China leads G20 with $54.5bn in clean energy investments

Pew report predicts Asia to “become centre of gravity” as US and Europe slip
March 29, 2011
Who's Winning the Clean Energy Race - 2010 edition
Global clean energy finance and investment grew significantly in 2010 to USD243 billion, a 30 percent increase from the previous year with China, Germany, Italy and India leading the charge in nations that most successfully attracted private investments, according to new research released by The Pew Charitable Trusts.

China continued to solidify its position as the world's clean energy powerhouse. Its record USD54.4 billion in investments in 2010 represents a 39 percent increase from 2009. Germany was second in the G-20, up from third last year, after experiencing a 100 percent increase in investment to USD41.2 billion.

"The clean energy sector is emerging as one of the most dynamic and competitive in the world, witnessing 630 percent growth in finance and investments since 2004," said Phyllis Cuttino, director of Pew's Clean Energy Program.

"Countries like China, Germany and India were attractive to financiers because they have national policies that support renewable energy standards, carbon reduction targets and/or incentives for investment and production that create long-term certainty for investors."

The report says Asia is "closing the gap rapidly and is expected in the coming months and years to become the centre of gravity for clean energy investment."

Clean energy investment in Asia rose by a third to USD82.8 billion in 2010, primarily fueled by China. Private investment in China's clean energy sector soared in 2010 and the country has established itself as the world's leading producer of wind turbines and solar modules, the report says. In 2010, China surpassed the US as the country with the most installed clean energy capacity.

The US, which had maintained the top spot until 2008, fell another rung in 2010 to third with USD34 billion, despite a 51 percent rebound in investment. The United Kingdom experienced the largest decline among the G-20, falling from fifth to 13th. The report suggests that uncertainty surrounding clean energy policies in these countries is causing investors to look elsewhere for opportunities.

"Given the uncertainties surrounding key policies and incentives, the United States' competitive position in the clean energy sector is at risk," the report says.

Italy attracted USD13.9 billion in clean energy financing last year, improving its global standing to fourth, from eight in 2009. Italy is the first country to achieve grid parity, or cost-competitiveness, for solar energy. For the first time, India joined the top 10 ranking, attracting USD4 billion, a 25 percent increase.

Wind power continued to be the favored technology for investors at USD95 billion. However, the solar sector experienced significant growth in 2010, with investments growing 53 percent to a record USD79 billion and more than 17 gigawatts of new generating capacity globally. Germany accounted for 45 percent of global solar investments.

"Looking at global trends, the solar sector experienced the strongest growth among the various technologies, led by small-scale residential projects," said Michael Liebreich, CEO of Bloomberg New Energy Finance. "Declining prices and important government support helped the solar sector achieve 40 percent of total clean energy investment in 2010."

Worldwide, the clean energy capacity sits at 388GW, after adding 40GW of wind and 17GW of solar during 2010.

Other key findings from the report include:

  • Regionally, Europe remained the leading recipient, attracting USD94.4 billion, led by Germany (USD41.2 billion) and Italy (USD13.9 billion).

  • The Asia/Oceania region, led by China, continued its sharp rise, attracting USD82.8 billion, a 33 percent increase over the previous year.

  • The Americas also saw investment grow 35 percent, but as a region it remains a distant third, attracting USD65.8 billion.