The world added more solar capacity in 2017 than all new coal, gas and nuclear electricity-generating plants combined. That鈥檚 the headline conclusion of .
While that sounds promising, on closer examination there are some worrying numbers in the same report. They reveal that in most of the world, investment over the past few years has either changed little or fallen, often because of cutbacks in subsidies 鈥� showing that despite getting ever cheaper, wind and solar remain heavily dependent on government support.
In fact, investment in the developed countries whose emissions have caused most of the global warming so far has halved since 2011, to $103 billion. Most shocking is what is happening in Europe, which is meant to be leading the world in tackling climate change. There investment peaked at $126bn in 2011 and has now fallen to $41bn.
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The global figures would look quite grim were it not for the astounding efforts of China, where investment in renewables has soared over the last decade to hit a record $127bn last year. This means that in China alone, investors are now pouring more money into solar and wind power than in all the developed countries combined.
It鈥檚 important to point out that because the cost of building wind farms and solar plants has fallen sharply, every buck spent today creates far more electricity-generating bang than a decade ago. But if investment in developed countries had remained at 2011 levels, the world would be getting a lot more of its electricity from renewable sources than it is now.
And that matters. Despite the $3 trillion spent globally since 2004, just 12 per cent of the world鈥檚 electricity came from renewable sources in 2017, compared with 5 per cent in 2005 (these figures exclude large hydroelectric schemes and nuclear plants). This is projected to rise to 34 per cent by 2040, says the lead author of the report, Angus McCrone of Bloomberg New Energy Finance.
Slow progress
On the bright side, this shows the world is moving away from the stick-with-fossil fuels, business-as-usual scenarios. The bad news is that this is not happening anything like as fast as it needs to if we want to limit warming to not too much more than 2掳C.
What鈥檚 more, greening electricity is relatively easy. Electricity generation accounts for just a fifth of total global energy use, and reducing carbon emissions from sectors such as aviation and farming is a far greater challenge.
So why is investment in renewables plummeting in places such as Europe and Japan? Many factors are involved, say McCrone and his colleagues, but cuts in subsidies have played a big part. Take the UK, which has seen the biggest falls in investment, down 65 per cent in 2017 alone, after slashing green policies back in 2015.
These numbers fly in the face of the triumphalist narrative becoming common in much reporting on solar and wind power. The story being told is that wind and solar are now so cheap that they are inevitably going to replace all fossil fuels.
But we鈥檙e not quite there yet. Only 鈥渁 very few鈥� renewable projects are going ahead without some kind of government support, the report says.
What鈥檚 more, countries with a high proportion of electricity coming from intermittent renewables are struggling to integrate them into existing grids, say McCrone. This has not been as much of a problem as once thought, he says, but it is one of the reasons for falling investment in some places.
Another issue is profitability. If there鈥檚 a surplus of electricity whenever the sun shines or the wind blows, the price it can be sold for falls. So the idea that market forces alone will ensure solar and wind keeping growing until they replace all coal and gas plants is wrong.
But it鈥檚 not all bad news. Despite Donald Trump withholding funding promised as part of the Paris agreement, developing countries are now outspending developed countries 鈥� largely thanks to China. Even in the US, renewables investment fell just 6 per cent to $41bn.
What鈥檚 more, R&D in renewable energy rose to a record $10bn, thanks to companies boosting their spending by 12 per cent to match the $5bn spent by governments.
