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Renewables Deliver ‘More for Less’, But Global Investment Falls Far Short

Global renewable energy capacity excluding large hydro grew 9% in 2016, even though renewables investment fell 23%, according to a report released last week by the United Nations Environment Programme (UNEP) and Bloomberg New Energy Finance.

“Ever-cheaper clean tech provides a real opportunity for investors to get more for less,” said UNEP Executive Director Erik Solheim. “This is exactly the kind of situation, where the needs of profit and people meet, that will drive the shift to a better world for all.”

“It’s a whole new world,” added BNEF Chair Michael Liebreich. “Instead of having to subsidize renewables, now authorities may have to subsidize natural gas plants to help them provide grid reliability.”

Liebreich noted that, “after the dramatic cost reductions of the past few years, unsubsidized wind and solar can provide the lowest-cost new electrical power in an increasing number of countries, even in the developing world — sometimes by a factor of two.”

ThinkProgress lists winning bids in competitive auctions last year of $29.10 to $60 (2.91¢ to 6¢ per kilowatt-hour) for solar, US$30 to $37.70 for onshore wind, and $55 to $80 for offshore wind. “For context,” notes Climate Progress Founding Editor Joe Romm, “the average U.S. residential price for electricity is 12¢ per kWh.”

The analysis documented $242 billion in non-hydro renewables investment in 2016, “3% less than 2015 and the lowest since 2013,” Carbon Brief reports. Large hydro received $23 billion, a 48% drop from 2015.

Even so, UNEP and BNEF noted that non-hydro renewables received twice as much investment as fossil energy last year, and accounted for 55% of new installed capacity. “The switch to renewables was one of the main reasons for greenhouse gas emissions staying nearly flat in 2016, for the third year in a row, even though output in the global economy rose by 3.1%,” InsideClimate News reports.

More aggressive investments are needed in renewable energy, however, to meet sustainable development goals set by the United Nations in September 2015,” InsideClimate notes. “Those seek to end poverty, improve health and education, and combat climate change, and include ambitious clean energy targets that would double the share of renewable energy in the global energy mix by 2030.

The gap between achievement and reality came home loud and clear in a Global Tracking Framework report released last Tuesday by the World Bank and the International Energy Agency (IEA), cited by ICN. Renewables as a share of global energy consumption reached 18.3% in 2014, but its growth rate was “nowhere near fast enough” to hit a 36% target by 2030.

“This year’s Global Tracking Framework is a wake-up call for greater effort on a number of fronts,” said World Bank Senior Director Riccardo Puliti, head of the agency’s energy and extractives group. “There needs to be increased financing, bolder policy commitments, and a willingness to embrace new technologies on a wider scale.”

Last month, the IEA calculated that global renewables investment will have to average $3.5 trillion per year through 2050 to meet the Paris agreement goal of holding average global warming “well below” 2.0°C.