Global clean energy investment fell 11 percent to $254 billion, and renewable power generating capacity additions declined by 1 percent in 2013, according to research released by The Pew Charitable Trusts. The report, Who's Winning the Clean Energy Race? 2013 Edition, finds that among the world's top industrialized economies, known as the Group of 20, or G-20, China remains the leading destination for investors.
"Despite a slow recovery from a global recession and damaging policy uncertainty, the clean energy industry has established itself as a $250 billion component of the world economy," said Phyllis Cuttino, director of Pew's clean energy program. "While there was an overall decline in investment, there are signs that the sector is reaping the rewards of becoming a more mature industry. Prices for technologies continue to drop, making them increasingly competitive with conventional power sources. Key clean energy stock indexes rose significantly in 2013, with public market financing up by 176 percent. Markets for clean energy technologies in fast-growing developing countries are prospering, because these economies view distributed generation as an opportunity to avoid investments in costly transmission systems."
Among the report's major findings:
The curtailment of incentives in Europe weighed heavily on worldwide investment, while uncertainty about U.S. policy in the wind sector dragged down overall renewable energy capacity additions. In a study of contrasts, investment in the larger and more established markets of G-20 countries declined by 16 percent as investment in non-G-20 markets grew by 15 percent, with promising sectors emerging in countries such as Chile and Uruguay. Three G-20 countries—Japan, Canada, and the United Kingdom—saw an increase in clean energy investment in 2013.
Technology prices continued to decrease in 2013, including permitting and equipment costs. However, lower investment levels led to a 1 percent reduction in installed capacity. With 87 gigawatts, or GW, of new clean power, worldwide capacity is now 735 GW.
Renewable energy investment in the Asia/Oceania region, which includes Australia, China, India, Indonesia, Japan, and South Korea continued to grow steadily in 2013, increasing 10 percent to $102 billion. China remains the leading regional and global market, attracting $54.2 billion in 2013. Its clean energy sector is shifting from an exclusive focus on exports toward greater domestic consumption, with a nearly fourfold growth in solar power to an unprecedented 12.1 GW. With an additional 14.1 GW of wind, China installed more than 35 GW of new renewable power generating capacity, a record.
Japan experienced the fastest investment growth in the world, increasing 80 percent to almost $29 billion and moving to third from fifth place among G-20 nations. This reflects its priority on renewable power since the Fukushima nuclear disaster. Most striking was a near doubling in the country's solar sector, which received $28 billion in investment, almost 30 percent of the G-20 total.
The United States held second place among G-20 nations despite a decline in investments in 2013 of 9 percent to $36.7 billion. Although wind finance was steady, installations collapsed with the expiration of the production tax credit. Still, a record 4.3 GW of solar was installed, and the U.S. continued to garner world-leading levels in the advanced biofuels and energy efficient/low-carbon technology subsectors. It also remains the dominant recipient for public market and venture capital/private equity investments, attracting $6.8 billion and $2.2 billion, respectively. The U.S. sector was surprisingly resilient, given the lack of progress on national energy policy and uncertainty about the direction of global warming policies.
Canada moved to seventh from 12th among the G-20 as investment grew 45 percent to $6.5 billion. The wind sector was especially strong, with an increase in financing of more than 40 percent to $3.6 billion. The solar sector also recorded impressive growth, attracting $2.5 billion.
Clean energy finance in the European region—comprising Europe, the Middle East, and Africa—slid sharply for the second consecutive year, falling 42 percent to $55 billion. Investment plunged in once-vibrant markets, with levels in Germany down 55 percent and Italy down 75 percent.
However, the United Kingdom experienced 13 percent growth, to $12.4 billion, in 2013, bringing it to fourth among G-20 countries. Investments in the wind sector increased by nearly 50 percent to $5.9 billion on the strength of offshore projects and increased activity in public market financing.
Technologies: Solar outpaces wind
For the first time, more solar than wind energy was installed globally. Forty GW of solar generating capacity were added, an increase of 29 percent, raising the total to 144 GW. Wind capacity additions declined by more than 40 percent; the United States accounted for more than half of that drop. With an additional 27 GW installed, wind power capacity reached 307 GW globally. Current projections indicate that solar will be the leading clean energy technology in both investment and capacity for the next several years. Energy efficient/low-carbon technologies, which include smart meters and energy storage devices, grew 15 percent to $3.9 billion.
Who's Winning the Clean Energy Race? 2013 Edition examines how nations are faring in the increasingly stiff competition for private funding among the world's leading economies. The primary focus is on investment, which drives innovation, commercialization, manufacturing, and installation of clean energy technologies. Investment in G-20 countries accounted for more than 95 percent of the global total. Amounts are listed in U.S. dollars.