Global investment in renewables to double in 10 years
A new report from Bloomberg New Energy Finance (BNEF) says investment in renewables will increase to around $395 billion per year by 2020, effectively doubling investment.
The key areas of growth in this period will mirror the main regions of growth financially, with areas like Indonesia, Vietnam, Thailand, the Middle East, Africa and Latin America all increasing production. China is also taking renewables very seriously, with it set to overtake the EU in the renewables asset finance market by 2014.
Post-2020, the prospects for renewables are even better, with improvements and cost reduction meaning solar and wind energy will be competitive with fossil fuels in terms of energy production cost. Guy Turner, director of commodity market research at BNEF concludes that, "Once you get to post-2020 you start to get growth driven by raw economics rather than policies. Solar will continue to come down in price while better blades and energy storage will make onshore wind competitive at the same time as fossil fuel prices are likely to rise".
“Then you will start to see a step change in renewable energy economics where it will make more sense for people to invest in clean energy,” he added. Even so, it is predicted that renewables will only account for 15.7 per cent of total energy production, largely due to the fact that energy use will be increasing rapidly anyway, and fossil fuels will fill that gap as well as renewables. The problems associated with transitioning to renewable transport and heat generation mean it will be difficult to increase the share of renewables in this medium term future.
Turner adds, "With electricity generation we can move to lots of renewables, but electricity only accounts for 30 per cent of global energy, there are renewable options for heat and transport, but there are major challenges to rolling them out."