Global clean energy technology investment reached a record $500 billion in 2020
Energize Weekly, August 11, 2021
Global investment in clean energy technologies reached a record $501.3 billion in 2020, with renewable energy generation accounting for 60 percent of the total, according to a BloombergNEF analysis.
The 2020 figure represents a 9 percent increase over 2019 even with the economic disruption created by the COVID-19 pandemic.
Renewable energy generation accounted for $303.5 billion with a record build-out in solar projects and a 56 percent surge in financing offshore wind projects to $50 billion.
The 2020 figure represents a 2 percent overall increase and was the second-largest annual figure for renewable capacity investments after 2017’s $313.3 billion.
Solar capacity investments totaled $148.6 billion, and onshore and offshore wind investments were $142.7 billion. Other renewables, such as biomass, account for the rest of the investments.
Falling capital costs enabled record volumes of both solar – 132 gigawatts (GW) – and wind 73 GW – to be installed on the basis of the modest increase in dollar investment, BloombergNEF said.
Electric vehicles and charging infrastructure also posted a record $139 billion in investment – a 28 percent increase year-on-year.
“Our figures show that the world has reached half a trillion dollars a year in its investment to decarbonize the energy system,” Albert Cheung, head of analysis at BloombergNEF, said in a statement. “Clean power generation and electric transport are seeing heavy inflows, but need to see further increases in spending as costs fall.”
Other “energy transition” technologies also showed growth, but BloombergNEF questioned whether it was enough.
About $51 billion was invested in domestic installation of energy-efficient heat pumps, a 12 percent increase, and investments in stationary energy storage technologies, such as batteries, was $3.6 billion, level with 2019, despite falling unit prices.
Global investment in carbon capture and storage (CCS) tripled to $3 billion, while $1.5 billion was invested in hydrogen, a 20 percent year-on-year drop, but still the second-highest annual number.
“Technologies such as electric heat, CCS and hydrogen are only attracting a fraction of the investment they will need in the 2020s to help bring emissions under control,” Cheung said. “We need to be talking about trillions per year if we are to meet climate goals.”
Regionally, Europe led with $166.2 billion in new investments, a 67 percent increase, over 2020, fueled by a record year for electric vehicle sales and the best year in eight years for renewable energy investments.
China followed with $134.8 billion in investments, an 11 percent drop year-on-year. The U.S. also posted an 11 percent decline in investment to $85.3 billion.
Europe almost matched China in renewable energy capacity investment at $81.8 billion, up 52 percent, compared to China’s $83.6 billion, a 12 percent year-on-year decline.
The European performance got a big boost from a 56 percent increase in offshore wind financing, including the largest offshore wind development ever, the $8.3 billion, 2.5-GW Dogger Bank project in the North Sea.
The largest single solar park on record also was funded in 2020 – the 2-GW. Al Dhafra in the United Arab Emirates, at a cost of $1.1 billion.
U.S. renewable generation invest dropped 20 percent to $49.3 billion, as investment in wind was almost halved.
“The coronavirus pandemic has held back progress on some projects, but overall investment in wind and solar has been robust and electric vehicle sales jumped more than expected,” Jon Moore, BloombergNEF chief executive, said in a statement. “Policy ambition is clearly rising as more countries and businesses commit to net-zero targets, and green stimulus programs are starting to make their presence felt.”