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Jun 24, 2009

UNEP’s Global Trends in Sustainable Energy Investment 2009 documents significant surge in sustainable energy investments worldwide. Despite the worst ever financial crisis, the report notes increased use of renewables and advocates an eco-friendly approach to meet challenges like energy security and resource efficiency.

Global Trends in Sustainable Energy Investment 2009

Publisher: UNEP

The year 2008 was a milestone for sustainable energy investment, especially in view of the difficult overall investment climate. A total of $155 billion was invested in 2008 in clean energy companies and projects worldwide—not including large hydro, says this report.

UNEP 2009

Prepared for the UN Environment Programme’s (UNEP) Sustainable Energy Finance Initiative by global information provider New Energy Finance, the report notes that the 2008 investment is more than a four-fold increase since 2004 despite extremely difficult financial market conditions prevailing as a result of the global economic crisis.

Wind attracted the highest new investment ($51.8 billion), although solar made the largest gains ($33.5 billion) while biofuels dropped somewhat ($16.9 billion).

Investment in the second half of 2008 was down 17% on the first half, and down 23% on the final six months of 2007, a trend that has continued into 2009. One response to the global economic crisis has been announcements of stimulus packages with specific, multi-billion dollar provisions for energy efficiency up to boosts to renewable energies.

Growth shifts to the developing world

Developing countries surged forward 27% over 2007 to $36.6 billion, accounting for nearly one- third of global investments.

China led new investment in Asia, with an 18% increase over 2007 to $15.6 billion, mostly in new wind projects, and some biomass plants. Investment in India grew 12% to $4.1 billion in 2008. Brazil accounted for almost all renewable energy investment in Latin America in 2008, with ethanol receiving $10.8 billion, up 76% from 2007. Africa achieved a modest increase by comparison, with investments up 10% to approximately $1.1 billion.

Greening of stimulus packages

Sustainable energy investments are a core part of key government fiscal stimulus packages announced in recent months, accounting for an estimated $183 billion of commitments to date.

The US and China remain the leaders, each devoting roughly $67 billion, but South Korea’s package is the “greenest” with 20% devoted to clean energy. This green stimuli illustrates the political will of an increasing number of governments for securing future growth through greener economic development.

New investment in biofuels reached $16.9 billion, down 9% from 2007. Other renewable energies such as geothermal and mini-hydro were up 26% to $5.4 billion, but there was a 25% fall in investment in biomass and waste-to-energy to $7.9 billion. Private investment in new energy efficiency technologies was $1.8 billion, a fall of 33% on the previous year.

However, the energy efficiency sector recorded the second highest levels of venture capital and private equity investment (after solar), which will help companies develop the next generation of sustainable energy technologies.


The report concludes on the note that the drivers that have propelled investment in the sustainable energy sector so dramatically for the past five years are still at work – climate change, energy insecurity, fossil fuel depletion, new technologies etc.

There is also a strong core of demand for clean energy based on firm mandates: feed-in tariffs, renewable portfolio standards, renewable fuel standards, building codes, and efficiency regulations. In many markets clean energy also provides strong economic returns, particularly green jobs, even in a period of lower energy prices.

Annual investments in renewable energy, energy efficiency and carbon capture and storage need to reach $500 billion by 2020, rising to $590 billion by 2030. These levels of investment are not impossible to achieve, especially in view of the recent four year growth from $35 billion to $155 billion.

However, reaching them will require a further scale-up of societal commitments to a more sustainable, low-carbon energy paradigm.

Source : UNEP
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