|
Get AfricaFocus Bulletin by e-mail!
on your Newsreader!
Format for print or mobile
Africa: Renewable Energy Rising Rapidly
AfricaFocus Bulletin
Jul 14, 2011 (110714)
(Reposted from sources cited below)
Editor's Note
"Global investment in renewable energy jumped 32% in 2010,
to a record $211 billion. It was boosted in particular by
wind farm development in China and small-scale solar PV
installation on rooftops in Europe. ... Significant
investment is also starting to be seen in Africa, which
posted the highest percentage increase of all developing
regions, if the emerging economies of Brazil, China and
India are excluded. ... Total investment on the continent
rose from $750 million [in 2009] to $3.6 billion [in
2010]." -- Global Trends in Renewable Energy Investment
2011
As noted in another AfricaFocus Bulletin released today and
available on the web at
http://www.africafocus.org/docs11/clim1107.php), progress
at global climate talks is painfully slow and inconsistent,
with serious setbacks likely unless there is new momentum
by the end of the year. But, as indicated by this new
report on renewable energy, there is significant progress
on some fronts away from the global negotiations. The new
UNEP report on global trends in renewable energy
investment, excerpted below, comments:
"There was a sense, in both the second half of 2010 and
early 2011, that progress in renewable energy was taking
place at a pace that public opinion and policymakers in
many countries were simply failing to spot. This progress
was both in investment levels and, even more, in costcompetitiveness
with conventional power sources."
Another sign of increased momentum on the renewable energy
front was the launch of the International Renewable Energy
Agency (IRENA), with headquarters in Abu Dhabi. An initial
consultation earlier this month resulted in the "Abu Dhabi
Communiqué on Renewable Energy for Accelerating Africa's
Development," also included in this AfricaFocus Bulletin.
While the language of the declaration echoes all too
familiar conference boilerplate commitments, it indicates a
growing consensus that renewable energy must take higher
priority in Africa's development plans. As prices drop, and
renewable energy becomes more competitive, private
investors as well as policy makers are taking the sector
more seriously.
For previous AfricaFocus Bulletins on environment and
climate issues, see http://www.africafocus.org/envexp.php
++++++++++++++++++++++end editor's note+++++++++++++++++
Global Trends in Renewable Energy Investment 2011
Analysis of Trends and Issues in the Financing of Renewable
Energy
United Nations Environment Programme and Bloomberg New
Energy Finance, 2011
http://www.unep.org / http://www.newenergyfinance.com
Global investment in renewable energy jumped 32% in 2010,
to a record $211 billion. It was boosted in particular by
wind farm development in China and small-scale solar PV
installation on rooftops in Europe.
Of the major types of investment, there were sharp
increases in asset finance of utility-scale projects such
as wind farms, in venture capital provision for young
firms, and in equity-raising on the public markets by
quoted renewable energy companies. Asset finance rose 19%
to $128 billion in 2010, venture capital investment
increased 59% to $2.4 billion, and public market investment
gained 23% to $15.4 billion.
However the sharpest percentage gains were in investment in
small-scale projects, up 91% year-on-year at $60 billion,
and in government-funded research and development, up 121%
at $5.3 billion, as more of the "green stimulus" funds
promised after the financial crisis arrived in the sector.
One of the striking features of 2010 was that, in terms of
financial new investment (asset finance and investment by
venture capital, private equity and public markets,
developing countries overtook developed economies for the
first time.
Foreword
Achim Steiner, UN Under-Secretary General and UNEP
Executive Director
Investments in renewable energies, from wind and solar
power to geothermal and waste-into-energy, continued their
remarkable growth in 2010.
A combination of stimulus package funds making their way
into the market, the introduction of smart policies like
feed-in tariffs and target-setting sparked a record $211
billion of investment in renewable energy.
The more-than-$48 billion new investment in China merits
attention in terms of scale and growth. Other highlights of
this year's report are rising investments across other
parts of the developing world, and the sharp increase in
investment in small-scale renewables in countries such as
Germany and Italy, where predominantly rooftop solar
projects surged to $60 billion-worth of investment, up over
90% from 2009.
Excluding Brazil, Mexico took the lead in Latin America
where investments, mainly in wind but also in geothermal,
grew close to 350%, triggered in large part by a government
decision to raise renewable energy capacity from 3.3% to
over 7.5% by 2012.
Argentina, with a target of 8% of its energy to be sourced
from renewables by 2016, saw investment grow nearly sevenfold
to $740 million. 2010 also saw important investment in
Chile, Peru and Venezuela.
