Clean Energy Investing Hits All-Time High of $243 billion

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Small-scale distributed generation projects saw the most accelerated rate of investment growth in 2010. (Photo: Thomas Picard)
Small-scale distributed generation projects saw the most accelerated rate of investment growth in 2010. (Photo: Thomas Picard)

FINANCE

  • Clean energy backing jumps 30% in 2010, after recession low in 2009
  • China produces over 50% world’s photovoltaic modules, 50% wind capacity
  • Small-scale project investment increases more than 90%

In 2010, spending on clean energy rose 30% to $243 billion. The industry experienced a compound annual growth of over 35% in the four years to 2008, but the recession saw figures plummet in 2009.

The greatest investment segment in the 2010 clean energy rebound involved utility-scale projects such as solar parks and wind farms, reports the World Economic Forum.

This segment saw a near 20% jump, hitting close to $130 billion, while private equity investment and venture capital rose almost 30% to nearly $9 billion. Public market investment equally witnessed a degree of recovery from the recession, rising close to 20% to exceed $17 billion in 2010.

Though private and public financing made a comeback from the low-point of the recession, they have not seen a full recovery, remaining below previous figures of almost $12 billion in 2008 for private and almost $25 billion in 2007 for public backing.

Market Shift

There was a shift in regional clean energy markets with Oceania and Asia driving past the Americas in 2010 and measuring up to the EU, Africa and the Middle East. China was significantly in the lead regarding clean energy investment, with a 30% rise bringing the country’s investment to nearly $55 billion. More than 50% of the world’s photovoltaic modules are produced in China, and China also accounted for around 50% of new wind capacity installed worldwide in 2010.

Small-scale distributed generation projects saw the most accelerated rate of investment growth in 2010, with a colossal increase of over 90%, hitting just under $60 billion. Photovoltaic (PV) technology involves the conversion of solar radiation into electricity.

In Germany, 7.5 GW of new PV capacity was generated in 2010. The majority of this capacity came from small-scale rooftop systems in residential and commercial buildings. The main reason for the unprecedented rise in small-scale solar systems is the falling expense of PV modules, which has come about due to lower cost silicon, a major solar industry raw material.

Innovative Financing Strategies Spur Development

Clean energy investors and developers are getting inventive with methods of financing projects. Evidence of this new spirit of inventiveness in 2010 includes US and Turkish wind leases, financing of a wind farm off the coast of Denmark with a pension fund, and Italian solar energy financed by a project bond.

Governments and investors alike are aware of the necessity of continued investment in clean energy, especially in the face of uncertainty surrounding oil supply and prices. Awareness of environmental issues is likely to keep dedication to green investing strong. It is estimated that $500 billion would need to be invested in clean energy annually to limit global warming to 2°C without negatively impacting economic growth. The past two years alone have seen governments promise to invest almost $195 billion in clean energy.

The World Economic Forum’s Green Investing project, which was validated at the forum’s annual meeting in 2008, seeks to optimize investment in the battle against climate change. The project encourages alternatives to more precarious sources of energy, such as oil and nuclear energy, seen as risky due to fluctuating prices and environmental contamination respectively.

Key Statistics – Green Investing 2011 (source: World Economic Forum)

  • Corporate and State investment in clean energy technology research and development rose almost 25% to over $35 billion in 2010.
  • China saw the biggest investment increase for any one country, jumping 30% in 2010 to close to $55 billion.
  • Low natural gas prices of around $4 per million BTU in the US left little room for wind and solar energy.
  • Carbon emission rights traded on the global market rose 5% to $120 billion in 2010, but the volume of carbon traded fell 10% to under $7 billion.

By Ellsy O'Neill for
Ellsy O'Neill is a Paris-based writer, proofreader and translator. She covers industry, culture and current affairs.

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