U.S. Lags Behind China in Renewables Investments
For the second year, an annual Pew Charitable Trusts report, “Who’s Winning the Clean Energy Race?”, shows that China is the world leader in clean energy investment, with $54 billion in investments in renewables in 2013, well above total U.S. investment of $36.7 billion.
Credit: Pew Charitable Trusts
“No other clean energy market in the world is operating at that scale,” Phyllis Cuttino, director of Pew’s clean energy program, said during a teleconference Thursday, referring to China.
The report was released just days after the Intergovernmental Panel on Climate Change released the second part to its fifth assessment report, which states unequivocally that people will have to adapt to a world in which human fossil fuel emissions have caused the climate to change, threating lives across the globe as temperatures and seas rise and extreme weather becomes more frequent. Developing renewable energy is seen as one of the primary ways to reduce humans' impact on the climate.
The Pew report says China’s efforts to slash poverty, expand economic development and solve its air pollution problems have driven the country to invest heavily in clean energy.
Though renewables market share is on the rise globally, the report says that overall worldwide renewables investment has been declining for two straight years. Investments totaled $254 billion last year, a decline of 11 percent from 2012 and 20 percent from 2011 when investments peaked at $318 billion.
Whereas China installed 14 gigawatts of electricity generation capacity from wind farms and 12 gigawatts of solar power generating capacity last year, the U.S. installed less than 1 gigawatt of wind power after a tax incentive for the wind industry expired. The U.S. installed a record 4.3 gigawatts of solar generation capacity in 2013 according to the report.
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“Globally, we were second for wind and third for solar investment,” Cuttino said.
Ethan Zwindler, head of policy for Bloomberg New Energy Finance, said during Thursday’s call that 2012 was a record year for U.S. wind power installation ahead of the expiration of the Renewable Electricity Production Tax Credit, or PTC, passed in 2009 as part of the American Recovery and Reinvestment Act.
“2013 fell over 90 percent to less than 1 gigawatt,” he said. “Roughly 2 years of U.S. wind-build got crammed into one, which was 2012.”
There is likely to be a resurgence in wind farms coming online in the U.S. in 2014, many of which were under construction last year and will benefit from the PTC, Zwindler said.
“The PTC still does very much matter to the U.S. wind industry,” he said.
Credit: Pew Charitable Trusts
Another important finding in the report is that for the first time, solar power installations eclipsed wind farm construction globally last year.
“One-third of all solar on the planet was installed last year,” Cuttino said. “Deployment of solar was up 29 percent. Falling prices are really driving technology and deployments around the world.”
Zwindler said the solar and wind power industries worldwide are in a transition period as subsidies for renewables are scaled back, especially in Germany and Italy, but he is confident renewables will be able to compete in the future with few subsidies.
“It does not take place in all places at the same time,” he said. “If you’re in a sunny part of the world with high electricity prices, putting solar on your roof clearly can make more sense.”
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