billion people living on less than two dollars a day and with more than two billion people being added to the global population by 2050, it is clear that we must continue to develop and grow our economies.
“But this development cannot come at the expense of the very life support systems on land, in the oceans or in our atmosphere.”
Agriculture, buildings, energy supply, fisheries, forestry, industry, tourism, transport, waste management and water are sectors that could do with more greening, the report said.
Buildings are the single largest emitter of greenhouse gases because of inefficient heating in offices and homes, according to the study entitled “Toward a Green Economy.”
THREEFOLD INCREASE IN RECYCLING
The sector’s footprint could nearly double by 2030, or 30 percent of total energy-related carbon dioxide.
The report suggests investing $108 million in the waste sector annually could increase recycling threefold by 2050 and reduce landfill contents by more than 85 percent.
In Brazil, recycling already makes $2 billion a year while avoiding 10 million tonnes of greenhouse gas emissions, UNEP said.
Greener policies would still grow economies while reducing the ecological footprint by nearly 50 percent in the next 40 years, but some jobs would be lost as a result in sectors such as fisheries, the report said.
Investment in more sustainable productive activities would, however, offsets those job losses by developing sectors such as renewable energy.
Government subsidies in the fishing industry amount to about $27 billion a year and have created excess capacity and depleted fish stocks globally.
Greening agricultural with practices such as efficient use of water or organic nutrients would offer a means of feeding a global population of about 9 billion by 2050 without damaging nature.
Farming practices currently use more than 70 percent of freshwater resources and contribute more than 13 percent of greenhouse gases.
“Governments have a central role in changing laws and policies, and in investing public money in public wealth to make the transition possible. By doing so, they can also unleash the trillions of dollars of private capital in favor of a green economy,” said Pavan Sukhdev, head of UNEP’s Green Economy Initiative.
Solar photovoltaic on the brink of economic breakthrough
Global investments in solar photovoltaic (PV) technology could double from €35-40 billion today to over €70 billion in 2015, according to a study published today by the European Photovoltaic Industry Association (EPIA) and Greenpeace International. The estimated investments in the European Union alone would rise from today’s €25-30 billion to over € 35 billion in 2015.
New study projects solar investments to double until 2015
This report on the global market outlook for solar photovoltaic, named “Solar Generation 6” (1) foresees that PV could account for 12% of the European power demand by 2020, and up to 9% of the global power demand by 2030.
“Our goal is to make solar photovoltaic technology a mainstream power source through policy support at an optimal cost for consumers,” said Sven Teske, Senior Energy Expert at Greenpeace International. He added that, “Solar photovoltaic is a key technology for combating climate change; our research shows that it creates 35 to 50 jobs per tonnes of CO2 savings and will increase the security of energy supply by reducing dependency on energy imports to Europe.”
“Solar photovoltaic technology has, for many years now, shown increased power efficiencies and cost reductions,” said Ingmar Wilhelm, President of EPIA. “Today’s cost predictions, driven also by economies of scale in light of global photovoltaic capacity, totaling 40,000 MW in 2010, show that the technology is on the brink of an economic breakthrough” Mr. Wilhelm added.
PV prices have dropped some 40% since 2005 and by 2015 the cost of PV systems is expected to drop by an additional 40% compared to current levels. As a result, PV systems will be able to compete with electricity prices for households in many countries of the European Union within the next five years.
“We aim to make this important phase of cost competitiveness visible, and EPIA will provide a realistic road-map for every country with clear concepts on market mechanisms allowing equal treatment of all electricity sources,” added the President of EPIA.
The report estimates that current global solar PV capacity could grow from over 36 GW at the end of 2010 to close to 180 GW by 2015. European PV capacity is expected to increase from over 28 GW in 2010 to nearly 100 GW by 2015, and has the potential to reach up to 350 GW on a global basis by 2020. This would save as much as 1.4 billion tonnes of CO2 emissions globally and 220 million tonnes within the EU every year(3).
In addition to its environmental benefits, the report shows solar energy to be a sustainable way to address concerns about energy security and volatile fossil fuel prices, as well as a substantial factor in economic development. The European PV industry, which already employs over 300,000 people, could provide jobs to over 600.000 by 2015, and has the potential to further increase to 1.6 million in 2020 if general policy support remains effective.
The “Solar Generation 6” report also highlights the enormous PV potential for Europe in the light of the Union’s established 20% renewable energy and the 20% energy efficiency target. Based on this potential for photovoltaic growth, the EU could easily increase its emission reduction target from the current 20% by 2020 to a more aggressive 30% level.
Source: Solarplaza
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2010 became a record breaking year with $243bn investment in Clean energy
A record of $243 billion in 2010 of global investment in clean energy was reached, a 30% increase on 2009 levels, according to research house Bloomberg New Energy Finance (BNEF).
