Investment in energy technology to hit $400 billion by 2030
The International Energy Agency (IEA) has projected that increasing investment in renewable energy technologies in the power sector will increase from $270 billion in 2015 to $400 billion in 2030.
According to the international energy watch dog in it’s latest edition of World Energy Outlook released yesterday, renewable energy investment was flat in 2014 at $270 billion, with new capacity of 128 GW installed, representing almost half of total capacity additions.
IEA disclosed that wind power accounted for 37 per cent and solar for almost another third.
It stated that renewable technologies were becoming increasingly cost competitive in a number of countries and circumstances, but public support schemes are still required to support deployment in many others.
It added that renewable-based power generation capacity is estimated to have increased by 128 GW in 2014, of which 37 per cent is wind power, almost one-third solar power and more than a quarter from hydropower.
This, it added amounted to more than 45 per cent world power generation capacity additions in 2014, consistent with the general upward trend in recent years.
It added that the growth in wind capacity continued to be led by onshore installations (although offshore has also grown rapidly).
The report noted that China remains the largest wind power market, with 20 GW of new capacity. “Germany installed more than 5 GW of Renewable technologies are becoming increasingly cost competitive in a number of countries and circumstances, but public support schemes are still required to support deployment in many others. Renewables-based power generation capacity is estimated to have increased by 128 GW in 2014, of which 37 per cent is wind power, almost one-third solar power and more than a quarter from hydropower.
This amounted to more than 45 per cent of world power generation capacity additions in 2014, consistent with the general upward trend in recent years. The growth in wind capacity continued to be led by onshore installations (although offshore has also grown rapidly). China remains the largest wind power market, with 20 GW of new capacity. Germany installed more than 5 GW of wind 12 capacity”.
It stated that lower oil prices proved to be a challenge for other 13 forms of renewable energy, including biofuels in transport and renewable heat, as the latter competes directly with natural gas heating (the price of which is still, in many cases, linked to the oil price).
The report said that while biofuels face challenges arising from lower oil prices, some other developments served to improve their outlook: to counter current bleak prospects for biofuels in Brazil, the government increased the ethanol blending rate from 25 per cent to 27 per cent and that for biodiesel from five per cent to seven per cent , and increased gasoline taxes, while Argentina and Indonesia raised their biofuel mandates.
The IEA report highlights the need for climate pledges for COP21 to be viewed as the basis from which to create a “virtuous circle” of increasing ambition, and advocates, as its second pillar, a five-year review cycle to test the scope for further action. Both the situation and the solutions are evolving rapidly: the world’s shrinking “carbon budget” means that any delay in taking action can be costly, while the pace of energy sector innovation means that a five-year review would allow national targets to keep up with events and help build investor confidence.
As its third pillar, the IEA recommends that the goal of keeping the increase in long-term average global temperatures to below two degrees Celsius (2 °C) also be expressed as a long-term greenhouse-gas emissions target, making it more straightforward to apply in the energy sector. Doing so would help anchor future expectations, guide investment decisions, provide an incentive to develop new technologies, drive needed market reforms and spur the implementation of strong domestic policies, such as carbon pricing – all of which are necessary to meet the 2 °C goal.
The final pillar proposed by the IEA report is that the COP21 agreement establish a strong process for tracking progress in the energy sector. Tracking national progress would both provide clear evidence of results, reassuring the international community that others are acting diligently, and identify countries that are struggling with implementation, enabling assistance to be provided if needed. In recognition of this need, the IEA report sets out appropriate metrics to monitor energy sector decarbonisation.
“Any climate agreement reached at COP21 must have the energy sector at its core or risk being judged a failure,” said IEA Chief Economist Fatih Birol. “Climate pledges submitted for COP21 are an important first step to meeting our climate goal, and our report shows that they will have a material impact on future energy trends.”
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