In Asia, Pakistan and Thailand saw investments tripling and
quadrupling respectively. In Pakistan $1.5 billion worth of
wind was financed and in Thailand $700 million-worth of
investment flowed, mainly into large-scale photovoltaic
projects.
Significant investment is also starting to be seen in
Africa, which posted the highest percentage increase of all
developing regions, if the emerging economies of Brazil,
China and India are excluded.
In Egypt, renewable energy investment rose by $800 million
to $1.3 billion as a result of the solar thermal project in
Kom Ombo and a 220MW onshore wind farm in the Gulf of Zeit.
In Kenya, investment climbed from virtually zero in 2009 to
$1.3 billion in 2010 across technologies such as wind,
geothermal, small-scale hydro and biofuels. Small but
significant advances were also made in Cape Verde, Morocco
and Zambia.
Renewable energies are expanding both in terms of
investment, projects and geographical spread. In doing so,
they are making an increasing contribution to combating
climate change, countering energy poverty and energy
insecurity, stimulating green jobs and meeting the
Millennium Development Goals.
The UN climate convention in Durban later in the year,
followed by the Rio+20 Conference in Brazil in 2012, offer
important opportunities to accelerate and scale-up this
positive transition to a low carbon, resource efficient
Green Economy in the context of sustainable development and
poverty eradication.
Executive Summary
Global investment in renewable power and fuels set a new
record in 2010, and the margin over totals for previous
years was wide, not narrow. Investment hit $211 billion
last year, up 32% from a revised $160 billion in 2009, and
nearly five and a half times the figure achieved as
recently as 2004.
The record itself was not the only eye-catching aspect of
2010. Another was the strongest evidence yet of the shift
in activity in renewable energy towards developing
economies. Financial new investment, a measure that covers
transactions by third-party investors, was $143 billion in
2010, but while just over $70 billion of that took place in
developed countries, more than $72 billion occurred in
developing countries.
This is the first time the developing world has overtaken
the richer countries in terms of financial new investment -
the comparison was nearly four-to-one in favour of the
developed countries back in 2004. It is important to note
that in two other areas not included in the financial new
investment measure, namely small-scale projects and
research and development, developed economies remain well
ahead.
However the balance of power in renewables has been
shifting towards developing countries for several years.
The biggest reason for this has been China's drive to
invest: last year, China was responsible for $48.9 billion
of financial new investment, up 28% on 2009, with the asset
finance of large wind farms the dominant part of that. But
the developing world's advance in renewables is no longer a
story of China and little else. In 2010, financial new
investment in renewable energy grew by 104% to $5 billion
in the Middle East and Africa region, and by 39% to $13.1
billion in South and Central America.
The developing world - at least outside its most powerful
economies - may not be able to afford the same level of
subsidy support for clean energy technologies as Europe or
North America. However it has a pressing need for new power
capacity and, in many places, superior natural resources,
in the shape of high capacity factors for wind power and
strong solar insolation. It, also, is starting to host the
development of a range of new renewable energy technologies
for specific, local applications. As Chapter 10 recounts,
these range from rice-husk power generation to solar
telecommunications towers and are becoming the technology
of choice, not a poor substitute for diesel or other
fossil-fuel power options.
A second remarkable detail about 2010 is that it was the
first year that overall investment in solar came close to
catching up that in wind. For the whole of the last decade,
as renewable energy investment gathered pace, wind was the
most mature technology and enjoyed an apparently
unassailable lead over its rival power sources. In 2010,
wind continued to dominate in terms of financial new
investment, with $94.7 billion compared to $26.1 billion
for solar and $11 billion for the third-placed biomass &
waste-to-energy. However these numbers do not include
small-scale projects and in that realm, solar, particularly
via rooftop photovoltaics in Europe, was completely
dominant. Small-scale distributed capacity investment
ballooned to $60 billion in 2010, up from $31 billion,
fuelled by feed-in tariff subsidies in Germany and other
European countries. This figure, combined with solar's lead
in government and corporate research and development, was
almost enough to offset wind's big lead in financial new
investment last year.
No energy technology has gained more from falling costs
than solar over the last three years. The price of PV
modules per MW has fallen by 60% since the summer of 2008,
according to Bloomberg New Energy Finance estimates,
putting solar power for the first time on a competitive
footing with the retail price of electricity in a number of
sunny countries. Wind turbine prices have fallen 18% per MW
in the last two years, reflecting, as with solar, fierce
competition in the supply chain. Further improvements in
the levelised cost of energy for solar, wind and other
technologies lie ahead, posing a bigger and bigger threat
to the dominance of fossil-fuel generation sources in the
next few years.
