Renewable energy

by more than 500 per cent in non-OECD countries. In 2010, new financial investments in renewable energy by developing countries, at US$ 72 billion, edged past the amount invested that year by developed countries, at US$ 70.5 billion (UNEP SEFI 2011). This recent rapid growth has led to predictions that developing economies may well soon have larger installed renewable energy generating capacity than the OECD countries (ITIF 2009, Pew Charitable Trusts 2010).

Among developing countries, by far the largest share of investments in renewable energy has been in the three large emerging economies of China, India and Brazil, which together account for almost US$ 60 billion, or 90 per cent. Other developing countries, while representing only 10 per cent of the total, are also experiencing accelerated growth, with Latin America (excluding Brazil) seeing investments almost tripling, Asia rising almost one-third, and Africa increasing five- fold in 2010 (UNEP SEFI 2011). These investments tend though to be concentrated still in a limited number of countries. For renewable energy investments to expand on a large scale in other developing countries, however, major efforts are needed to develop infrastructure such as transmission and distribution systems, improve the functioning of financial markets and other institutions, and provide a supportive incentive framework.

In addition to installing significant renewable energy capacity, fast-growing emerging markets have also built up large equipment manufacturing industries in the sector, both for export to the global market and for local use. China has, for example, become the world’s largest producer of solar PV panels and solar water heaters. The government has supported investment in manufacturing capacity for renewable energies, for example, by establishing preferential electricity tariffs for the solar industry.

3.2 Technical advances and cost competitiveness

As renewable energy technologies have matured their costs have come down, making many of them increasingly competitive with other energy technologies. This section briefly reviews such developments, drawing on recent reviews of relative maturity and costs of different energy technologies (for example, IPCC 2011; IEA 2010b, c, d).

Overall, the IPCC (2011) review of renewable energy technologies concluded that

technical potential, at a global level, does not present a constraint to continued

13. For example, the International Hydropower Association’s Hydropower Sustainability Assessment Protocol; available at: http://hydrosustainability. org/

Growth: 75% 57% 43% 23% 0.4% 32% 250

211 200 159 150 129 100 57 50 33 0 2004 2005 2006

energy in US$ billions Source: UNEP SEFI (2011)

growth in the use of these technologies. In its assessment, the review also found that a growing number of these are technically mature and are being deployed at significant scale. Table 4 shows the stages of maturity of principal renewable energy technologies according to four stages of maturity: research and development; demonstration and deployment; diffusion; and commercially mature. The most mature technology is hydropower, which currently meets 16 per cent of the world’s electricity demand. Many hydropower installations are large-scale where impacts potentially can be significant on livelihoods, biodiversity, water supply, etc. In order to address potential adverse impacts installations should follow sustainability guidelines as developed by the World Commission on Dams or other best practices.13

Smaller-scale hydropower

projects, by contrast, have fewer such impacts and have great potential in many developing countries. In terms of sustainable biomass applications, the production of sugarcane bioethanol-based transport fuels in Brazil is a commercially mature technology (see Box 3 in Section 5). Onshore applications of wind energy are also commercially mature, while offshore wind energy is in the diffusion phase and, in some situations, approaching the commercially mature phase.

Solar energy technologies for heating purposes (low temperature solar thermal), are commercially mature and commonly used in many parts of the world. Solar PV for electricity in small-scale applications is approaching commercial maturity, such as solar roof- top home systems or solar lanterns in off-grid areas, but is generally still dependent on subsidies or price support mechanisms. Concentrating solar thermal power has been in the demonstration and deployment phase for

211 2007 2008 2009 2010 Figure 3: Global new investment in renewable 90 160

US$ billion