30 March, 2011

Global investment in clean energy shows strong recovery in 2010

Sérgio Abranches

Investments in clean energy were the  least harmed by the subprime and global financial crises. In Asia and Europe they’ve only decelerated in 2009, to resume a faster passe in 2010. In the Americas they’ve declined, but less than investment in other sectors of the economy. In the U.S. they’ve become a focal point of the recovery program.Last year, funding for clean energy rebounded. Investment in clean energy projects and R&D has grown strongly in all regions of the the World in 2010, shows Pew Center’s recently issued research report: Who’s Winning the Clean Energy Race?

Global investment in clean energy technologies has increased 30% from over 2009 to reach US$ 243 billion in 2010. G20 countries have allocated about 20% of total funding to R&D projects.

Wind and solar power accounted for 72% of the total invested. The volume of funding assigned to wind power increased 34% to US$ 95 billion (48% of total non-R&D investment). Around one third of it has arrived in the fourth quarter. The largest growth of investment was directed to new solar power installations, that increased 53% to US$ 79 billion (40%).

Europe continued to lead clean energy investment, accounting for 39% of global inversions, totaling US$ 94.4 billion. Around 44% of this effort was made in Germany, reaching US$41.4 billion. Italy has also been very active investing US$ 13.9 billion, 15% of the world’s total.

There was a significant increase in investment in small projects, mainly residential solar roofs (PV) especially in Germany, Italy and France.

In Asia investment increased 33% to US$ 82.8 billion, 35% of global investment in clean energy. China led the region, with an increase of  39% from 2009 to US$ 54.4 billion in 2010, 22% of total global inversion and 66% of Asia’s total.

In the Americas, investment reached US$ 65.8 billion, 27% of total new money put in clean energy. The U.S. showed the fastest rate of growth: 51%, but to reach only $34 billion, 14% of global investment and 52% of the America’s.

In Brazil, there was a small decrease of investment, – 1.3% to $ 7.6 billion, 11,5% of the regional total e about 3% of global inversions.

Brazil is only now starting to invest in wind power, but still as a small side program, rather than as a main part of its core energy policy. Major investments were allocated to very controversial hydropower plants in the Amazon, biofuels, and fossil fuel fired thermal plants. The country has a very strong biofuel sector, but R&D efforts towards developing second generation biofuels are lagging.

In the rest of the world investment in biofuels was the lowest since 2005. The PEW Center report says that this low rate of investment in biofuels reflects “the fact that first-generation biofuels production capabilities exceed demand in a number of key markets, and second generation biofuels are not sufficiently advanced for large-scale commercial deployment.”

The fact that several countries have focused on clean energy as one of the priority investment targets for their economic recovery plans was a key factor behind this investment rebound. According to Pew Center, “governments allocated more than $194 billion for clean energy efforts in stimulus plans, but only 10 percent of that amount reached the sector in 2009. In 2010, stimulus funding for clean energy efforts more than tripled to $74.5 billion, led by sharply increased funding for projects in five G-20 countries: the United States, China, Germany, Japan and South Korea.” The report also says that although “2010 was the peak year for clean energy stimulus funding, more than one third ($69 billion) of the $194 billion pledged to date is expected to be spent in 2011.”

report by CAP analysts said that the American Recovery and Reinvestment Act (ARRA) has provided the impulse for clean energy technology to become one of the fastest-growing sectors of the economy. The sector is projected to grow to $2.3 trillion by 2020 globally.

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