The UN Environment Program (UNEP) announced in a new report that in 2011 global renewable energy investment reached a record $257 billion; a 17 percent increase from 2010, and a 600% increase over the past seven years.
The solar energy sector saw the largest amount of investment, up from 2010 by 52% to an impressive $147 billion, more than half the total investment in the renewable energy market. This increase was due to an explosion in the number of installations of rooftop panels in the Italy and Germany, along with large-scale concentrated solar thermal projects in the US and Spain.
In terms of investment levels by individual nations China led the field with $52 billion, up by 17 % form 2010; however the US are hot on their heels after a huge 57% increase saw them invest $51 billion in 2011. The UK, Spain, and Italy also vastly increased the amount spent on renewable energy projects by 59%, 45%, and 43% respectively. According to the UNEP report “the fastest investment expansion of any large renewables market in the world” was experienced in India where a 62% rise saw $12 billion invested.
Whilst all this seems great news for the renewable energy industry, the 17% increase was actually lower than the 37% increase from 2009 to 2010, and some regions such as Germany, the Middle East, and Africa saw their renewable investments decline. Economic difficulties have led to austerity measures which means some governments have cut subsidies and tax breaks, triggering a series of company failures and factory closures.
Although Udo Steffens, the president of the Frankfurt School of Finance & Management reassured us that such failures are all part and parcel of a maturing market.
“Renewables are starting to have a very consequential impact on energy supply, but we're also witnessing many classic symptoms of rapid sectoral growth — big successes, painful bankruptcies, international trade disputes and more. This is an important moment for strategic policymaking as winners in the new economy form and solidify.”
Michael Liebreich, the CEO of Bloomber New Energy Finance, said that “in 1903, the United States had over 500 car companies, most of which quickly fell by the wayside even as the automobile sector grew into an industrial juggernaut. Writing off the auto industry based on the failures of weaker firms would have been foolish. Today, the renewable energy sector is experiencing similar growing pains as the sector consolidates.”
By. James Burgess of Oilprice.com