$211 Billion Investment
Total investment in renewable energy in 2010 was $211
billion, up from $160 billion in 2009 and $159 billion in
2008. Within the overall figure, financial new investment -
which consists of money invested in renewable energy
companies and utility-scale generation and biofuel projects
- rose to $143 billion, from $122 billion in 2009 and the
previous record of $132 billion in 2008.
A sharper increase however has been evident in the other
components of the total investment figure - namely smallscale
distributed capacity, and government and corporate
R&D. These jumped to $68 billion in 2010, from $37 billion
in 2009 and $26 billion in 2008, reflecting mainly the boom
in rooftop PV, but also a rise in government-funded R&D, as
spending increased from "green stimulus" announced after
the financial crisis.
...
A third challenge for renewables came from outside
scepticism. This manifested itself both in the stock market
- where clean energy shares under-performed wider indices
by more than 20% on pessimism about future profit growth and
in international politics, where the mood postCopenhagen
and post-Climategate was cooler than in some
previous years. In fact, more progress towards emission
reduction was achieved than expected at the December 2010
meeting in Cancun; and the consensus among climate
scientists about man-made global warming actually
strengthened during last year. However neither has - yet catapulted
clean energy back to the top of government
agendas.
There was a sense, in both the second half of 2010 and
early 2011, that progress in renewable energy was taking
place at a pace that public opinion and policymakers in
many countries were simply failing to spot. This progress
was both in investment levels and, even more, in costcompetitiveness
with conventional power sources.
Africa
Africa achieved the largest percentage increase in
renewable energy investment among developing regions
excluding the big three economies [China, India, Brazil].
Total investment on the continent rose from $750 million to
$3.6 billion, largely as a result of strong performances
from Egypt and Kenya.
In Egypt, renewable energy investment rose by $800 million
to just over $1.3 billion, but this was the result of just
two deals, a 100MW solar thermal project in Kom Ombo, and a
220MW onshore wind farm in the Gulf of El Zeit region. The
country's next move in renewable energy is scheduled to be
the tender for several hundred MW more of wind projects in
the Gulf of Suez region.
In Kenya, the advance was more broadly based. Investment
rose from virtually zero to more than $1.3 billion,
including funding for wind, geothermal and small hydro
capacity of 724MW, and for 22 million litres per year of
ethanol production. Geothermal was the highlight, with
local electricity company KenGen securing debt finance for
additional units at its Olkaria project.
Smaller advances in renewable energy were made by several
other African countries, including Zambia, Morocco and Cape
Verde. In Morocco, there could be a step-jump in renewable
power investment with a 150MW wind farm near the northern
city of Taza and a 500MW solar thermal project at
Quarzazate in the country's south. Both of these have
reached the tendering or pre-selection stage. South Africa
is likely to be one of the most important locations in the
continent for renewable energy over coming years, with
December 2010 seeing the government in Pretoria receiving
384 applications from companies seeking to build up to 20GW
of renewable power capacity. Local utility Eskom was in
line by the spring of 2011 for a $365 million loan from the
African Development Bank to help pay for a 100MW solar
thermal plant in the Northern Cape and a 100MW wind farm in
the Western Cape.
Abu Dhabi Communiqué on Renewable Energy for Accelerating
Africa's Development Adopted at IRENA-Africa High-Level
Consultation
10 Jul 2011
IRENA-Africa High-Level Consultations on Partnership on
Accelerating Renewable Energy Uptake for Africa's
Sustainable Development, 08-09 July 2011
International Renewable Energy Agency (IRENA)
http://www.irena.org / Direct URL:
http://tinyurl.com/62pq79u
We, Ministers of Energy and heads of delegations of African
countries and the African Union Commission and the
Conference of Energy Ministers of Africa (CEMA), met at the
invitation of IRENA in Abu Dhabi, UAE, 08-09 July 2011,
hosted by the UAE Government. Participants included
regional economic communities, national bodies,
international partners, UN-Economic Commission for Africa,
EU-Africa Energy partnership, World Bank, UNIDO, UNEP, UNHabitat,
Global Environment Facility, Paris-Nairobi Climate
Initiative, key energy companies, NGOs research agencies
and others.