2011 will have to be a very strong year to beat 2010. At this stage, the signs are encouraging,” said Michael Liebreich, chief executive of London-based BNEF, citing the likelihood that costs will come down for solar panels and wind turbines, and the increasing availability of private sector debt and equity finance.
“This is a spectacular result, beating previous record investment levels by a clear margin of more than $50 billion,” he added. “We have been saying for some time that the world needs to reach a figure of $500 billion per annum investment in clean energy if we are to see carbon emissions peak by 2020. What we are seeing in these figures for the first time is that we are half-way there.”
China attracts $51bn clean energy investment
China led the way in 2010, with a 30% increase from 2009 in investment in clean energy assets, listed equity, private equity and R&D, to $51.1 billion - the largest figure for any country, BNEF said.
A surge in investment in smaller-scale renewable power, or ‘distributed generation’, projects also contributed to the record year, with a 91% increase in investment to $59.6 billion.
The solar sector saw a 49% increase in investment to $89.3 billion, largely driven by this rush into small-scale projects, particularly in Germany, the US, the Czech Republic and Italy.
Global wind investment grew 31% to $96 billion and BNEF noted that investment in China and large offshore wind farms in Europe accounted for 38% of the total investment in 2010.
Source: Bloomberg New Energy Finance
Global Trends in Sustainable Energy Investment 2010
Bloomberg New Energy Finance reports:
The sustainable energy investment story of 2009 was one of resilience, frustration and determination.
Resilience to the financial downturn that was hitting all sectors of the global economy and frustration that, while the UN climate convention meeting in Copenhagen was not the big breakdown that might have occurred, neither was it the big breakthrough so many had hoped for.
Yet also determination on the part of many industry actors and governments, especially in rapidly developing economies, to transform the financial and economic crisis into an opportunity for greener growth.
Let’s look at the numbers: new investment in sustainable energy was $162 billion in 2009, or some 7% down from 2008 figure of $173 billion - an estimate revised up from the original $155 billion made at the time.
Nevertheless 2009’s figure was still the second highest annual investment total ever (and four times that seen in 2004) and spending on new capacity (including large hydro as well as other renewable) was for the second year running bigger than the investment in new fossil fuel capacity.
This underlines that sustainable energy was not a bubble by-product of the ill-fated credit boom, but a global investment transition that is likely to strengthen over time.
In 2009, governments stepped in as never before - some $188 billion of ‘green stimulus’ commitments began to be spent - and public banks like the European Investment Bank and Germany’s KfW helped bridge the financing gap.
Supportive policies for clean energy expanded. According to REN21’s Renewables 2010 Global Status Report the companion report to SEFI’s Global Trends also launched today, over 100 countries had some type of policy target or promotion policy for renewable energy by early 2010. This represents more than half the countries in the world.
China for the first time took the top spot globally for overall sustainable energy investment in 2009, pushing the United States to second place: in 1999 China made 1% of the world’s solar panels; by 2008 it was the world’s leading producer with a 32% market share.
Last year, as export markets faltered, domestic demand surged, especially in the wind sector. The close-to- 14GW of new wind capacity built in China during 2009 was nearly 15% of the total new generating capacity added to the grid.
The Copenhagen Accord, to which over 100 countries have now associated themselves, has brought developed and developing economies together for the first time on decoupling economic and emissions growth.
But there is a gap between the ambition and the science in terms of where the world needs to be in 2020 to avoid dangerous climate change by mid-century. Sustainable energy, from wind to geothermal and photovoltaic to solar thermal, can assist in bridging that gap if the right kind of green economy policies are accelerated and embedded internationally and nationally.
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Solar Market Heats Up
Source: Renewable Energy World
The US and Canada are waking up to the prospects of solar power generation. Prices for solar PV have fallen and utilities are increasingly developing projects that use the sun to generate electricity.
Tulsa, Oklahoma, USA — Solar power, once seemingly confined to the desert Southwest, is making inroads from Florida to New Jersey, Colorado to Nevada. Ron Kenedi, vice president of Sharp Solar Energy Solutions Group, said “the whole country is waking up to the idea of solar.” Take Florida Power & Light’s (FP&L’s) 25 MW DeSoto Next Generation Solar Energy Center in Arcadia, Fla. The plant is now one of the largest PV installations in North America, having overtaken NV Energy’s 17 MW facility at Nellis Air Force Base in Nevada. The DeSoto Center uses more than 90,500 crystalline-silicon PV panels mounted on tracking systems and is capable of generating about 42,000 MWh annually.
Then there’s the 21 MW Blythe power plant in Riverside County, Calif. First Solar developed and built the plant. Electricity generated by the facility is being sold to Southern California Edison (SCE) under a 20-year power purchase agreement. The Blythe plant is one of the largest thin film PV projects in the U.S.
