UN-backed report: Record new renewable power capacity added worldwide at lower cost

UN Environment, Paris / Nairobi

Global investment of $241.6 billion (excluding large hydro), 23 percent less than 2015, brought 138.5GW of new renewable power capacity in 2016, up 8 percent from 2015; proportion of global electricity from renewables rose to 11.3 percent in 2016

photo_126339As the cost of clean technology continues to fall, the world added record levels of renewable energy capacity in 2016, at an investment level 23 per cent lower than the previous year, according to new research published today by UN Environment, the Frankfurt School — UNEP Collaborating Centre and Bloomberg New Energy Finance (BNEF).

Global Trends in Renewable Energy Investment 2017 finds that wind, solar, biomass and waste-to-energy, geothermal, small hydro and marine sources added 138.5 gigawatts to global power capacity in 2016, up almost 9 per cent from the 127.5 gigawatts added the year before. The added generating capacity roughly equals that of the world’s 16 largest existing power producing facilities combined.

Investment in renewables capacity was roughly double that in fossil fuel generation; the corresponding new capacity from renewables was equivalent to 55 per cent of all new power, the highest to date. The proportion of electricity coming from renewables excluding large hydro rose from 10.3 per cent to 11.3 per cent. This prevented the emission of an estimated 1.7 gigatonnes of carbon dioxide.

The total investment was $241.6 billion (excluding large hydro), the lowest since 2013. This was in large part a result of falling costs: the average dollar capital expenditure per megawatt for solar photovoltaics and wind dropped by over 10 per cent.

“Ever-cheaper clean tech provides a real opportunity for investors to get more for less,” said Erik Solheim, Executive Director of UN Environment. “This is exactly the kind of situation, where the needs of profit and people meet, that will drive the shift to a better world for all.”

New investment in solar totalled $113.7 billion, down 34 per cent from the record high in 2015. Solar capacity additions, however, rose to an all-time high of 75 gigawatts. Wind made up $112.5 billion of investment globally, down 9 per cent; wind capacity additions fell to 54 gigawatts from the previous year’s high of 63 gigawatts.

“The investor hunger for existing wind and solar farms is a strong signal for the world to move to renewables,” said Prof. Dr. Udo Steffens, President of Frankfurt School of Finance & Management, commenting on record acquisition activity in the clean power sector, which rose 17 per cent to $110.3 billion.

While much of the drop in financing was due to reduced technology costs, the report documented a slowdown in China, Japan and some emerging markets, for a variety of reasons.

Renewable energy investment in developing countries fell 30 per cent to $117 billion, while that in developed economies dropped 14 per cent to $125 billion. China saw investment drop 32 per cent to $78.3 billion, breaking an 11-year rising trend.

Mexico, Chile, Uruguay, South Africa and Morocco all saw falls of 60 per cent or more, due to slower than expected growth in electricity demand, and delays to auctions and financings. Jordan was one of the few new markets to buck the trend, investment there rising 148 per cent to $1.2 billion.

The US saw commitments slip 10 per cent to $46.4 billion, as developers took their time to build out projects to benefit from the five-year extension of the tax credit system. Japan slumped 56 per cent to $14.4 billion.

“The question always used to be ‘will renewables ever be grid competitive?’,” said Michael Liebreich, Chairman of the Advisory Board at BNEF. “Well, after the dramatic cost reductions of the past few years, unsubsidised wind and solar can provide the lowest cost new electrical power in an increasing number of countries, even in the developing world — sometimes by a factor of two.”

“It’s a whole new world: even though investment is down, annual installations are still up; instead of having to subsidise renewables, now authorities may have to subsidise natural gas plants to help them provide grid reliability,” Liebreich said.

Recent figures from the International Energy Agency cited the switch to renewables as one of the main reasons for greenhouse gas emissions staying flat in 2016, for the third year running, even though output in the global economy rose by 3.1 per cent.

Investment in renewables did not drop across the board. Europe enjoyed a 3 per cent increase to $59.8 billion, led by the UK ($24 billion) and Germany ($13.2 billion). Offshore wind ($25.9 billion) dominated Europe’s investment, up 53 per cent thanks to mega-arrays such as the 1.2 gigawatt Hornsea project in the North Sea, estimated to cost $5.7 billion. China also invested $4.1 billion in offshore wind, its highest figure to date.

