The clean energy sector is undergoing geographic and technological shifts as new markets emerge according to new research

Green sector capacity rises despite investment slump

The global green energy sector reached a record 88GW of additional generating capacity in 2012, despite a decline in investment.

According to research released by The Pew Charitable Trusts, the global clean energy sector is undergoing geographic and technological shifts as new markets emerge and renewable capacity grows.

The 11 per cent decline in clean energy investments compared to 2011 levels, down to $269 billion, was due in part to curtailed incentive programs in a number of countries, among them Spain, Italy, and Germany.

Among the Group of Twenty (G-20) nations, the United Kingdom maintained its seventh place ranking despite a 17 per cent drop in investment, to $8.3 billion.

But elsewhere, continuing support for clean energy led to record levels of investment in a number of nations, including China and South Africa, and renewable energy installations grew by more than 11 per cent to 88 GW, which reflected price reductions in wind, solar, and other technologies.

"Clean energy trends demonstrate the on-going resilience of this emerging sector in the global economy," says Phyllis Cuttino, director of Pew's clean energy program. "Investment declines in the UK and throughout Europe were offset by strong performance in the Asian region.

“Uncertainty surrounding the long-term direction and content of UK policies has given pause to investors. Looking ahead, the advent of a green investment bank and abundant offshore wind resources could help bolster clean energy trends in the UK in coming years."

The research found that uncertainty surrounding clean energy policy in the United Kingdom contributed to the investment decline in 2012, but the country remains one of the few countries on the top-10 lists for every category of investment and capacity growth.

Of the $8.3 billion invested, $3.1 billion was directed to the wind sector and $3.5 billion to solar technologies and, all told, 4.2GW of new clean generating capacity was installed in 2012, including 2.6GW of wind and 800MW of solar.

Among the Group of 20 nations, China reclaimed the top spot from the United States, attracting $65.1 billion, a 20 per cent increase over 2011 and 30 per cent of the total for the G-20 and it added 23GW of clean energy generating capacity, bringing its total to 152GW, the most of any nation.

The United States fell to No. 2 as investment in the sector declined 37 per cent, to $35.6 billion. In third place, Germany curtailed incentives and saw investment decline 27 per cent, to $22.8 billion. Still, 7.5GW of solar generating capacity were added in Germany—the most of any G-20 country.

The Asia and Oceania region has grown nine straight years and in 2012 became the leading regional destination for clean energy investment, growing 16 per cent to $101 billion and accounting for 42 per cent of the global total.

In contrast, policy uncertainty in Europe and the United States resulted in investment declines of 22 per cent in the Europe, Middle East, and Africa region, and 31 per cent in the Americas.

Clean energy investment is also shifting across technologies as, for the second year in a row, solar technologies attracted more financing than any other technology by a wide margin – $126 billion was invested in the subsector in 2012, or 58 per cent of the G-20 total.

Wind energy, which has garnered the majority of clean energy investment for most of the last decade, saw 14 per cent less investment across the G-20, but it still attracted $72.7 billion.

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