Global wind and solar capacity increases as investors back renewables, says report

Global wind and solar capacity increases as investors back renewables, says report

The value of global investments in renewable energy sources increased by 12% in 2014, a third higher than the previous year, according to a briefing paper (16-page / 1.82 MB PDF)

– Institute for Energy Economics and Financial Analysis (IEEFA). Jan 21, 2015

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Wind power capacity globally increased by 40% to 46 gigawatts electric (GWe) last year, with China and the US “leading the way with new installations”.

Last year also saw a 20% increase in the construction of solar power installations, representing 46-48 GWe of additional solar generating capacity, the IEEFA said. Figures for 2014 also reinforced the institute’s opinion that “seaborne thermal coal markets have entered structural decline”.

“This position is reinforced by the more than 50% decline in coal prices and the 80% to 90% drop in the equity value of most listed coal companies globally in the last four years, an unprecedented under-performance against the equity market overall,” the IEEFA said.

Preliminary data for the German electricity market “suggests that total electricity consumption fell by 3.8% year-on-year to 610 terawatt hours (TWh) in 2014”, the IEEFA said. Meanwhile, electricity generated in Germany by renewables increased 4% to 157 TWh. “By contrast, with nuclear and gas electricity generation flat, coal consumption fell materially. Electricity from lignite fell 2.3% to 156 TWh and black coal fell 7.9% year on year to 110 TWh.

The IEEFA said it regarded International Energy Agency (IEA) projections of a 5% annual solar cost deflation through to 2035 as “conservative”.

According to the IEA’s third annual ‘Medium-Term Renewable Energy Market Report’, published in August 2014, power generation from renewable sources such as wind, solar and hydro grew strongly in 2013, reaching almost 22% of global generation.

In a report released last September, professional services firm PwC said (20-page / 1.06 MB PDF)  long-term investors including pension funds and wealth managers were becoming increasingly involved in the equity and debt of wind and solar projects. Falling costs, especially in solar, have triggered a withdrawal of subsidies from governments, but “institutional investors have filled the space”, the report said.