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Renewable energy spending to total US$7trn to 2030

The annual value of renewable energy capacity installed will double in real terms to US$395 billion in 2020, rising to US$460bn in 2030, compared with US$195bn in 2010, according to Bloomberg New Energy Finance.

By Kari Williamson

As a result of investment, 15.7% of total energy production could come from renewable sources (including large hydro) in 20 years, up from 12.6% last year.

In its Global Renewable Energy Market Outlook, BNEF predicts that Europe will remain one of the biggest markets for money spent on renewable energy projects for the next three years, but with a dwindling share of world investment as EU governments scale back clean energy support in the face of sovereign debt problems.

Growth in the European market will resume post 2015 as investment scales up to meet the EU 2020 renewable energy target.

China will take over the lead in renewable energy asset finance from Europe in 2014, with an annual spend of just under US$50bn. The US and Canada are also expected to see no lasting slowdown in project construction, together hitting US$50bn of investment in 2020.

High growth in developing countries

The most rapid growth will be seen in the rapidly developing economies of India, the Middle East, Africa and Latin America, with projected renewable energy growth rates of 10-18% per year over the period 2010 to 2020.

By technology

With regard to technologies, cost reductions will spur deployment of solar power, which will undergo the second-fastest percentage growth of all technologies (after offshore wind) from 51 GW in 2010 to 1137 GW by 2030. This will require significant capital – an annual average of US$130bn over 2010-30 compared with US$86bn in 2010, BNEF says.

The wind sector will continue to expand, attracting US$140bn in 2020 and US$206bn per annum by 2030 (2010: US$82bn). New areas of growth will come from European offshore wind and emerging markets in Latin America, Turkey, Africa and Australia. In those latter countries, there is a favourable combination of good resources and underlying power demand growth combined with a desire to diversify the energy mix.

In addition, repowering will represent a significant market over the next 20 years in the US and Europe, where there are many older turbines on resource-rich sites.

The bioenergy sector will see renewed activity, with the commercialisation of second-generation technologies. Investment in biofuels, biomass and waste-to-energy is projected to increase from US$14bn in 2010 to US$80bn in 2020 and then remain level over the next decade, the analyst predicts.

Guy Turner, Director of Commodity Market Research at Bloomberg New Energy Finance, says: “These results indicate that last year's record renewable energy investment was no one-off despite the recent economic gloom. Big winners over the next 20 years will be the emerging renewable energy hubs in Latin America, Asia, the Middle East and Africa – by 2020 the markets outside of the EU, US, Canada and China will account for 50% of global annual investment in renewable energy capacity.”

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