1. Investments in renewable energy have grown considerably with major emerging economies taking the lead. For 2010, new investment in renewable energy is estimated to have reached a record high of US$ 211 billion, up from US$ 160 billion in 2009. The growth is increasingly taking place in non- OECD countries, especially the large emerging economies of Brazil, China and India.
2. Renewable energy can make a major contribution to the twin challenges of responding to a growing global demand for energy services, while reducing the negative impacts associated with current production and use. Investments in renewable energy are making a growing contribution towards mitigating climate change, but to stay below a 2 degree Celsius increase in average global temperature, these developments need to be significantly enhanced. Renewable energy has other social and environmental benefits, including mitigating or avoiding many health problems and impacts on ecosystems caused by the extraction, transportation, processing and use of fossil fuels.
3. Renewable energy can help enhance energy security at global, national and local levels. Most of the future growth in energy demand is expected to occur in developing countries, and against a background of rising fossil fuel prices and resource constraints; this raises serious concerns about energy security. In off-grid areas, renewable energy sources can ensure a more stable and reliable supply of energy. Examples include local mini-grids and household level PV or biogas systems.
4. Renewable energy can play an important role in a comprehensive global strategy to eliminate energy poverty. In addition to being environmentally unsustainable, the current energy system is also highly inequitable, leaving 1.4 billion people without access to electricity and 2.7 billion dependent on traditional biomass for cooking. Many developing countries have a rich endowment of renewable energy that can help meet this need.
5. The cost of renewable energy is increasingly competitive with that derived from fossil fuels. Improved cost-competitiveness is due to rapid R&D progress, economies of scale, learning effects through greater cumulative deployment and increased competition among suppliers. In the European context, for example, hydro and on-shore wind can already compete with fossil fuel and nuclear technologies, and off-shore wind will soon be competitive with natural gas technologies. Solar energy for water heating purposes (low temperature solar thermal) is commercially mature and commonly used in China and many other parts of the world.
6. Renewable energy services would be even more competitive if the negative externalities associated with fossil fuel technologies were taken into account. These include both the current and future health impacts of various air pollutants, as well as the costs necessary to adapt to climate change and ocean acidification resulting from CO2 emissions. The existing evidence clearly shows that the external costs from fossil fuel technologies are substantially higher than those of most renewable energy alternatives.