Lately the renewable energy space is an almost constant source of good news. Renewable energy project development has kicked into high gear over the last few years, with 2015 breaking many records on a global scale. According to Bloomberg’s New Energy Finance report, investment into renewables in 2015 more than doubled that of fossil fuels, attracting £229 billion globally versus approximately £90 billion for coal and natural gas. That figure, £229 billion, is the largest amount ever invested into renewable energy in a single year and it is especially remarkable because it happened precisely when many experts were predicting a downturn.
It is estimated that 2015 saw the installation of 64GW of new wind energy capacity and 57GW of solar, 30% more than was installed in 2014. This combined total of 121GW makes up half of all new net capacity installed during the year – that means that 50% of new energy generating resources created in the year 2015 were renewables.
Despite the government adopting a hostile stance towards them, British renewables boomed in 2015, with investment growing 24%, up to £16.2 billion. A sizeable chunk of this came from offshore wind developments in the North Sea with the UK inaugurating two major wind farms, the 580MW Race Bank and 336MW Galloper, said to have cost £2 billion and £1.6 billion respectively. On a smaller level, the UK’s rooftop solar market grew to £1.2 billion, putting it in fourth place worldwide for investment in solar arrays of 1MW or less. Community energy certainly played a role in this as 2015 was the year in which community renewables grew the most since their inception.
What makes all of this more remarkable is that it occurred in defiance of expectations.
Fossil fuel prices have plummeted since 2014, and many analysts and sceptics of renewable energy predicted that this drastic drop in the price of oil, coal, and natural gas would see investment in them grow in 2015 at the expense of renewables. Instead, and to the surprise of many, what we have seen is precisely the opposite – oil companies are going into cost-cutting mode, shedding tens of thousands of jobs and refining their earnings expectations downwards in an attempt to cope with falling prices, while coal may actually be entering its death spiral. Just last week the world’s largest privately-owned coal producer filed for bankruptcy, and the outlook for dozens of other companies looks equally grim.
Europe has always been one of the biggest markets for renewables in the world but that trend seems to be shifting. That position was was fuelled by Germany’s rapid adoption of the technology thanks to a generous regime of subsidies, a regime that has now ended. Both German and European investment into renewables actually fell in 2015, 42% in Germany to £7.3 billion and 18% continent-wide to £40 billion – that means that in 2015 UK investment into renewables made up close to half of all the money in Europe, 40% actually.
Despite one of the largest markets on the planet getting smaller, renewables were still able to grow significantly on a global scale on the back of significant growth in China, which retained its position as the global leader in the field. More interestingly, developing nations also contributed a significant chunk to the growth of renewables globally, with countries such as Mexico, Chile, South Africa and Morocco seeing significant investment.
Building coal and natural gas-burning power plants is incredibly expensive, while solar and wind are very cheap in comparison and installations can be built and be up and running in very little time. Many developing nations are acutely aware of the potential effects of climate change and how burning fossil fuels contributes to worsen the climate situation so they are taking strides to incorporate renewable generation into their energy mix.