Who’s Winning the Clean Energy Race? 2010 Edition

Executive Summary

The clean energy race is on. The investment and finance data presented in this report show that countries are jockeying for a leadership position in this growing and increasingly competitive sector. Countries with clear, consistent and constructive clean energy policies are powering investment forward.

This report examines key financial, investment and technological trends related to clean energy in the world’s leading economies, also known as the Group of Twenty(G-20). Our primary focus is on investment, which is the fuel that propels the innovation, commercialization, manufacturing and installation of clean energy technologies. The data have been compiled and reviewed by Pew’s research partner, Bloomberg New Energy Finance, a market research firm focused on renewable energy.

Our research shows that the clean energy sector around the world has roared back from flat recessionary levels, increasing 30 percent from 2009 to achieve a record $243 billion worth of finance and investment in 2010. More than 90 percent of all clean energy investments were directed to companies and projects in the G-20. Excluding research and development funding, clean energy finance and investment in the G-20 countries totaled $198 billion, 33 percent more than was invested in 2009.

Collectively, the European region was the leading recipient of clean energy finance, attracting a total of $94.4 billion. Europe’s leadership position was solidified by more than 100 percent growth in investment in small-scale solar installations in Germany and Italy. Rising among the ranks of top-10 countries for private clean energy investment, Germany and Italy attracted $41.2 billion and $13.9 billion, respectively.

Although small-scale solar energy investments helped Europe maintain its position as the leading region for clean energy finance in 2010, the Asian region is closing the gap rapidly and is expected in the coming months and years to become the center of gravity for clean energy investment. Overall clean energy investment in the Asian region increased 33 percent to $82.8 billion in 2010.

Asia/Oceania’s emergence is fueled in large part by the rapid rise of China as the world’s clean energy superpower. Private investment in China’s clean energy sector increased by 39 percent in 2010 to a world record $54.4 billion. China also is the world’s leading producer of wind turbines and solar modules. In 2009, it surpassed the United States as the country with the most installed clean energy capacity.

The Americas region is a distant third in the race for clean energy investment, attracting $65.8 billion overall in 2010. Investments in the United States rebounded 51 percent over 2009 levels to reach $34 billion, but the United States continued to slide down the top 10 list, falling from second to third. Given uncertainties surrounding key policies and incentives, the United States’ competitive position in the clean energy sector is at risk. Growth is sharper in Latin America, where private clean energy investment in Argentina increased by 568 percent and in Mexico by 273 percent, the highest growth rates among G-20 members.

Technologically, 2010 investments notably increased for solar energy, particularly for smallscale and residential projects. In the G-20, a record $79 billion was invested by the private sector in solar technologies, facilitating the installation of more than 17 gigawatts (GW) of new generating capacity. Compared with 2009, solar energy investments in 2010 increased by 53 percent, while investments in the wind sector increased by a more modest 34 percent. Still, wind energy remains the favored technology for private investment in the G-20 countries, accounting for 48 percent of total investments, or $95 billion.

Clean energy funding allocated by governments to help stimulate growth in response to the global economic recession rose sharply in 2010 to $75 billion, from $20 billion the prior year. Corporate and government research and development funding increased globally by 24 percent to $35 billion. Venture capital/private equity funding in the G-20 also rebounded strongly in 2010, up 26 percent over the previous year to $8.1 billion. Investment in G-20 small-scale distributed capacity rose 100 percent in 2010 to $56.4 billion.

Installation of 40 GW of wind and 17 GW of solar helped drive worldwide clean power generating capacity to 388 GW in 2010.

This report documents the continued growth and dynamism of clean energy investment in the world’s leading economies. It follows recent Pew research showing that policy priority for clean energy is well-placed: Investment in clean power assets alone could reach $2.3 trillion over the 2010-20 period.4 Countries that succeed in
attracting investment can realize the economic, security and environmental benefits of the global race to harness clean, renewable energy sources.

ABOUT THE REPORT
Who’s Winning the Clean Energy Race? 2010 Edition: G-20 Investment Powering Forward was developed for public informational and educational purposes. It is an update of The Pew Charitable Trusts’ March 2010 report Who’s Winning the Clean Energy Race? Growth, Competition and Opportunity in the World’s Largest Economies, which examined 2009 clean energy, finance and investment in the countries that make up the Group of Twenty (G-20). This report also follows on Pew’s December 2010 report Global Clean Power: A $2.3 Trillion Opportunity, which examines scenarios for private investment in renewable energy assets in G-20 nations over the next decade.

Pew’s international investment research complements ongoing efforts by the Pew Environment Group and the Pew Center on the States to chronicle the extent of jobs, businesses and investments in America’s clean energy economy.

Underlying data for this report were compiled for the Pew Environment Group by Bloomberg New Energy Finance, the world’s leading provider of news, data and analysis on clean energy and carbon market finance and investment. Bloomberg New Energy Finance’s global network of 100 analysts located across Europe, the Americas, Asia and Africa continuously monitor market changes, deal flow and financial activity, allowing instantaneous transparency into the clean energy and carbon markets.

A full description of the methodology and parameters employed for this report can be found in Appendix I.

Please download the full report for more detailed analysis

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