Race to Innovate the Clean Energy Future Heats Up After the President's Address
President Barack Obama, in his annual State of the Union address called for new economic growth based on clean energy and innovation. The President proposed obtaining 80% of America’s electricity from clean energy sources by 2035. Other countries are seeing the benefits and reaping the rewards of making smart investments in the clean energy future. So as President Obama hinted: the US better get in the game or it will be left on the sidelines. The numbers (and pictures) tell the story. Clean energy investments are happening right now all throughout the world.
Clean energy market is real and growing. $243 billion. That’s how much new investment was made in clean energy in 2010, according to the latest statistics from Bloomberg New Energy Finance (BNEF). This has increased by 30% from 2009, doubled in the last four years, and quintupled in the last six (see graph). If it were a country, clean energy investments would be the 35th largest economy in the world and growing way faster than anyone else.
And according to the BP Energy Outlook 2030, this upward trajectory is expected to continue. They project that non-fossil fuel sources (e.g., renewables) will account for the largest area of energy growth for the first time ever in any two-decade period. Renewable energy is a large portion of that growth, tripling its share over the next two decades.
The Chinese market was the largest by far, at $51 billion, a 30% increase over 2009. This should come as no surprise, since Ernst & Young ranked China as the most attractive country for renewable energy projects last August. As I wrote about last year when China overtook the U.S. in total clean energy spending, the opportunities are increasing every day for countries that seize clean energy as a major driver of economic and innovative growth. There’s a $13 trillion clean energy market over the next two decades to whichever country implements the right policies. China has made it clear in the first month of 2011 that its plans to tap into this market will only be strengthened between 2010 and 2015 (the next five-year plan).
Major increases are occurring in all clean energy sectors. The solar sector grew by an amazing 49%, to $89.3 billion, largely driven by a rush into small-scale projects, particularly in Germany, the US, the Czech Republic, and Italy. A surge in investment in smaller-scale renewable power projects had a record year, with a 91% increase in investment to $59.6 billion in 2010.
Global wind investment grew 31% to $96 billion and BNEF noted that investment in China and large offshore wind farms in Europe accounted for 38% of the total investment in 2010. The American Wind Energy Association (AWEA) just released its report on the global wind industry. AWEA found that China surpassed the U.S. in cumulative wind energy installations, increasing capacity by 62% last year (after four years of consecutive doubling). China had 41,800 MW, and the U.S. 40,180 MW, as of the end of the year. Wind installations in the U.S. almost came to a standstill last year.
Behind these statistics are real projects that are creating real jobs and industries. As I travel around the world, I have been struck over the past couple of years about the growing intensity of key countries’ desire to tap into the benefits of investing in renewable energy, energy efficiency, and other clean energy. All you have to do is travel to a couple of countries and you can see that there are real clean energy projects behind these numbers. Wind turbines are popping up all over China. Solar plants are being installed in India. Construction workers, maintenance workers, etc are helping to build energy efficient buildings or convert existing ones to use less energy. Just look at this small collection of pictures of real clean energy investments being made around the world and you’ll see what I’m talking about.
The global clean energy race is one that every country is competing in because the rewards for succeeding are too great (a point that China has bought into as my colleague pointed out). And the consequences to our environment and health if we fail are too great. A renewed focus on innovation and clean energy is the only way to ensure U.S. competitiveness in the 21st century. This will create jobs, reduce carbon pollution, and ensure that the US isn’t left behind.
This post was coauthored with NRDC China Climate Fellow Michael Davidson.