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P7_Sonntag-O'brien P7_Sonntag-O'brien Presentation Transcript

  • Global Developments in the Sustainable Energy Markets Virginia Sonntag-O’Brien REN21 / UNEP SEFI Local Renewables 2007 Freiburg, 14 June 2007
  • An outcome of the Bonn renewables2004 conference MISSION Provide international leadership for the rapid expansion of renewable energy in developing and industrial countries – based on the cooperation of stakeholders from the energy, development and environment sectors.
  • • Strengthen policy frameworks for accelerating use of RE • Facilitate appropriate use of RE in developing countries, including strengthening the regulatory environment and expanding access to public and private financing • Build capacity to integrate, utilize, and regulate the use of RE at international, national, regional, and local levels • Facilitate collection, analysis, and dissemination of information
  • The UNEP Sustainable Energy Finance Initiative Foster a sustainable energy finance community that brings together financiers and catalyses public-private alliances to share costs and lower barriers to investment. http://sefi.unep.org Provide Information • Facilitate Networks • Develop Partnerships
  • SOME FACTS AND PREDICTIONS • Global warming trends very likely the result of human activities since 1750 (IPCC) • Most of this impact the result of the use of fossil fuels • The world needs more energy - 2/3 increase from 2001 - 2030 Experts predict doubling of energy use between 2000 and 2040, tripling by 2070, and quadrupling by 2100 • Most growth will take place in non-OECD countries • Fossil fuels will account for 83% of overall increase in energy demand up to 2030 (IEA) • Coal demand increases the most in absolute terms (China and India) • Oil is expected to remain the dominant energy source worldwide (IEA base scenario) • Renewable energy will account for 9% of power mix in 2030 (IEA WEO 2006)
  • What does this mean? • Energy demand must be better managed and reduced • Energy users must shift to low-carbon technologies like RE • New technologies must be developed that capture and sequester CO2
  • REN21 RE Global Status Report 2007 (DRAFT) SELECTED INDICATORS 2005 2006 Investment in Renewable Energy $39bn $52bn capacity (annual) RE power capacity - existing 182GW 204GW Wind power capacity - existing 59GW 74GW Grid-connected solar PV capacity 3.3GW 5.0GW (existing
  • Overall SE investment growing quickly • Investment has more than doubled in last two years. Further 20% increase forecast for 2007, taking global investment to $85 billion. • Drivers go beyond the big three (oil prices, energy security, climate change) to include many more environmental mainstream issues. $70.9bn 2006 figure is an NEF forecast 43% Growth $49.6bn 81% Growth $27.5bn 2004 2005 2006 Source: New Energy Finance Figure 1: Global Investment in Sustainable Energy, 2004 - 2006
  • VC/PE Investment Soaring • Venture Capital/Private Equity up 163% in one year. • Biofuels edged out solar and wind to raise the most risk capital in 2006. • Most investment in wind has been in manufacturing capacity, not new technology. • VCs shifting more to larger, later stage deals. • US dominates VC transactions. Clean tech in the US now ranks 5th in VC at 9.1%. • After the US, China was the second largest recipient of Venture Capital. Biofuels $804m Solar $746m $664m Wind Efficiency Demand Side : $272m Smart Distribution $163m Power Storage $134m Services & Support (Clean Energy) $127m Mfc. Capacity Technology $105m Fuel Cells Biomass and Waste $93m $36m Efficiency Supply Side : $35m Hydrogen Marine $31m $4m figures are up until mid - December Carbon Markets Source: New Energy Finance Figure 3: 2006 Venture Capital and Private Equity Investment by Sector
  • Public stock markets have opened to RE • Public markets up 140% in one year. • Solar PV is the big winner on public capital markets. • European stock markets are the main destination for IPOs. So ar l $4.4bn Biofuels $2.5bn Wind $1.2bn Other Lo Carb w on $1.2bn Other Renewables $0. 5bn Biomass & Waste $0.4bn Source: New Energy Finance Figure 4: Public Market Investment by Sector
  • Clean energy stocks volatile, but doing well • More corrections are expected, as happened in May 2006, but few predict crash. 325 rowth ued g er sectors in Cont to oth lated rre AMEX Oil unco 275 NASDAQ S&P 500 NEX ies nolog 225 Tech ojects r and p d as 175 s fuse y stock on og c RE hnol tec only 125 AMEX Oil, NASDAQ, and S&P 500 rebased – 30 December 2002 =100 75 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Figure 5. WilderHill New Energy Global Innovation Index (NEX) Source: New Energy Finance, AMEX
  • Financing for projects is still mostly for wind • Wind is still the big winner at raising asset financing for projects. • China the third largest location for asset financing, after US and Spain. Other Renewables $1.3bn Biofuels $6.4bn Biomass & Waste Wind $3.6bn $15.2bn Solar $1.4bn Source: New Energy Finance Figure 6. 2006 Asset Financing by Sector
  • VC/PE Investment in Energy Efficiency 2001-2006 Source: New Energy Finance Efficiency: Demand Side $1094m Power Storage (65/71) Smart Distribution Efficiency: Supply Side $710m (62/73) $477m $452m $441m $404m (28/31) (26/31) (54/58) (49/57) 2001 2002 2003 2004 2005 2006
  • Zur Anzeige w ird der QuickT im e™ Dek ompressor „TIFF (LZW)“ ben ötigt. SOME OBSERVATIONS Investment in new renewables Means that investors are expecting generating capacity - $21.5bn strong growth for RE Investment in new technology & manufacturing capacity - $25.2bn IEA WEO2006: RE (ex hydro) will Wind alone provided 10% of new provide 11% of new capacity capacity in 2006 and its growth has been additions between 2004 and 2015 >9x faster than the power sector as a whole (24.5% vs 2.6%) IEA WEO2006: RE will account for That would require RE growth rate to 9% of power mix in 2030 (12% under drop from >20% in 2006 to 8%. Alternative Scenario Measured by capital investment, renewable energy is already a much larger sector than current energy production figures indicate. Recent capital build up is not a sign of short-term volatility, but part of a longer trend. The trend has continued through the first half of 2007.
  • CHALLENGES Investment in energy still policy-driven and public priorities are not only climate change, but also energy security and energy access Developing countries have fast-growing energy demand and unstable capital markets, which skews investment towards fossil fuel generation (proven, understood, large-scale, less capital intensive) Regulatory frameworks needed that accelerate and reward investment to scale up deployment of sustainable energy technologies at a pace and to a level necessary to impact climate change
  • To do at the local level Encourage local industries to invest in R&D for sustainable energy technology Work with local finance institutions to develop awareness & capacity to engage in the sustainable energy sector Collect data and use it to influence policy
  • REN 21 Renewables Global Status Report 2007 to be released July 2007? www.ren21.net UNEP SEFI/New Energy Finance Global Trends in Sustainable Energy Investment 2007 to be released on 21 June 2007 www.sefi.unep.org THANK YOU!