Government targets to provide electricity in rural areas are drawing new renewable energy investments, particularly in developing countries, said a report launched on Monday.
The Renewable 2012 Global Status Report from global policy network REN21 said that governments are finding that off-grid or micro-grid renewable energy projects are often cheaper than extending their conventional power grids to rural areas. This affordability, along with greater availability of technology, is prompting most developing countries to include such projects in their electricity distribution plans, noted the report.
Off-grid energy projects and micro-grids, which are small-scale, self-contained local grids, provide electricity to remote areas without the need to build and maintain expensive infrastructure for electricity transmission. Typical projects include solar, biomass, wind and small-scale hydro-electric energy.
According to the International Energy Agency (IEA), over a fifth of the world’s population lacks access to electricity, which governments consider to be a key step in meeting global targets for reducing poverty and providing basic human rights.
The IEA has found that providing electricity to rural populations by 2030 will require more than five times current investment levels.
The United Nations Environment Programme (UNEP) executive director Achim Steiner said in a statement that the urgency to electrify rural and urban areas in the developing world was one of the driving factors for investments in renewable energy.
“Whatever the drivers, the strong and sustained growth of the renewable energy sector is a major factor that is assisting many economies towards a transition to a low carbon, resource efficient Green Economy” he added.
The UNEP, which is one of the partner organisations for REN21, launched a sister publication called Global Trends in Renewable Energy Investment on the same day.
The REN21 report said that developing countries invested US$89 billion in renewable energy in 2011, compared to $168 billion from developed countries. This marked a decline in the developing countries’ share of overall renewable energy investment, ending several years of relative growth.
With a 62 per cent growth rate for renewable energy investments, India was the exception, and topped the global list of fastest growing renewable energy investment by country.
Renewable energy sources supplied nearly 17 per cent of global energy needs in 2010, but about half of that amount is from traditional biomass as opposed to modern energy sources, noted the report.
Traditional biomass includes wood and other organic material gathered for burning in cookstoves. In developing countries, this practice has led to high levels of indoor air pollution and depleted natural resources in surrounding lands.
The report noted that traditional biomass use is declining as awareness of the problem grows and as communities invest in advanced cookstoves that use renewable sources and pollute less.
Global power generation capacity from renewable sources rose 8 per cent from 2010 levels to reach over 1,360 gigawatts (GW). This represents over a quarter of the world’s power generation capacity, and includes 970GW from hydro-electric dams.
Electricity from non-hydropower sources, dominated by wind and solar photovoltaics (PV), grew 24 per cent from 2010.
Most of the growth in non-hydropower renewable electricity – about 70 per cent – was in China, the United States, Germany, Spain, Italy, India, and Japan.
Over 400 experts contributed to the annual publication from the Paris-based REN21, which began in 2005 to promote the growth of renewable energy by providing global information on renewable industries, policies and investment.
The report found that while the number of policies to support renewable energy had grown – at least 118 countries had policies in place at the beginning of this year compared to 109 in early 2010 – the rate of new policy implementation has been steadily declining due to on-going global economic challenges.
Professor Udo Steffens, president of the Frankfurt School of Finance & Management said in a statement that renewables are starting to have a big impact on energy supply, but that good policies were needed to help the sector cope with symptoms of rapid growth such as big successes, painful bankruptcies and international trade disputes.
“This is an important moment for strategic policymaking as winners in the new economy form and solidify,” he said.
Despite flagging action on policy, the report said that most renewable energy industries experienced growth in 2011 or were poised for substantial growth in the coming years:
- The wind industry led renewables for capacity growth with an increase of 20 per cent to about 238 GW. Developing countries dominated this growth - led by China, which holds nearly 44 per cent of the global market.
- The solar PV industry, which generates electricity directly from the sun rather than using its heat, increased capacity by 74 per cent to reach nearly 70 GW. Notable trends include a shift toward utility-scale solar farms away from roof-top, small-scale systems, and growing solar markets in China and elsewhere in Asia. The European Union still dominates the PV markets despite shrinking government incentives and a manufacturing sector struggling from oversupply and falling profit margins.
- Concentrated solar thermal power (CSP) companies installed over 450 megawatts (MW) in 2011 to reach a global capacity of 1,760 MW, primarily in Spain. CSP uses concentrated heat from the sun to drive turbines that produce electricity on a utility scale. Bargain PV prices and unrest in the Middle East slowed CSP growth, but construction picked by the end of 2011.
- Electricity from geothermal energy reached 11.2 GW in 2011. Twice that amount of geothermal energy provided heat for buildings and industrial uses.
- The hydropower industry increased global capacity by nearly 2.7 per cent, mostly in Asia. Increasingly, hydropower companies are installing systems that store excess wind and solar energy so that it can be used during times of peak demand.
- Ocean energy technologies such as wave and tidal power plants have begun to scale up after years of research and development and pilot projects. With the addition of a 254 MW tidal plant in South Korea and a 0.3 MW wave plant in Spain, total global capacity reached 527MW in 2011. Other projects in the pipeline indicate rapid growth may be coming within the next few years.
The REN21 report noted that, while governments have historically neglected to link policies for energy efficiency and renewable energy – the “twin pillars” of sustainable energy planning – they are beginning to understand the importance of addressing the two issues together.
The more efficiently energy services are delivered, the faster renewable energy can become an effective and significant contributor of primary energy, said the report.
The UNEP’s Mr Steiner called for leaders at this month’s Rio+20 sustainability summit in Brazil to take note of the opportunities the renewable energy sector provides.
“Transforming sustainable development from patchy progress to a reality for seven billion people is achievable when existing technologies are combined with inspiring policies and decisive leadership,” he said.