UNEP report contributor says unconventional renewable energy applications could drive low carbon investment in developing countries
By Will Nichols
The rapid growth of small-scale renewable energy applications in developing countries should underpin the continued expansion of the global renewables sector, despite a slump in investment levels at the start of this year.
That is the view of Professor Ulf Moslener of the Frankfurt School of Finance and Management, the academic body that produced today’s United Nations Environmental Programme report into green energy investments, who predicted that unconventional renewable energy technologies such as systems designed for cooking and food processing will drive future investment in the sector.
Today’s report found that a total of $211bn was ploughed into renewable energy projects during 2010, a rise of 32 per cent on the previous year. Just under $45bn of this came in the last three months of the year, but this spike in investment preceded a drop in investment to just $29bn for the first quarter of 2011 – the lowest quarterly level since the beginning of 2009.
The slump was largely blamed on investors rushing to take advantage of European renewable energy incentive schemes before they were cut at the end of last year.
However, Moslener said that the shift in renewable energy investment towards developing countries means that the sector’s long-term health remains relatively well assured.
Last year represented the first year that money spent in developing nations overtook the levels invested in the developing world, a trend that Moslener expects to continue as south and central America, the Middle East and Africa, and Asia are all delivering rapid growth.
“This is not just the story of China and India,” he told BusinessGreen. “If you take the cut of [the rest of] developing Asia there’s still 31 per cent growth last year. The numbers are smaller but you still see growth.”
China’s enormous renewable energy investment of $48.9bn dwarfed the rest of the world and put it firmly in the number one spot as the world’s biggest clean tech investor, the report said.
Moslener said that he did not see China’s lead faltering in the near future, adding that other industrializing nations facing similar environmental and energy pressures meant the trend for rising investment outside Europe and North America would continue.
He also said that, while developed nations’ green energy industries were still heavily reliant on subsidies for a kick-start, this was not necessarily the case in developing countries where technologies like solar energy generation is often the cheapest option for certain processes and locations.
“I would expect there to be a sizeable market in renewable technologies that are used in these countries [in ways] that would not be not be thought of in industrial countries,” he said.
“Industrialized solar cooking [and] food processing, for example. There’s a lot of stuff going on … technology that would not normally start in Europe.”
Supporters of renewable energy projects in developing countries have long argued that they are more cost effective as it is often cheaper to install distributed generation technologies in communities without access to power than it is to roll out grid infrastructure.
(Source: www.businessgreen.com )