China leads renewables boom as West flags

Global investment in renewable energy has passed the $200bn (£122bn, €140bn) mark, having risen by a third in 2010, thanks partly to China’s booming renewables market.

The UN Environment Program’s (UNEP) latest annual report says renewables investment stood at $211bn last year, 32% higher than in 2009.

However, China, where wind farm investment is strong, appears to be carrying the world market for renewables, as $49bn of the $51bn increase was generated by the Asian economy.

New investment was up in almost all developing markets. While Europe’s investment declined by around a fifth, many South American countries and Asian economies, such as Pakistan and Thailand, saw their markets triple during 2010.  

In terms of financial investment – that is, investment by venture capital, private equity and public markets – developing economies overtook the developed world for the first time. The report, in fact, suggests the needs of the 1.5bn people at the ‘bottom of the pyramid’, without a reliable electricity supply, are increasingly being met by off-grid power from renewable sources.

The UK saw a ‘sharp fall’ in its renewable energy investment, from $10.8bn to $2.9bn, with wind projects almost flatlining – figures that UNEP ascribes in part to uncertainty over the coalition government’s policy direction.

The investment of most other developed economies either rose modestly or fell.

Despite increasing international pleas for climate change responsibility, corporations are lagging behind on some aspects of green investment, such as on research and development, while governments’ investments are rising.

The stock performance of clean energy funds, meanwhile, fell despite increasing investment in renewables overall. The WilderHill New Energy Global Innovation Index, for example, dipped by about 15% in 2010, underperforming wider stock market indices by some way.

In terms of product, the sharpest rise was in small-scale projects, solar power and, especially, wind power, in which global investment is now approaching £100bn.