GLOBAL TRENDS in RENEWABLE ENERGY INVESTMENT 2013 Frankfurt School-UNEP Centre/BNEF
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GLOBAL TRENDS IN RENEWABLE ENERGY INVESTMENT 2013 Frankfurt School-UNEP Centre/BNEF. 2013. Global Trends in Renewable Energy Investment 2013, http://www.fs-unep-centre.org (Frankfurt am Main) Copyright © Frankfurt School of Finance & Management gGmbH 2013. This publication may be reproduced in whole or in part in any form for educational or non-profit purposes without special permission from the copyright holder, as long as provided acknowledgement of the source is made. Frankfurt School – UNEP Collaborating Centre for Climate & Sustainable Energy Finance would appreciate receiving a copy of any publication that uses this publication as source. No use of this publication may be made for resale or for any other commercial purpose whatsoever without prior permission in writing from Frankfurt School of Finance & Management gGmbH. 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TABLE OF CONTENTS TABLE OF CONTENTS ACKNOWLEDGEMENTS ..................................................................................................................................... 4 FOREWORD FROM BAN KI-MOON ................................................................................................................... 5 FOREWORDS FROM ACHIM STEINER, CHRISTIANA FIGUERES AND UDO STEFFENS .................................... 6 LIST OF FIGURES ................................................................................................................................................ 7 METHODOLOGY AND DEFINITIONS ................................................................................................................. 9 KEY FINDINGS .................................................................................................................................................... 11 EXECUTIVE SUMMARY ...................................................................................................................................... 12 - Bitter-sweet $244 billion - South up, North down - Box on investment in 2013 1. INVESTMENT BY TYPE OF ECONOMY ................................................................................................... 20 - Developed versus developing countries - Detailed comparisons by country - Developed economies - China, India and Brazil - Other developing economies 2. PUTTING SUSTAINABLE ENERGY INTO PERSPECTIVE .......................................................................... 30 - Overall energy trends - Technology costs - Decreasing subsidy dependence - Energy access - Climate stabilisation - Box on carbon capture and storage - Box on energy-smart technologies 3. FOCUS CHAPTER: EVOLUTION OF POLICIES TO SUPPORT RENEWABLES INVESTMENT .................... 38 - European Union - United States - Emerging markets 4. ASSET FINANCE ...................................................................................................................................... 44 - Box on large hydro-electric projects 5. SMALL-SCALE PROJECTS ....................................................................................................................... 50 - Box on solar water heaters 6. PUBLIC MARKETS ................................................................................................................................... 56 7. VENTURE CAPITAL AND PRIVATE EQUITY ............................................................................................ 62 8. RESEARCH AND DEVELOPMENT ........................................................................................................... 68 9. ACQUISITION ACTIVITY ......................................................................................................................... 72 10. SOURCES OF INVESTMENT – SOME KEY TRENDS ................................................................................ 76 - Funds - Green bonds - Development banks - Crowd funding GLOSSARY ......................................................................................................................................................... 82 ACKNOWLEDGEMENTS ACKNOWLEDGEMENTS This report was commissioned by UNEP’s Division of Technology, Industry and Economic (DTIE) in cooperation with Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance and produced in collaboration with Bloomberg New Energy Finance. CONCEPT AND EDITORIAL OVERSIGHT Angus McCrone (Lead Author, Chief Editor) Eric Usher (Lead Editor) Virginia Sonntag-O’Brien Ulf Moslener (Lead Editor) Christine Grüning CONTRIBUTORS Nicole Aspinall David Strahan Victoria Cuming Luke Mills Kieron Stopforth Ashwini Bindinganavale Ethan Zindler Nico Tyabji Vandana Gombar Sabrina Heckler COORDINATION Angus McCrone DESIGN AND LAYOUT The Bubblegate Company Limited MEDIA OUTREACH Terry Collins Nick Nuttall (UNEP) Angelika Werner (Frankfurt School of Finance & Management) Miriam Wolf (Frankfurt School of Finance & Management) THANKS TO THE FOLLOWING EXPERTS WHO REVIEWED AND PROVIDED FEEDBACK ON THE DRAFT REPORT: Barbara Buchner, Rodney Boyd, Angela Falconer, Gianleo Frisari, Martin Stadelmann, Chiara Trabacchi, Frédéric Crampé, Gunter Fischer, Charles Donovan, Tanja Faller, Michaela Pulkert, Kirsty Hamilton, Mark Fulton, Tom Thorsch Krader, Patrick Doyle, Mike Eckhart, Alan Miller, Sean Mcloughlin Cover Photo: UNEP Headquarters Nairobi 515 kW solar array, the 2nd largest rooftop system in Africa. 4 FOREWORD FROM BAN KI-MOON FOREWORD FROM BAN KI-MOON The climate clock is ticking: concentrations of greenhouse gases in the atmosphere have reached 400 parts per million, the highest in three million years. Our collective responsibility is to ensure that political momentum keeps pace with what science is telling us about the urgency of the climate challenge. Climate change is an overarching threat to all countries and to people everywhere, in particular the poor and the vulnerable. The dangerous consequences risk reversing and undermining our efforts to achieve sustainable development today and for generations to come. If we are to keep temperature rise under 2 degrees Centigrade this century – the minimum level needed to avert the worst climate impacts – the world needs a universal, legally-binding global climate agreement by 2015. With that goal in mind, I will convene a meeting at UN Headquarters in New York in 2014 aimed at engaging leaders at the highest level – from governments as well as business, finance and civil society – to accelerate political momentum further and faster. Energy will be a determining factor in whether the world can avoid dangerous climate change and make a transition to a sustainable, more inclusive global economy. Its centrality led me to launch, two years ago, the Sustainable Energy for All Initiative. This public-private partnership has three objectives to be achieved by 2030: first, to provide access to modern sources of energy for all people; second, to double the rate of improvements in energy efficiency; and third, to double the share of renewables in the global energy mix. Embracing these ambitious but achievable goals can open a world of opportunity for billions of people and lead to massive investment opportunities which can, in turn, stimulate the global economy and generate decent jobs. Global Trends in Renewable Energy Investment 2013 spotlights how resources for green economy transformation are increasing even in economically challenging times. Clean energy investment has quadrupled over the past decade, and last year’s total of $244 billion was the second-highest ever. This should be a source of inspiration for governments, cities, companies and citizens everywhere to raise their ambition towards climate action. A global climate agreement by 2015 would provide dramatic spur in the direction we need to travel. We need to close the viability gap between green and fossil fuel-based projects, and create a more conducive environment for renewable energy investments. This report shows that this can be done. I commend its information and analysis to a wide global audience. BAN KI-MOON SECRETARY-GENERAL, UNITED NATIONS 5 FOREWORDS FROM ACHIM STEINER, CHRISTIANA FIGUERES AND UDO STEFFENS JOINT FOREWORD FROM ACHIM STEINER, CHRISTIANA FIGUERES AND UDO STEFFENS The pace, scale and now geographical spread of clean energy investments is one of the most positive and remarkable transitions of the past few years. Driven in part by the UNFCCC process and various provisions and mechanisms of the Kyoto Protocol, the increasing deployment of wind, solar, geothermal and other clean energy power sources serve as a powerful antidote to those who ACHIM STEINER CHRISTIANA FIGUERES UDO STEFFENS claim that a transition to a low-carbon, resource- efficient future is unobtainable. Last year, $244 billion of new investment went into renewable energies. While down from the previous record- breaking year, this investment underscores that for the private sector, renewable and clean energy systems have moved from the fringe