Investment in Renewables Trumps Fossil Fuels for First Time Ever
Just the other week Mat posted on a report from Bloomberg New Energy Finance that predicted clean energy investment would double by 2020 (although the news was somewhat tempered by the fact that it would still be one third of what's really needed). Now a new analysis from the same group suggests that investment in clean energy has already topped investments in coal, natural gas and other fossil fuel infrastructure:
Electricity from the wind, sun, waves and biomass drew $187 billion last year compared with $157 billion for natural gas, oil and coal, according to calculations by Bloomberg New Energy Finance using the latest data. Accelerating installations of solar- and wind-power plants led to lower equipment prices, making clean energy more competitive with coal. “The progress of renewables has been nothing short of remarkable,” United Nations Environment Program Executive Secretary Achim Steiner said in an interview. “You have record investment in the midst of an economic and financial crisis.”
Yet again, though, the good news must be tempered with caution. As the Bloomberg press release states, uncertainty over climate talks; cuts to subsidies caused by government austerity drives; and tumbling equipment prices leading to a difficult business environment are all major challenges to this fledgling industry. Even successes in cutting energy consumption are playing a part in the uncertainty:
“In some countries the actual energy consumption has gone down because of the financial crisis, and that means it’s even more difficult to develop new projects,” said Ditlev Engel, chief executive officer of Vestas, which is the world’s biggest wind turbine maker.
Nevertheless, news that renewable energy is attracting more money than its fossil-fuel related counterparts can only be a good thing. With the IEA arguing we have 5 years to radically reprioritize our investments in energy infrastructure, this is a welcome piece of good news that we are beginning to warm up to the challenge.
Now we just need more of the same. Much more.