Spawning developments like the Blythe plant, California continues to lead the U.S. solar market with 53 percent of U.S. PV on-grid installations, according to Solarbuzz, a market research business focused on solar developments. But solar power is no longer just a California thing.
“Now just about every place in the U.S. is being represented by solar,” Kenedi said. “In the Southeast, you have Tennessee and Florida; in the Northeast, Pennsylvania and New Jersey; in the West, Colorado, California and Nevada.”
What Recession?
The solar industry shone brightly in 2009 while much of the rest of the economy was in a blackout. According to the American Solar Energy Society, 33,000 solar installations were made in 2009, a 40 percent increase from the 251 MW in 2008 to 481 MW in 2009. The Solar Energy Industries Association’s (SEIA’s) U.S. Solar Industry Year in Review 2009 (PDF) said total U.S. solar electric capacity from PV and concentrating solar power (CSP) technologies climbed past 2,000 MW. Venture capitalists invested more in solar technologies than any other clean technology in 2009, pumping some $1.4 billion into solar companies, according to SEIA.
Hamm said utility-scale projects grew by 267 percent in 2009. According to SEPA’s latest ranking, top utilities were Pacific Gas & Electric Co. in California, Southern California Edison, Public Service Electric & Gas Co. in New Jersey, Florida Power & Light Co., San Diego Gas & Electric Co., Public Service Co. of Colorado-Xcel Energy, Arizona Public Service Co., Salt River Project in Arizona, Sacramento Municipal Utility District in California and the Los Angeles Department of Water and Power.
Supply and Demand
Competition from solar panels continues to make PV the fastest growing solar market in North America. PV is easier to finance, quicker to permit and easier to deploy than CSP. And panel costs are falling to the range of $3.50 to $5.50 a watt. Solar thermal costs remain largely unchanged at $7 to $8 a watt.
As Chinese manufacturers enter the solar market, competition has caused downward pressure on PV manufacturing prices. Aside from manufacturing, the solar power industry has recovered in the past year from oversupply to a healthier balance of supply and demand. Many solar programs were just launching when the recession hit, causing financing for big jobs to become congested. “The train got derailed for a little while,” Kenedi said. With high demand from European markets whose incentives will soon run dry and the continual growth of the U.S. market, the balance of supply and demand is now more equal.
“The market has grown faster than we thought it would,” Kenedi said. “We’re doing a good job at lowering the price of solar.” He said the cost of a PV system has dropped 35 to 40 percent in the last 14 months.
Incentives
Incentives work like a magnet to draw some power companies into renewables. One strong incentive has been the Treasury Grant Program, a cash grant that can be taken in lieu of the Investment Tax Credit, providing a 30 percent incentive to property that is part of a qualified facility, fuel cell property, solar property or small wind property. The 30 percent Treasury Grant Program was extended in October 2008 but is set to expire at the end 2010. As a result, many in the solar industry are rushing to meet the start-construction deadline of December 31.
Tom Fair of NV Energy said tax incentives need to be reliable for the solar industry to move forward. “It really does make for a more certain investment environment. If you know what your tax situation is going to be a couple years from now, then you can put your money into something.”
The European Union (EU) has found success in its feed-in tariff program. And the Ontario Power Authority (OPA) was commissioned last fall by the province to commence a feed-in tariff program similar to that of the EU. Ontario adopted the Green Energy and Green Economy Act that provides a feed-in tariff program for all renewables: solar, hydro, wind and bio energy. In addition, the Act also includes a commitment to energy conservation improvements, smart grid developments, and supports the creation of 50,000 jobs over the next three years. Ontario’s goal is to go off of coal by 2014, said JoAnne Butler, OPA’s vice president of electricity resources. This will mean shutting down coal-fired plants that produce 6,000 MW province-wide. Butler said Ontario is well on its way to meeting this goal.
The challenge to renewable growth in Ontario is lack of available transmission capacity, Butler said. OPA’s plan is to contract for 2,500 MW of renewables, but “that uses every megawatt of access capacity on the Ontario grid.” However, Ontario is working on a series of transmission system expansion projects aimed at opening up capacity to accommodate more renewable projects in the future.
Future Projections
Solarbuzz released a study in July projecting that U.S. solar will grow tenfold by 2014. On a global scale, the U.S. is fourth in PV production behind Germany, Spain and Japan. In CSP developments, the U.S. is No. 1 for CSP production with 431 MW as of March 2010. Spain was No. 2 at 231 MW. However, Spain ranked No. 1 in solar thermal growth, adding 220 MW from March 2009 to March 2010. The U.S. added 7 MW.
So is the future of solar in North America truly bright?