Our discussions were guided by the February 2009 African
Union Assembly of Heads of State and Government decision
to: "develop renewable energy resources in order to provide
clean, reliable, affordable and environmentally friendly
energy,"
(Assembly/AU/Decl. 9-XII) and the November 2010 Maputo
Declaration of the Conference of Energy Ministers of Africa
to "promote renewable energy in a joint effort with others
to … address all issues relating to climate change…"
We were also informed by the Special Report on Renewable
Energy Sources and Climate Change Mitigation of the
Intergovernmental Panel on Climate Change, as well as
IRENA's report, Scenarios and Strategies for Africa, which
provide compelling evidence of the serious energy
challenges faced by the region.
At a time of economic growth and opportunity in Africa,
meeting energy needs and addressing the challenge of energy
access and energy security is an issue of primary
significance for Africa, in order to mitigate the negative
effects of price volatility, supply insecurity and
environmental degradation.
We also recognize the significant potential of renewable
energy to accelerate African low carbon development and
address climate change mitigation and adaptation. Achieving
these outcomes will require:
- Assessment of existing conditions and needs and building
regional cooperation in order to address those needs and
opportunities
- Strengthening national, regional and continental policy
frameworks to stimulate investment in and ensure
sustainable deployment of renewable energy
- Supporting research and development on RE technology and
innovation within the continent and through South-South
cooperation.
The African continent sees great promise in working with
IRENA, whose Assembly has given it a strong mandate
regionally and globally to support member states in
accelerating the adoption of renewable energy.
Considering the above, we have agreed the following:
- We are launching a concerted effort among all
participating governments, agencies, non-governmental
bodies and the private sector to promote intensified
utilization of Africa's vast renewable energy resources for
accelerating Africa's development, considering the need to:
- ensure that IRENA's policy for Africa responds to the
priority concerns of the continent,
- ensure a well-integrated IRENA programme for Africa,
which will cooperate closely with the AUC, CEMA, RECs,
national governments and all other partners,
- develop a concrete and practical approach to supporting
the knowledge, technology, capacity and policy needs of
African countries.
- A crucial first step will be to better understand the
opportunities and constraints in our countries and regions
by mapping "Renewable Energy Readiness", a collaborative
process that will provide a rapid, objective assessment of
the status of renewable energy opportunities, and identify
pathways to address gaps. We urge governments and other
stakeholders to participate in design and implementation of
this initiative.
- We will further engage with IRENA, as the key intergovernmental
forum on renewable energy, in providing a
platform for charting collaborative action strategies for
accelerating implementation of African policies, and
initiatives on renewable energy, focusing in particular on:
- Improving policy frameworks to ensure investment grade
public/private financing, while taking into account special
measures needed to ensure social inclusion
- Brokering services in capacity building including for
entrepreneurs in renewable energy
- Cooperation on technology and innovation to enhance
endogenous human and physical capacity to accommodate
expanded renewables deployment
- Fostering regional and local level renewable energy
technology production and service industries
- Supporting communication campaigns to promote uptake of
renewable energy
- Participants urged IRENA, in its messages to the
international community at CoP-17, Rio+20 and other major
events, to build on this communiqué and emphasize the
following:
- Providing strategic support for renewable energy in the
context of the Green Economy, including assessment of the
impact of market distorting subsidies that inhibit the
deployment of renewable energy; targeted studies on
employment implications of expanded renewables deployment,
policies for employment creation through renewable energy
and related themes,
- advocating increased international support to Africa on
technical capacity building, policy advisory services,
investment financing tools and industrial strategies for
accelerating renewable energy up-take, while ensuring
adequate provision of domestic resources
- Using the 2012 International Year of Sustainable Energy
for All to carry forward Africa's renewable energy
strategies.
- We agree to work towards formalizing IRENA's strategic
presence in Africa and concretizing institutional
arrangements for cooperation with African regional bodies
and strategic partners in the sector; furthermore, we urge
all African states who have not done so to become full
members of IRENA.
- We shall extend full cooperation and support to IRENA to
ensure it fulfils its critical mandate to accelerate the
adoption of renewable energy globally, and to work together
to make Africa a lead region in the transition to renewable
energy.
AfricaFocus Bulletin is an independent electronic
publication providing reposted commentary and analysis on
African issues, with a particular focus on U.S. and
international policies. AfricaFocus Bulletin is edited by
William Minter.
AfricaFocus Bulletin can be reached at africafocus@igc.org.
Please write to this address to subscribe or unsubscribe to
the bulletin, or to suggest material for inclusion. For
more information about reposted material, please contact
directly the original source mentioned. For a full archive
and other resources, see http://www.africafocus.org
|
