Solar and wind continue to dominate investment in new renewable capacity. Global use of solar and wind energy grew significantly in 2012. Solar power consumption increased by 58 percent, to 93 terrawatt-hours (TWh), while wind power increased by 18.1 percent, to 521.3 TWh.

Global investment in solar energy in 2012 was $140.4 billion, an 11 percent decline from 2011, and wind investment was down 10.1 percent, to $80.3 billion. Due to lower costs for both technologies, however, total installed capacities still grew sharply.

Solar and wind energy investments were down slightly in 2012, though installed capacities still grew sharply (Source: BNEF).

Solar photovoltaic (PV) installed capacity grew by 41 percent in 2012, reaching 100 gigawatts (GW). Installed PV capacity has grown by 900 percent since 2007. The countries with the most installed PV capacity today are Germany (32.4 GW), Italy (16.4 GW), the United States (7.2 GW), and China (7.0 GW). Concentrating solar thermal power (CSP) capacity reached 2.55 GW, with 970 megawatts (MW) alone added in 2012.

Europe remains dominant in solar, accounting for 76 percent of global solar power use in 2012. Germany alone accounted for 30 percent of the world’s solar power consumption, and Italy added the third most capacity of any country in 2012 (3.4 GW). Spain added the most CSP capacity (950 MW) in 2012 as well. However, Italy reached the subsidy cap for its feed-in tariff (FIT) program in June 2013, while Spain recently made a retroactive change in its FIT policies, meaning that growth in solar energy will likely slow in these countries in the near future.

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China, feed-in tariff, Germany, Italy, japan, renewable energy, renewable energy investment, renewable energy policy, solar power, Spain, United States, wind power

More than a year-and-a-half after the tsunami and resulting nuclear disaster at Fukushima, Japanese policymakers are trying to figure out what to do about Japan’s power-generation future. In September, the government released a document titled “Revolutionary Energy and Environment Strategy,” which proposes to eliminate all nuclear generation in Japan by 2040. While the general public continues to support a transition away from nuclear power in Japan, business leaders have argued that such a change would increase energy costs, thereby making Japanese companies less competitive in an already increasingly competitive East Asian market.

Japan pays incredibly high rates to import LNG, which has become only worse since Fukushima and is driving up energy prices.

Close to one-third of Japan’s power generation came from nuclear prior to Fukushima, and before the tsunami, there had even been discussion of increasing the share of nuclear to 50 percent with hope that this would help the country reduce its greenhouse gas emissions. Now that much of the population wants to phase-out nuclear by 2040, Japan faces an interesting question of what to do with its power sector in the future.

One solution, and what Japan has largely done in the short-term, is to rely more heavily on fossil fuels. After Fukushima, Japan began importing more natural gas and oil to make up for its loss of nuclear generation, and the share of fossil fuel generation in its electricity mix rose to 73 percent (a level not seen in decades) by early 2012. The problems with this increase, however, are numerous.

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electricity, energy policy, feed-in tariff, japan, natural gas, nuclear, oil, renewable energy, sustainability

Last month, Farooq Abdullah, India’s Union Minister for New and Renewable Energy, announced that the planned Delhi-Mumbai Industrial Corridor (DMIC) would be “totally green”. The corridor is aimed at strengthening the region’s infrastructure to attract foreign and real estate investment and jump-start local commerce. Minister Abdullah’s commitment to making the project environmentally sustainable is a positive sign for India’s development path given the potential boom in industry, commercial activity, and power production if the corridor is successful.

source: MNRE

Wind turbines in Gujarat

The DMIC is a US$90 billion infrastructure project funded by the governments of India and Japan to connect the political and financial capitals of India through freight rail, roads, and new power facilities. Plans to implement the massive DMIC project have been underway since a 2006 Memorandum of Understanding between India and Japan, but progress to date has been slow. Recent large infrastructure projects have a mixed record in the country, with bureaucratic roadblocks, multiple permitting requirements, and in some cases corruption and bribery, sometimes blocking plans.

