“We have entered a new era of clean energy growth that can fuel a future of opportunity and greater prosperity for every person on the planet. Governments, businesses, and investors around the world are realizing that the progression to low-emission, climate-resilient growth is inevitable, beneficial, and already underway.” Ban Ki-moon, Secretary-General, United Nations
According to the United Nations-sponsored report, ‘Global Trends in Renewable Energy Investment 2016’, investment in renewable power capacity ($265.8 billion) was more than double the investment in new coal and gas generation (estimated $130 billion in 2015).
Unfortunately, the fossil fuel-powered generation plants already built meant that new, clean renewable energy technologies only accounted for just over 10% of world electricity last year. Still, in 2015, this did prevent some 1.5 gigatonnes of CO2 from escaping into the atmosphere.
If this trend in renewable energy investment continues, it bodes well for entrepreneurs and others who are in the business of making the world a better place for our children, grandkids, and generations to come.
As described more fully in the UN report, even though 2015 produced a record for overall investment, the sky is far from entirely blue. The United Nations climate change conference in Paris in December 2015, known as COP21, produced an unprecedented agreement among 195 countries to act for zero net emissions in the second half of the century. In spite of the COP 21 agreement, the global emission trend remains worrying. Energy-related emissions are not forecast to peak until the late 2020s, at the earliest.Watch Full Movie Online Streaming Online and Download
So far, the drivers of investment in renewables, including climate change policies and improving cost-competitiveness, have been more than sufficient to enable renewables to keep increasing their share of world electricity generation.
But in a case of two steps forward and one step back, many governments are doing away with subsidies. For example, a 10% renewable energy tax credit expires at the end of the year in New Mexico. New Mexico joins other states such as North Carolina, which once boasted the nation’s most generous tax credit for solar installation. Others are in line to see the credits sunset over the next two years, and some states also have let corporate tax credits for solar expire.
The UK’s Guardian Newspaper is one of the world’s most respected and authoritative publications on Climate Change and the environment in general. The Guardian has reported extensively on the slashing of some UK incentives to install solar panels, and ending support for UK onshore wind energy, on the basis that subsidizing the construction of green energy was adding too much to energy bills. (The UK government does not subsidize renewable generation directly but allows for incentives to some technologies through additions to consumer bills.)
Despite these setbacks, the latest figures from Bloomberg New Energy Finance show worldwide investment in renewable energy growing in 2015 to nearly six times its 2004 total – a new record of one-third of a trillion dollars. The increase in this investment is even more exciting when we consider what Bloomberg identified as four significant influences that may have dampened enthusiasm for investing in renewables:
- Further declines in the cost of solar photovoltaics, meaning that more capacity could be installed for the same price;
- The strength of the US currency, reducing the dollar value of non-dollar investment;
- The continued weakness of the European economy, formerly the powerhouse of renewable energy investment, and perhaps most significantly;
- The plunge in fossil fuel commodity prices. Oil has plunged 67% from $112.36 to $37.28 per barrel. Natural gas in the US fell to its lowest price, ever.
Global clean energy investment 2004-15, $bn
Renewable energy is an important investment even though the price of oil has plunged. It is more valuable to stabilize the costs of energy for years to come than to be tethered to the volatile, unpredictable price of oil. The US government’s International Energy Agency (IEA) significantly increased its projections for future oil prices in this year’s report due to production costs and the changing outlook for demand. The IEA now expects crude oil to average $100 per barrel over the next two decades and more than $200 per barrel in 2030, in nominal terms.
Last year’s forecast estimated that a 2030 barrel of oil would amount to only $108. If oil reaches $200.00 a barrel, it will be economically devastating for many developing countries.
My hope is that the rich companies who produce fossil-fuel based energy embrace renewables by making meaningful investments. There are many companies that are working hard to produce solutions that can provide us clean, green, and environmentally-friendly sources of energy.
There is no reason we cannot all work together for the betterment of mankind.