Clean Energy Funding Trumps Fossil Fuels  

The New York Times reports that investment in renewable energy outstripped that in fossil fuels last year - Clean Energy Funding Trumps Fossil Fuels.

Global investors spent about $250 billion building new power capacity in 2008, and for the first time the lion’s share of that money went to renewable sources, according to the United Nations Environment Program.

Renewable sources accounted for 56 percent of investment dollars, worth $140 billion, while investment in fossil fuel technologies was $110 billion, the U.N. program said in a report, Global Trends in Sustainable Energy Investment 2009, released on Wednesday and produced in collaboration with New Energy Finance, a research company based in London.

Large hydropower projects, wind, solar and geothermal were among renewable sources covered by the report. Fossil fuels included projects like building new coal plants in China.

Even so, the long life of power plants meant it would be “some time” before renewable energy dominated the generation mix. Renewable energy still only accounted for 6.2 percent of total power sector capacity in 2008, the U.N. program said, and even after earning more than half of overall investments last year, renewables accounted for just 41 percent of total added capacity.

Furthermore, the current economic crisis weighed heavily in 2008 compared to 2007.

Investors spent just 5 percent more on clean energy in 2008 compared to three previous years of growth exceeding 50 percent. Investment in the United States fell by 8 percent and in Europe it grew by 2 percent, U.N. program officials said.

European and American investment was down because project finance dried up and because tax credits are mostly ineffective in a downturn, the report said.

But the U.N. report highlighted how investment in developing countries in 2008 had surged forward by 27 percent to $36.6 billion, and now accounted for nearly one third of global investments. “Bright points” last year included the growth of wind power in China and a rise in spending on geothermal energy in countries including Australia, Japan and Kenya, according to Achim Steiner, the executive director of the United National Environment Program.

Brazil, Chile, Peru and the Philippines had brought in, or were poised to introduce, policies and laws fostering clean energy, he said. China led new investment in Asia while Brazil accounted for almost all renewable energy investment in that region.

Overall, the wind sector attracted the most new investment, with a total of $51.8 billion, representing growth of 1 percent compared to 2007. Solar made large gains, recording growth of 49 percent to reach total investment of $33.5 billion. Geothermal was the highest growth sector, with investment up 149 percent to $2.2 billion, but biofuels dropped by 9 percent to $16.9 billion.

Mr. Steiner said so-called “green new deals” offered by countries like China, Japan, Korea, European countries and the United States “contain some serious clean energy provisions” that “will help support the market.”

But he said the biggest stimulus to clean energy investment would be agreement among nations at a meeting in Copenhagen in Denmark in December, aimed at creating a successor treaty to the Kyoto Protocol.

A deal at Copenhagen “can bring certainty to the carbon markets, one that can unleash transformative investments in lean and clean green tech,” he said.