Many of the barriers to general infrastructure development are the same barriers that stand in the way of renewable energy projects, despite a strong demonstrated political will to promote investment in renewables. Just this October, reports emerged that one of India’s largest solar power projects, the 125 megawatt (MW) Shivajinagar Sakri solar plant being implemented by the Maharashtra State Power Generation Company, has been blocked by the Forest Department of Maharashtra, which has laid claim to 180 of the total 350 hectares set aside for the project. This major administrative hurdle demonstrates the lack of coordination between agencies responsible for approving renewable energy projects, especially at this late stage of project development when major certifications and loans for the project have already been granted.

The future of renewable energy in India, including its role in the DMIC, will depend largely on the ability of the country’s policy and regulatory infrastructure to streamline administrative procedures and create a welcoming environment for new investments. India’s federal government and several state governments have established a multitude of laws and regulations to promote renewable energy, including feed-in tariffs (FiTs), renewable purchase obligations (RPOs), generation-based incentives, capital subsidies, accelerated depreciation, and tax incentives. Renewable energy capacity in India has grown rapidly in recent years, due in part to these measures. India ranks fifth in the world in installed wind capacity, with around 15 GW of wind capacity in August 2011. Installed solar capacity is growing rapidly and is expected to reach 200 MW by the beginning of 2012, with an ambitious national target of 20 GW of solar capacity by 2022.

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energy infrastructure, feed-in tariff, finance, India, renewable energy finance, renewable energy investment, renewable energy policy

Solar Panels installed on the roof of the 2010 World Expo Theme Pavilion in Shanghai

By Qiong Xie

China’s energy regulator, the National Development and Reform Commission (NDRC), announced its first nationwide feed-in-tariff (FiT) for solar photovoltaic (PV) installation projects on July 24th, 2011, in an effort that it would boost its domestic solar industry and increase the share of solar power in China’s energy portfolio. The unveiling of the feed-in-tariff policy has shed light on China’s goal to achieve 50 gigawatt (GW) of solar installation by 2020.

Before the first nationwide FiT for solar PV projects was announced this past July, the Chinese government had sponsored two rounds of public tender since 2009. The first public tender in 2009 ended with a single solar project: a 10 megawatt (MW) installed capacity solar power plant in Dun Huang, Gansu province. The Dun Huang tender provides the solar developers with a payment of RMB1.09 (RMB is the abbreviation of Chinese currency, RMB1.09 is equal to approximately US $0.170, including tax) per kilowatt-hour (kWh) for their solar power feed into the grid. Besides, China initiated its second round of public tender for concession solar power projects in 2010. At the end of this tender, 13 projects were announced with a total installed solar power capacity of 280 MW. To be more specific, it is reported that the winning bids ranged from RMB 0.728 per kWh (approximately $ 0.114, including tax) to RMB 0.991 (approximately $0.155, including tax). But the bid price was much lower than some of the solar industry participants expected as RMB 1.1 (approximately $ 0.172, including tax) thus it discouraged energy power companies and private solar equipment suppliers’ investment enthusiasm.

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12th Five-Year Plan, China, feed-in tariff, grid-access, NDRC, solar power, solar radiation, Township Electrification Program, wind energy

Part 2: Clear Policy Signals To Develop Renewable Energies

This series of blogs explores current mechanisms in place to finance renewable energies in the Dominican Republic. Be sure not to miss Part 1 on the Dominican Republic’s clean energy entrepreneurs.

Far from the media spotlight, the Dominican Republic is paving its way to a cleaner energy sector. Over the past ten years, the government has published a large set of policies and laws to incentivize renewable energy production. Lifting clean-energy development to a constitutional objective, Article 67 of the Constitution of 2010 reads, “The State shall promote in the public and the private sector the use of clean alternative technologies to preserve the environment.

Law 57-07 to incentivize the production of energy from renewable sources

A whole corpus of domestic laws recognizing the necessity to transition the energy sector to cleaner fuels has been instituted during the past decade, culminating in 2007 with the publication of Law 57-07 on Renewable Sources of Energy Incentives and its Special Regimes and its appending regulation, which sets a target of 25 percent of renewable energies in the country’s final electricity consumption by 2025.  The law also aims at “opening the door” to sustained commercial financing for the renewable sector through financial incentives such as tax exemptions, a feed-in-tariff (FiT), and a national fund for renewable energies, discussed in more detail in this blog series.

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clean energy, climate finance, Dominican Republic, energy policy, environmental policy, feed-in tariff, finance, green power, low-carbon, renewable energies, renewable energy finance, renewable energy investment, renewable energy sources