Renewable Energy: Falling Prices

Despite the decline in investment in renewable energy by 14 %, almost half of all electric power plants of the world built in 2013 work on "green" energy. According to annual UNEP report cost of solar energy compared to 2009 fell by 25 %, and wind energy - by 53 %. Renewable energy market of the Russian Federation as a whole is estimated at 8.5-10 billion euros.

The latest edition of the authoritative annual report of the United Nations Environment Programme (UNEP) and Bloomberg New Energy Finance «Global trends in investing in renewable energy sources" tells about events, trends, "signs and signals" in financing of renewable energy.

The document contains statistical data, explores issues of investment, technology and regional peculiarities. The report authors highlight the political and economic instability, which is the background for development of renewable energy market. According to them, the total investment in 2013 fell by 14 % to $ 214 billion worldwide, reflecting the significant cost savings in this area. However, depression in the financial markets did not destroy the basis for green energy, it only spurred the development.

The researchers point out that the political map of green energy is changing. China becomes the world leader, having put $ 56 billion in renewable energy. Europe has left the list of leaders, suffering from budget deficits and having reduced investment by 44 %. However, there are exceptions: the United Kingdom increased investments by 12 %. For the first time in history, the British spend on renewable energy sources more than Germans.

Asia has improved its position. Japanese investment grew by 80 %. Experts attribute this trend to the mass installation of solar panels caused by the closure of nuclear power plants because of the accident at Fukushima NPP in 2011.

One of the important conclusions is that the cost of solar energy compared to 2009 fell by 25 %, and wind energy - by 53 %. As a result, more and "green" energy projects are implemented without any state support. Moreover, the stock prices of companies engaged in "clean" energy, increased by 54 % in 2013.

Achim Steiner, the UNEP Director comments the report data: "Now states shall have more confidence to enter into serious and strong agreement on climate."

Ulf Moslener from Frankfurt School of Finance and Management, one of the report authors, says: "With renewable energy sources, we avoided emissions of 1.2 billion tonnes of carbon dioxide in 2013. Along with hydropower, photovoltaic solar panels and wind power contribute to this most of all."

The authors of another study - International Group IBCentre – also make positive conclusions for renewable energy. Their report focuses on the prospects for development of renewable energy in Eastern Europe. According to these researchers, the segment of the solar energy will be the main focus for investments in the renewable energy market in Russia and CIS countries in 2014. They see Great future for solar energy in the region. The factor that will determine its active development in 2014 is the requirement of "local constituent" (provides for no less than 50 % of Russian components in the project). This can be implemented currently due to the presence of production of solar modules in the Russian Federation.

IBCentre predicts rapid growth of the market of engineering services in the field of renewable energy in the CIS in 2014. It will be formed mainly by experienced foreign actors. According to IBCentre assessments, the engineering industry market in the Russian Federation will be over 25 million euros next year, and will grow by 2020 up to 1.2 billion euros. Renewable energy market of the Russian Federation as a whole is estimated at 8.5-10 billion euros.

Along with the Russian market of solar energy, development of these sectors in 2014 is also expected in Kazakhstan, Uzbekistan and Belarus – due to active development of sector-specific legislation. In addition, a number of large projects can be implemented in Ukraine, where the mechanism of "green tariff" is in force. Based on different data, the authors of both reports consider that evidence shows the stability of renewable energy and good prospects for its development - its share continues to grow despite market fluctuations and economic difficulties.

UNEP report text: