Having just returned from my second clean energy finance summit this year, I was relieved to find that despite the rumors, the renewable energy industries aren’t dying—indeed they’re booming.
In 2012, according to Bloomberg New Energy Finance, $269 billion flowed into the clean energy sector worldwide—a big number by any standard. Total global investment in renewable generating capacity now lags total investment in coal, oil, and gas generation combined by only 25 percent. With that much money you could purchase Google or Microsoft outright.
While clean energy investment in 2012 was down 11 percent from 2011, it is still 44 percent above the 2009 figure and 230 percent higher than it was in 2005. Moreover, virtually all of the decline stems from the sharply falling prices for solar and wind equipment—a trend that in the long run will accelerate growth. While clean energy growth has understandably slowed from the extraordinary double-digit rates of the past decade, this remains one of the world’s largest and most dynamic industrial sectors.
The one dark cloud that hovered over both conferences (the Cleantech Investor Summit in Palm Springs and the Bloomberg New Energy Finance Summit in New York) was the United States, where declining government support and the uncertainty generated by a dysfunctional Congress led to a sharp decline in financing in 2012. While the falling investment figures do presage a slowdown inU.S. clean energy growth in the next two years, it is still notable that theU.S. added more renewable capacity than any other single country last year.
Excluding theUnited States, global investment in renewable energy would have increased significantly in 2012. China, for example, is continuing to power global markets, with investment up a robust 20 percent to $65 billion in 2012.Chinais also playing a big role in driving down the cost of renewables while spurring robust growth in other emerging market countries such asIndiaandSouth Africa.
Japan’s clean energy investment was meanwhile up a remarkable 75 percent in 2012, driven by the government’s response to the post-Fukushima collapse of the country’s nuclear industry. And while Germany’s investment declined last year, renewable power generation continued to soar, reaching 24 percent of electricity production, up from 4 percent in 2000.
So, despite all the recent media focus on the rise of shale gas and unconventional oil inNorth America, the bigger energy story is a global one: New technologies and hundreds of billions of dollars of investment capital are steadily laying the foundation for a low-carbon global economy.
Chris Flavin is President Emeritus at Worldwatch Institute.