Last year was a record year not only for new installations in renewable energy but also for investments, as developing countries led by China pumped in money to boost the sector despite low fossil fuel prices, the Renewables 2016 Global Status Report said.
It said worldwide investment in renewable power and fuels reached $286 billion, and the total is far higher if investment in large hydropower projects of more than 50 megawatt and in heating and cooling is taken into account.
“With China accounting for more than one third of the global total, developing countries surpassed developed countries in total renewable energy investments for the first time. With increased investment came an increase in technological advances, cost reductions and jobs,” the report said.
According to the report, renewable power generating capacity saw its largest increase ever, with an estimated 147 gigawatts (GW) added. Modern renewable heat capacity also continued to rise, and renewables use expanded in the transport sector.
“These results were driven by several factors. First and foremost, renewables are now cost competitive with fossil fuels in many markets. In addition, government leadership continues to play a key role in driving the growth of renewables, particularly wind and solar, in the power sector,” the report said.
As of early 2016, 173 countries had renewable energy targets in place and 146 countries had support policies. Cities, communities and companies are leading the rapidly expanding “100 percent renewable” movement, playing a vital role in advancing the global energy transition.
Additional growth factors include better access to financing, concerns about energy security and the environment and the growing demand for modern energy services in developing and emerging economies.
“What is truly remarkable about these results is that they were achieved at a time when fossil fuel prices were at historic lows, and renewables remained at a significant disadvantage in terms of government subsidies. For every dollar spent boosting renewables, nearly four dollars were spent to maintain our dependence on fossil fuels,” said Christine Lins, executive secretary of REN21.
This means that accelerated action to reduce greenhouse gas emissions stemming from the Paris Climate Agreement in December is not reflected in the results. While trends are generally positive, the report highlights several challenges that remain to be addressed if governments are to fulfill their commitments to achieve a global transition away from fossil fuels, the report said.
These include: achieving effective integration of high shares of renewables into the grid; addressing policy and political instability, regulatory barriers, and fiscal constraints. Further, there is far less policy focus on transport and, particularly, heating and cooling, so these sectors are progressing much more slowly.