Report: 2015 was a banner year for clean energy
Renewable energy is going gangbusters, according to a major new UN-backed report, with the world’s investors pouring a record $286 billion into the sector in 2015. That’s a 5 percent increase on the previous year — and, thanks in part to the dramatic slump in oil prices, it’s more than double the amount invested in the fossil-fuel energy sector over the same period.
In total, almost 62 percent of all new energy capacity added in 2015 came from renewable sources, the report found — the first time renewables have made up a majority of new capacity — with institutional investors and major banks flocking to provide capital for ever-larger wind and solar projects. In total, utility-scale projects accounted for $199 billion of the total investment in the sector, while small-scale distributed wind and solar projects accounted for $67.4 billion.
"The term ‘niche product’ no longer applies to renewables," Ulf Moslener, one of the report's authors, told Reuters. "Investments are becoming less expensive, due to falling equipment costs, which will also enable further growth, especially in light of the new momentum from the Paris climate summit goals.”
The report’s findings aren’t all good news: while renewable energy has a bright future, at present it still accounts for a relatively small amount of the global energy supply. Clean generation accounted for just 10.3 percent of the world’s total energy output in 2015, the report found. That’s enough to prevent the emission of 1.5 metric giga-tons of carbon dioxide over the course of the year — but thanks to the sheer volume of coal, gas, and other conventional power plants already operating around the world, it will likely take until at least the late 2020s before the planet’s energy-related carbon output peaks. “Renewables are playing a very, very long game of catch-up at the moment,” notes the Washington Post’s Chris Mooney.
Remarkably, the UNEP report found, the progress that’s being made is chiefly happening in emerging economies rather than the developed world. For the first time, 2015 saw the developing world outpace developed nations in terms of clean-energy investment. China alone invested $103 billion — more than the combined total investment of Europe and the United States — and along with India and Brazil accounted for 55 percent of total clean-energy investment for the period. Smaller emerging economies also posted huge increases in renewable-energy spending: South Africa, for instance, saw its investment climbing an eye-popping 329 percent, to $4.5 billion.
The rise of renewable-energy investment in the developing world is partly the result of cheaper technologies making clean energy more affordable. The cost per megawatt of silicon-based solar energy has fallen 61 percent since late 2009, to a global average of $122, the report notes, and a number of companies are already signing advance supply deals with pricing as low as $58.50 per megawatt. “No longer can renewable opponents claim clean energy is only affordable for rich European nations when the likes of China, Mexico and India roll out green energy as fast as factories can manufacture the necessary components,” writes BusinessGreen’s Madeleine Cuff.
The big unanswered question, though, is whether the world’s developed nations will prove willing to cede the initiative on renewable energy to emerging economies, or will seek ways to breathe new life into their own clean-energy sectors. Much of that will depend on the decisions made by policymakers, argues U.N. Secretary-General Ban Ki-moon in the report’s introduction. “For the low-carbon transformation of the global economy to succeed, governments will need to create a level playing field for clean energy investment,” he writes. Carbon pricing, the scrapping of fossil-fuel subsidies, and stronger and more stable regulatory and investment frameworks will have important roles to play in that process, Ban adds.
The bottom line is that the UNEP report offers perhaps the most convincing evidence yet that the renewable energy sector has what it takes to evolve into a cost-effective, scalable alternative to conventional generation. Investors are already jumping on the bandwagon in record numbers; for real change, however, policymakers will have to follow suit, and work not just to spur further investment, but to dial back the use of legacy generation technologies. “If you really want emissions to go down, it is not sufficient to just crank up renewables but — at some point — you have to stop using coal-fired and gas-fired power plants,” says Moslener, the report co-author. "This is a challenge where policymakers will also have to play a role."
Ben Whitford is the US correspondent for The Ecologist. He has written for the Guardian, Newsweek, Mother Jones, Slate, and many other publications.