Renewable energy investment to double in this decade

Analysts forecast yearly investments in energy of nearly $400 billion by 2020 – nearly double the $195 billion invested last year. Alex Blackburne looks into the report.

Between 2005 and 2010, annual investment in energy increased four-fold, from $50 billion six years ago, to just under the $200 billion mark last year. This figure is set to continue to soar, according to Bloomberg New Energy Finance (BNEF), independent analysers.

BNEF’s report, Global Renewable Energy Market Outlook, predicts that $395 billion will be invested in the energy sector in 2020, with over $450 billion ten years later in 2030.

The figures mean that by 2030, the world’s total energy production from renewable sources will be 15.7% – up over 3% from the 12.6% recorded last year.

BNEF’s findings would require some $7 trillion of new global capital from 2011 to 2030. Whilst in percentage terms, the fastest growers in renewable energy investment worldwide is expected to be India, the Middle East, Africa and Latin America, which have projected growth rates of 10-18% per year between 2010 and 2020.

The International Energy Agency (IEA) published a similar but more broad report to BNEF’s, named World Energy Outlook earlier this month, which came out with less positive figures on renewable energy usage in the future.

“Our figures are more optimistic than those of the IEA on the increase in renewable power generation”, said Angus McCrone, chief editor at BNEF.

“However, both we and the IEA expect total world electricity production to rise to 33-34,000 terawatt hours by 2030 [an increase of nearly 90% from what it is now], and for fossil fuel power output to rise within that total, so the prospects for curbing emissions still look bleak.”

Although on the face of it, BNEF’s predictions are positive, with renewable energy consumption set to soar, the amount of carbon emissions is set to mirror the rise.

The most effective way to cull this projected increase is to choose sustainable investment in ethical companies.

Whilst consumption of renewable energy is expected to make up 15.7% of the world’s total energy production by 2030, this isn’t anywhere near good enough. With these figures, we’ll still feel the full effects of climate change.

To view BNEF’s report in full, click here.

If everyone transferred their funds to ethical companies, then there is a genuinely real chance that this world will continue to live. If you would like to find out more about investing in renewable energy, ask your financial adviser, if you have one, or complete our online form and we’ll connect you with a specialist ethical adviser.