Bloomberg New Energy Finance assess level of renewable energy investments over next 20 years

November 26th, 2011 by Bloomberg New Energy Finance

The annual value of renewable energy capacity installed will double in real terms to $395 billion in 2020, rising to $460 billion in 2030, compared with $195 billion in 2010 – according to analysis company Bloomberg New Energy Finance.

As a result, in 20 years’ time 15.7% of total energy production will come from renewable sources (including large hydro), up from 12.6% last year.

These are the results of the Global Renewable Energy Market Outlook, a major new piece of research published for Bloomberg New Energy Finance clients, presenting the firm’s latest forecasts on the size of the world renewable energy markets out to 2030.

Wind turbines on the coast of Rotterdam, Netherlands on 14 August 2011 (click image to expand - ©RLLord)

Geographically, Europe will remain one of the biggest markets for money spent on renewable energy projects for the next three years, but with a dwindling share of world investment as European Union governments scale back clean energy support in the face of sovereign debt problems. Growth in the European market will resume post 2015 as investment scales up to meet the EU 2020 renewable energy target.

China will take over the lead in renewable energy asset finance from Europe in 2014, with an annual spend of just under $50 billion . The US and Canada are also expected to see no lasting slowdown in project construction, together hitting $50 billion of investment in 2020.

The most rapid growth will be seen in the rapidly developing economies of India, the Middle East, Africa and Latin America, with projected growth rates of 10-18% per year over the period 2010 to 2020.

With regard to technologies, cost reductions will spur deployment of solar power, which will undergo the second-fastest percentage growth of all technologies (after offshore wind) from 51 GW in 2010 to 1,137 GW by 2030. This will require significant capital – an annual average of $130 billion over 2010-30 compared with $86 billion in 2010.

The wind (on- and offshore) sector will continue to expand, attracting $140 billion in 2020 and $206 billion per annum by 2030 (2010: $82 billion). New areas of growth will come from European offshore wind and emerging markets in Latin America, Turkey, Africa and Australia. In those latter countries, there is a favourable combination of good resources and underlying power demand growth combined with a desire to diversify the energy mix. In addition, repowering will represent a significant market over the next 20 years in the US and Europe, where there are many older turbines on resource-rich sites.

The bioenergy sector will see renewed activity, with the commercialisation of second-generation technologies. Investment in biofuels, biomass and waste-to-energy is projected to increase from $14 billion in 2010 to $80 bilion in 2020 and then remain level over the next decade.

Guy Turner, director of commodity market research at Bloomberg New Energy Finance, said “these results indicate that last year’s record renewable energy investment was no one-off despite the recent economic gloom. Big winners over the next 20 years will be the emerging renewable energy hubs in Latin America, Asia, the Middle East and Africa – by 2020 the markets outside of the EU, US, Canada and China will account for 50% of global annual investment in renewable energy capacity.”

The analysis has drawn on the contribution of over 65 technical experts within Bloomberg New Energy Finance across all the main renewable energy technologies and geographical regions. The near-term section of the market outlook is based mainly on our detailed understanding of the construction pipeline in each sector, while further out, the forecasts model the interaction of energy policies in each region with the costs and resource availability of each technology in each major country. The analysis covers asset finance in all the main forms of renewable energy such as those used for power generation – including small distributed systems – heat and biofuels. The projections extend to 2030 across all renewable energy technologies and geographical regions.


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