Another positive sign came in winning bids for solar and wind in auctions around the world, at tariffs that would have seemed inconceivably low a few years ago. The records set last year were $29.10 per megawatt hour for solar in Chile and $30 per megawatt hour for onshore wind in Morocco.

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ADDITIONAL HIGHLIGHTS

Purchases of assets such as wind farms and solar parks reached a new high, $72.7 billion.

Corporate takeovers reached $27.6 billion, 58 per cent more than 2015.

The smaller sectors had mixed fortunes in terms of new investment. Biofuels fell 37 per cent to $2.2 billion, the lowest for at least 13 years; biomass and waste held steady at $6.8 billion and small hydro at $3.5 billion. Geothermal rallied 17 per cent to $2.7 billion. Marine edged down 7 per cent to $194 million.

Siting two different technologies in the same location — to make use of shared land, grid connections and maintenance, and to reduce intermittency — is growing. Some 5.6 gigawatts of these ‘hybrid’ projects have been built or are under development worldwide.

The Ramanathapuram solar complex in India, billed as the world’s largest ever solar photovoltaic project (648 megawatts), was constructed.

The report in full can be downloaded post-embargo at fs-unep-centre.org

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Example coverage:

The Associated Press, USA, Investment in renewable energy dips globally as prices fall, click here; Spanish, 

Spanish, Baja inversión global en energía renovable al caer precios, click here

Reuters, UKWorld investment in green power down, money went further in 2016, click here

Thomson Reuters Foundation, UK, World investment in green power down, money went further in 2016 -report, click here
BBC, UK, UN report: Clean power is up, costs are down, click here

Bloomberg News, USA, With More Bang for the Buck, Renewables Providing Most New Power, click here; Spanish, Poder de grandes eléctricas amenaza mercados de energías renovables y a generadores más pequeños, click here

Agence France Presse, France, Toujours plus d’énergies renouvelables pour moins cher en 2016, click here

Record amount of renewables capacity added in 2016: UN, click herePortuguese, Capacidade recorde de geração energias renováveis adicionada em 2016, click here
Deutsche Presse Agentur, Germany, Studie: Mehr erneuerbare Energien für weniger Geld, click here
Deutsche Finanz Presse Agentur, Germany, Erneuerbare Energien: Rekord-Kapazitätszuwachs trotz sinkender Investitionen, click here
Europa Press, Spain, Las renovables marcan un récord en 2016 en capacidad de energía añadida a todo el mundo a menor costo, click here
Belga, Belgium, Wereldwijde Toename Van Hernieuwbare Energie, Ondanks Dalende Investeringen, click here
New Scientist, UK, Record amounts of renewable energy added to the mix in 2016, click here
Voice of America, USA, Renewable Energy Breaks Records in 2016, click here
InterPress News Service, Italy, Green Power: Wave of the Future, click here
IndoAsian News Service, India
World sees record investments in renewables, says report, click here
Christian Science Monitor, USA, ‘More for less’: Renewable power surges into mainstream as costs fall, click here
Deutsche Welle, Germany, UN: Record amount of renewable energy capacity added in 2016, click here
O Globo, Brazil, Sustentabilidade, click here
Dnesky, Slovakia, Investície do obnoviteľných zdrojov energií vlani klesli, click here
UN News Centre, USA, Nouveau record en 2016 pour les nouvelles capacités électriques issues des énergies renouvelables, selon l’ONU, click here
Seeker, USA, For Renewable Energy, Less Was More in 2016, click here
PV Magazine, Germany, Rekordzubau der Erneuerbaren bei deutlich niedrigeren Investitionskosten, click here
IDW, Germany, Investitionen in Erneuerbare Energien 2016: Rekord-Kapazitätszuwachs bei niedrigeren Kosten, click here
Rinnovabili, Italy, Rapporto ONU: le rinnovabili crescono, i costi calano, click here
Mashable, USA, Clean energy projects soared in 2016 as solar and wind got cheaper, click here
Business Green, UK, UN research: World adds record new renewables capacity at lower cost, click here
Carbon Brief, UK, Renewables growth breaks records again despite fall in investment, click here
Power Magazine, USA, Report: Global Renewable Investment Down, Capacity Grows, click here
Le Scienze, Italy, Il balzo in avanti delle fonti rinnovabili, click here
Coverage summary, including hyperlinks to media coverage, click here:

News release in full, click here