Developing world leading new investments in green energy
[MONTEVIDEO] The developing world has, for the first time, outstripped richer economies in providing new investment in the renewable energy sector, according to a report.
And research and development (R&D) funding from government sources, at US$5 billion in 2010, for the first time overtook corporate R&D investment, according to 'Global Trends in Renewable Energy Investment 2011', published by the UN Environment Programme (UNEP) last month (7 July).
"The increase in government R&D funding is a global phenomenon and reflects, partly, the spending of money from the 'green stimulus' packages that were introduced [by some countries] in 2008–9 after the financial crisis," said Angus McCrone, chief editor of the research and analysis provider Bloomberg New Energy Finance, which prepared the report.
"Several governments are keen to nurture renewable energy technology in their own countries, as a way of creating jobs in the future," McCrone told SciDev.Net.
Total global investment in renewable energy grew by 32 per cent, from US$160 billion in 2009 to US$211 billion in 2010.
The 2010 increase owed much to China, the world leader, which invested US$48.9 billion in renewables.
But the strong push in favour of renewables is noticeable in much smaller economies such as Ecuador, El Salvador and Nicaragua, according to Arnaldo Vieira de Carvalho, senior energy specialist at the Inter-American Development Bank, United States. The findings show a "very important" modification of energy policy trends in developing countries, which is helping to create a business climate for investment into renewables.
The Middle East and Africa invested US$5 billion, more than double their 2009 investment; India invested US$3.8 billion; and Asian developing countries — excluding China and India — invested US$4 billion.
South and Central America made the second highest investment with US$13.1 billion, 39 per cent more than in 2009.
"Latin America has emerged in the last year or two as one of the sharpest growing markets for renewable power worldwide," McCrone said.
Excluding Brazil, Mexico took the lead in Latin America, with an almost 350 per cent increase in 2010.
Argentina saw investment grow nearly seven-fold to US$740 million; in Peru investment more than doubled to US$480 million; and Chile and Venezuela have also seen important investment increase.
"The huge potential for expansion of this type of energy [in Latin America] has had a direct impact on investment in the sector, as well as on R&D in public universities and other research centres that also work with government funds," Victorio Oxilia, executive secretary of the Latin American Energy Organization, told SciDev.Net.
Sven Teske, director of the Renewable Energy Campaign for Greenpeace International, said: "Investing in renewable energy research and building up a local renewable energy industry means investing in education and jobs — so in people — rather than in fuel. I think this is a smart move from developing countries."
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