This year’s REN21 Renewables Global Status Report (GSR) based on 2016 data showed record new additions of installed renewable energy (RE) capacity and rapidly falling costs especially for solar PV and wind power. Find out below where the world is at in terms of RE investment and what policies need to be implemented to spur further growth.
Highlights from the report
There were a number of ground-breaking statistics noted by the report, but here are the most noteworthy from an investment perspective:
- Newly installed renewable power capacity set new records in 2016, with 161 gigawatts (GW) added, increasing the global total by almost 9% relative to 2015.
- Solar PV was the star performer in 2016, accounting for around 47% of the total additions, followed by wind power at 34% and hydropower at 15.5%.
- For the fifth year in a row, investment in new renewable power capacity (including all hydropower) was roughly double the investment in fossil fuel generating capacity, reaching USD 249.8 billion. The world now adds more renewable power capacity annually than it adds in net new capacity from all fossil fuels combined.
- Cost for electricity from solar PV and wind is rapidly falling. Record-breaking tenders for solar PV occurred in Argentina, Chile, India, Jordan, Saudi Arabia and the United Arab Emirates, with bids in some markets below USD 0.03 per kilowatt-hour (kWh). Parallel developments in the wind power sector saw record low bids in several countries, including Chile, India, Mexico and Morocco. Record lows in offshore wind power tenders in Denmark and the Netherlands brought Europe’s industry closer to its goal to produce offshore wind power more cheaply than coal by 2025.
What’s also interesting about this report is that in 2015, developing and emerging economies overtook industrialised countries in renewable energy investment for the first time (although industrialised countries regained the lead in 2016, despite the fact that China remained the single largest investor). This discredits the idea that renewable energy is too expensive - in many cases, renewable power is now the cheapest option.
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Global RE investment fell
Although global investment in new renewable power and fuel capacity was roughly twice that of fossil fuels, investments in new renewable energy installations (not including hydropower larger than 50 MW) were down 23% compared to 2015.
Renewable energy investment fell 30% in developing countries, to USD 116.6 billion, while RE investment in developed countries fell 14% to USD 125 billion. The overall lower level of investment in 2016 was due largely to slowing in Chinese and Japanese markets and in other emerging economies, notably India and South Africa (the latter due mainly to a delay in renewable energy auctions).
China remains the largest investor in RE, making up 32% of all financing of renewable energy worldwide (excluding hydropower projects larger than 50 MW).
Policy support is need to increase RE investment
Where power generation is concerned, many countries are changing from feed-in policies to auctions to help implement large-scale renewable energy projects. Auctions have greatly reduced prices of renewable power, although in some cases such as South Africa, scheduling delays increased market insecurity and caused severe problems for the renewables industry. However, strategic energy planning and long-term predictability of auction schedules can create reliable market opportunities.
For quickest improvements in access to energy, policy makers also need to allow off-grid, decentralised markets to be established. This can be achieved through policies such as creating "specific distributed renewable energy targets; integrating stand-alone solutions, in particular mini-grids, into national electrification plans; establishing a clear policy framework for accessing finance that reflects this newer approach; and measures for upholding quality standards."
Good growth overall, but there’s still room for improvement.
Source: REN21 Renewables Global Status Report (GSR) 2017. Renewable Energy Policy Network (REN21), Paris. www.ren21.net
To download the full report, visit http://www.ren21.net/status-of-renewables/global-status-report/
Natalie Mayer is an independent writer and editor with 12 years’ experience. She has a B.Com in Economics (UCT) and a Master’s in Sustainable Development (University of Stellenbosch) and has worked for a number of high-profile clients, such as the United Nations Educational, Scientific and Cultural Organization (UNESCO), Nedbank, the Sustainability Institute, Counterpoint Asset Management, Pearson Education, and of course, Sharenet - to name a few. Natalie has written and edited research papers, textbooks, print and online articles, and website content on a vast array of topics, including finance and money matters, education, property, social and environmental issues. She is passionate about communication that meets the needs of the audience, and her particular strength is to bring clarity to text.