In 2018, moderate declines in investments in renewables globally were offset by increased investments in energy efficiency technologies across the building industry and transport sectors.

Since December 2018, support for renewable energy schemes were announced by the UK for projects in Africa, and by the European Commission for measures undertaken by Portugal and Lithuania. Several energy efficiency projects in Latin America received financing from the Green Climate Fund (GCF).

In the green building sector, the UK and International Finance Corporation (IFC) joined a partnership in blended concessional finance for climate change mitigation. Lebanese electricity distribution services received clean climate finance to increase its grid efficiency through deployment of new technologies. To ensure that energy-saving investments in electricity transmission and distribution technologies are aligned with the Paris Agreement on climate change, the World Resources Institute (WRI) presented a methodology to screen their mitigation impacts.

Global Clean Energy Investments: Steady-State Above USD 300 Billion

Global investments in renewable energy have increased five-fold over the last 15 years, and remain strong above the annual USD 300 billion mark. Intermittent decreasing trends, such as those observed in 2018 and in 2016, are in part driven by the continued decline in renewable technology costs. Such movements are observable in climate finance flows. In 2018, declines in renewable energy investments have been offset by increased investments in energy efficiency technologies across the building industry and transport sectors. These trends emerge from reports by the UNFCCC Standing Committee on Finance, IRENA and Climate Policy Initiative, as well as the International Energy Agency.

According to the research company Bloomberg New Energy Finance (BNEF), a total of USD 332.1 billion was invested in renewable energy in 2018, excluding large hydro-electric projects, but including equity raised by companies to invest in smart grids, digital energy, energy storage and electric vehicles. BNEF’s report titled, ‘Clean Energy Investment Trends 2018,’ presents sector and country-specific data that shows:

  • Overall investment in solar dropped 24% to USD130.8 billion;
  • Wind investment rose 3% to USD128.6 billion, with offshore wind having its second-highest year with USD25.7 billion invested;
  • Biomass and waste-to-energy investment rose 18% to USD6.3 billion, while that in biofuels rallied 47% to USD3 billion; and
  • Geothermal energy investment increased by 10% to USD1.8 billion, small hydro investment decreased 50% to USD1.7 billion and investment in marine energy sources increased by 16% to USD180 million.

In terms of of regional trends, data in the BNEF report show that the Asian region continued to lead since having caught up with Europe in 2012. Comparisons by country show that, over the 2017-2018 period, clean energy investments increased in some countries and decreased in others:

  • China continued to lead with total investments of USD 100.1 billion, even though this figure is 32% on its 2017’s record investments. The decline can be attributed to a reduction in the value of solar commitments;
  • Europe saw clean energy investment leap 27% to USD 74.5 billion;
  • The US ranked as the second-highest country, investing USD 64.2 billion, an increase of 12%; and
  • Investments decreased in Japan to USD 27.2 billion, down 16%, India at USD 11.1 billion, down 21%, and Germany at USD 10.5 billion, down 32%.

Most other countries show an upward trend in clean energy investments.

Source: SDG Knowledge Hub