New report: Record new renewable power capacity added at lower cost

renewables_report.jpg. According to the report, investment in renewables capacity was roughly double that in fossil fuel generation
renewables_report.jpg. According to the report, investment in renewables capacity was roughly double that in fossil fuel generation

As the cost of clean technology continues to fall, the world added record levels of renewable energy capacity in 2016, at an investment level 23 per cent lower than the previous year, according to new research published on April 6th, 2017 by UN Environment, the Frankfurt School-UNEP Collaborating Centre, and Bloomberg New Energy Finance.

“Global Trends in Renewable Energy Investment 2017” finds that wind, solar, biomass and waste-to-energy, geothermal, small hydro and marine sources added 138.5 GW to global power capacity in 2016, up 8 per cent from the 127.5 GW added the year before.

The added generating capacity roughly equals that of the world's 16 largest existing power producing facilities combined.

 

Investment in renewables capacity was roughly double that in fossil fuel generation; the corresponding new capacity from renewables was equivalent to 55 per cent of all new power, the highest to date.

The proportion of electricity coming from renewables excluding large hydro rose from 10.3 per cent to 11.3 per cent. This prevented the emission of an estimated 1.7 gigatonnes of carbon dioxide.

 

Average capital expenditure for solar PV and wind dropped by over 10 per cent

The total investment was USD 241.6 billion (excluding large hydro), the lowest since 2013. This was in large part a result of falling costs: the average dollar capital expenditure per megawatt for solar photovoltaics and wind dropped by over 10 per cent.


"Ever-cheaper clean tech provides a real opportunity for investors to get more for less," said Erik Solheim, Executive Director of UN Environment.

"This is exactly the kind of situation, where the needs of profit and people meet, that will drive the shift to a better world for all."

 

 

Solar capacity additions rose to an all-time high of 75 GW

New investment in solar totaled USD 113.7 billion, down 34 per cent from the record high in 2015. Solar capacity additions, however, rose to an all-time high of 75 GW. Wind made up USD 112.5 billion of investment globally, down 9 per cent; wind capacity additions fell to 54 GW from the previous year's high of 63 GW.

"The investor hunger for existing wind and solar farms is a strong signal for the world to move to renewables," said Prof. Dr. Udo Steffens, President of Frankfurt School of Finance & Management, commenting on record acquisition activity in the clean power sector, which rose 17 per cent to $110.2 billion.

While much of the drop in financing was due to reduced technology costs, the report documented a slowdown in China, Japan and some emerging markets, for a variety of reasons.

Renewable energy investment in developing countries fell 30 per cent to USD 117 billion, while that in developed economies dropped 14 per cent to USD 125 billion. China saw investment drop 32 per cent to USD 78.3 billion, breaking an 11-year rising trend.

 

Mexico, Chile, Uruguay, South Africa and Morocco all saw falls of 60 per cent or more, due to slower than expected growth in electricity demand, and delays to auctions and financings. Jordan was one of the few new markets to buck the trend, investment there rising 148 per cent to USD 1.2 billion.

The US saw commitments slip 10 per cent to USD 46.4 billion, as developers took their time to build out projects to benefit from the five-year extension of the tax credit system. Japan slumped 56 per cent to USD 14.4 billion.

 

Dramatic cost reductions

"The question always used to be 'will renewables ever be grid competitive?'," said Michael Liebreich, Chairman of the Advisory Board at BNEF.

"Well, after the dramatic cost reductions of the past few years, unsubsidised wind and solar can provide the lowest cost new electrical power in an increasing number of countries, even in the developing world - sometimes by a factor of two."

"It's a whole new world: even though investment is down, annual installations are still up; instead of having to subsidise renewables, now authorities may have to subsidise natural gas plants to help them provide grid reliability."

 

Recent figures from the International Energy Agency cited the switch to renewables as one of the main reasons for greenhouse gas emissions staying flat in 2016, for the third year running, even though output in the global economy rose by 3.1 per cent.

 

Increased investment in the UK and Germany

Investment in renewables did not drop across the board. Europe enjoyed a 3 per cent increase to USD 59.8 billion, led by the UK (UDD 24 billion) and Germany (USD 13.2 billion). Offshore wind (USD 25.9 billion) dominated Europe's investment, up 53 per cent thanks to mega-arrays such as the 1.2 GW Hornsea project in the North Sea, estimated to cost USD 5.7 billion. China also invested USD 4.1 billion in offshore wind, its highest figure to date.


Another positive sign came in winning bids for solar and wind in auctions around the world, at tariffs that would have seemed inconceivably low a few years ago. The records set last year were USD 29.10 per megawatt hour for solar in Chile and USD 30 per megawatt hour for onshore wind in Morocco.

Purchases of assets such as wind farms and solar parks reached a new high, USD 72.7 billion. Corporate takeovers reached USD 27.6 billion, 58 per cent more than 2015.

 

The report in full can be downloaded at fs-unep-centre.org

 


UN Environment

 

 

 

 

 

2017-04-07 | Courtesy:  UN Environment| solarserver.com © Heindl Server GmbH

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