China alone accounted for 36% of the global total, as the country pins it hopes on clean energy as a means of combating air pollution. Chinese investment rose 17% from 2014 to 2015, totalling $103bn.
This surge is likely to continue for years to come, as China’s recently-unveiled new five-year plan places a strong emphasis on new renewable energy.
The rise in renewable investment comes even as fossil fuel prices suffered sharp falls last year. However, as the report covers 2015 it may not have fully captured the continued depression in fossil fuel prices, which may have further effects on investment in new generation in future.
In the US, money committed to renewables rose strongly as new rules took effect. Although investment was up by a fifth, to $44bn, it was still less than half of China’s.
Europe, once world leader in clean energy, gave one of the worst showings.Investment fell by a fifth to $49bn, despite a surge in offshore wind, according to the report, which was co-authored by Bloomberg New Energy Finance and the Frankfurt School of Finance and Management.
In part, these headline investment figures reflect falling costs, particularly for solar panels, which have tumbled in price by more than 60% since 2009. But they also illustrate the need for politicians to play a role in encouraging clean technology, according to Mitchell.
“Globally, we are seeing a rapid take up of renewables alongside a switch to more energy-efficient and flexible electricity systems. Technology changes are facilitating that transition, but increasingly it is governments that are holding it back, as policy makers are failing to put in place policies that can keep up,” she told the Guardian.
“This is particularly the case in the EU, that has been prone to a ‘boom and bust’ approach to renewables deployment [by which an initial enthusiasm from politicians is followed by a rowing back as the costs of subsidies become apparent], which will see [member states] lose out to countries that can provide more long-term policy clarity.”
Solar power had a particularly good year, according to Unep, with a 12% increase in investment to $161bn globally, while the boost to wind was much smaller, an increase of about 4% in dollar terms to $110bn.
Biomass energy plants and biofuels also dropped significantly, as did geothermal energy systems and wave and tidal energy. Many green campaigners are likely to cheer the diminishing investment in controversial biofuels – down 35% to $3bn – and biomass – a fall of 42% to $6bn, when waste-to-energy plants are included.
But the relatively tiny amounts invested in the promising geothermal technology, which dropped by more than a fifth to $2bn, and the paltry showing of marine energy – a plunge of 42% to only $215m – will be of concern to those hoping that these technologies could plug the gaps for regions where solar and wind power are less practical.
Unep also warned that it was far from certain that the strongly positive trends for clean energy would continue, especially as the recent falls in fossil fuel prices were only beginning in the year the report examined.
“Policy support for renewables remains fickle,” the authors cautioned, pointing to the UK government’s withdrawal of incentives, and the US supreme court decision delaying Barack Obama’s clean power plan. “It is also possible that the recent big fall in coal, oil and gas prices may tempt some developing countries to keep relying on fossil fuel capacity for longer.”