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Bloomberg New Energy Finance (BNEF) has released a report stating that despite increasing interest in and awareness of clean energy technologies, for the second year in a row global investment in renewable energy has fallen. Last year it was down to $253 billion, and in Europe it fell by a staggering 41% compared to the year before.
This news has come just as investors meet at a United Nations summit aimed to encourage investment in clean energy and build momentum towards the shift to a clean energy economy. It marks the second year of declining investment in the sector, down from the record high of $318 billion in 2011. It has been calculated that in order to make the transition global investment in renewable energy technologies must reach $1 trillion a year by 2030.
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However Michael Liebrich, the founder of BNEF, stated that “the top?line figures don't tell the whole story.” He explained that the fall in investment, especially in Europe, was partly due to the declining cost of photovoltaic solar panels, and that the number of solar installations around the world actually grew last year by 20%.
The largest cause of the fall in investment was due to the fact that big economies such as Germany, France, and Italy, all began to reduce the government support for new alternative energy projects, resulting in Europe’s clean energy investment total to fall from $98 billion to $58 billion.
Germany’s spending declined by the most from $26.2 billion in 2012 to $14.1 billion in 2013. Britain only reduced their investment level by a small amount, from $14.3 billion to $13.1 billion.
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Even China’s level of clean energy investment fell for the first time in a decade, down by 3.8%, and US investment fell to $48.4 billion, an 8.4% drop.
The country to see the largest increase in spending was Japan, who invested an extra 55% in 2013, up to $35.4 billion, as they worked hard to replace the capacity lost from its decision to shut down all nuclear reactors.
Christina Figueres, the UN Climate Chief, hoped to use the summit to try and persuade financial institutions to boost their investments up to $1 trillion a year. She will explain that coal and oil are proving risky options as they face more opposition and are more difficult and costly to extract.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com