Newspaper article

A Record-Setting Year for Renewables, as Developing Countries Take the Lead

Newspaper article

A Record-Setting Year for Renewables, as Developing Countries Take the Lead

Article excerpt

Despite a continuing price slide for coal, oil and natural gas -- and no decline in subsidies for their use -- 2015 saw record global growth in new electric generating capacity powered by the sun, wind and other renewable sources.

And for the first time, the world's developing economies led the way, investing more as a group than the wealthy industrial states, according to a new analysis from the respected Renewable Energy Policy Network for the 21st Century (REN21).

The world added roughly 147 gigawatts of renewable generating capacity last year, REN21 found. That's more than in any previous year, and once again the great bulk of new capacity -- 77 percent -- was driven by solar and wind energy, which had set records in 2014 as well.

Of the remainder, the largest contribution came from hydropower (whose installed capacity grew by 28 gigawatts), with biomass, biofuels, geothermal and miscellaneous other technologies rounding out the picture.

In all, renewably sourced electric generation is now capable of meeting about 24 percent of the world's demand for electricity, according to REN21, a research and policy collaborative based in the United Nations Environment Programme.

And year after year, capacity expansion in the renewables sector is outpacing new plants powered by coal, oil, natural gas and nuclear fission combined.

There's jobs growth in renewable power, too -- up 5 percent in 2015 to 8.1 million worldwide.

Cost competitive

A main driver of this trend, REN21 says, is that "first and foremost, renewables are now cost competitive with fossil fuels in many markets," even with the fossils priced at or near historic lows and continuing huge subsidies for their use. (REN21 calculates that fossil fuels receive $490 billion a year in subsidies worldwide, compared to $135 billion for renewables, but most of that is for operating support, not building new capacity.)

[G]overnment leadership continues to play a key role in driving the growth of renewables, particularly wind and solar, in the power sector. As of early 2016, 173 countries had renewable energy targets in place and 146 countries had support policies. Cities, communities and companies are leading the rapidly expanding "100% renewable" movement, playing a vital role in advancing the global energy transition.

Additional growth factors include better access to financing, concerns about energy security and the environment and the growing demand for modern energy services in developing and emerging economies.

REN21 also reports that 2015 was a year of record investment in renewables, reaching $286 billion worldwide in renewable power and fuels; the figure is even higher if large hydropower operations are included. And this is happening despite financial factors that clearly discourage some investors while encouraging others:

Global investment also climbed to a new record level, in spite of the plunge in fossil fuel prices, the strength of the U.S. dollar (which reduced the dollar value of non-dollar investments), the continued weakness of the European economy and further declines in per unit costs of wind and solar PV. For the sixth consecutive year, renewables outpaced fossil fuels for net investment in power capacity additions.

Private investors stepped up their commitments to renewable energy significantly during 2015. The year witnessed both an increase in the number of large banks active in the renewables sector and an increase in loan size, with major new commitments from international investment firms to renewables and energy efficiency. …

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