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The Clean Energy Race

March 31, 2011

The American Pew Environmental Group has published its annual report on clean energy investments, which shows that halted investments during the recession are now increasing rapidly. In 2010 global clean energy investments rose by 30% compared to 2009 to an all time high of $243 billion, making them 630% larger than seven years ago. Regionally Europe is ahead of Asia and the Americas, but with Asia growing faster than the others it is likely it will be the leader in a not too distant future. The Americas, being ahead of Asia as recently as in 2008, are now far behind in third place. Some countries in South America though – Argentina and Mexico – have the highest growth rates in investments of all countries, 568% and 273% respectively.

Country by country, China ($54.4b) is followed by Germany ($41.2b) and the United States ($34.0b) in the top three by invested capital. The top three by investment by $ GDP is Germany (1.4%), Italy (0.79%) and China (0.55%). In the last year investments in the United States have grown faster than in China (51% and 39% respectively) but in the last five years the United States is way behind China in growth rate (30% and 88% respectively).

Comparing the different technologies, wind and solar are the dominant two. Wind investments increased by 34% in 2010 and accounted for 48% of all clean energy investments. Solar grew by 53%, now accounting for 40% of all investments. Biofuels, efficiency measures and other renewables scrape up the rest. By capacity though, small-hydro (80 GW) and biomass and waste-to-energy (65 GW) are both bigger than solar (43 GW), but all remain far smaller than wind power with a total of 193 GW installed as of 2010. The investments in wind power in China alone are a whopping $45b (as a comparison that is $8b more than ALL investments in Finland in 2009) and it had 43.1 GW installed capacity, while the EU had 84 GW and the United States 40 GW. In a moderate development scenario these figures are likely to be around 404 GW, 447 GW and 407 GW respectively in 2030 (although these figures are not directly comparable as the estimate is from a EWEA report with slightly different geographical definitions) and a global total of 1,800 GW.

Interesting figures are also those of spent and remaining clean energy stimulus funds. On average countries have spent 49% of their funds, ranging from 7% (Brazil) to 100% (France). Between European countries, the varying ambitions become very clear here – Germany has allocated a total of $15.2b in funds, while France and UK, although having somewhat smaller populations, have allocated only $2.1b and $3.4b respectively. The UK stands out when the growth figures are compared, certainly due to the current austerity measures. From 2009 to 2010 investments shrank by 70% compared to an increase by 100% in Germany and 124% in Italy (France 26%).  The sharp drop in the UK is worrying as policy goals there have been very ambitions in view of the comparatively low levels of renewable energy today.

It would be very interesting to see whether figures for the non-energy clean technology sector show the same pattern. Statistics for that sector are hard to come by as there is no clear definition of what should be counted as clean or environmental technology and that statistics agencies have only recently started collecting these data. Any insights on this are more than welcome.

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