A record US$367 billion was invested in renewable energy in 2015, according to a new report out today by the Clean Energy Canada initiative of the Centre for Dialogue at Simon Fraser University.

Renewables investment increased by seven percent since 2014, with China, the US, and Japan representing more than half of the total investment last year, shows the report.

The report also finds that for the first time, more money was invested in clean energy than in new power from fossil fuel ($253bn).

This unprecedented scale of investment is particularly remarkable given the significant drop in oil prices over the last year.

“Turmoil in fossil fuel markets led many analysts to suggest clean energy investment would similarly stall out. How could renewable energy possibly compete with cheap oil, gas and coal?” asks the report.

As it explains: “New clean energy deals were widely expected to stall last year as the price of oil and other fossil fuels declined around the world. Instead, growth in the clean energy sector beat expectations, delivering the best year yet.”

Lower Costs

According to the report, declining technology and financing costs have helped to spur growth in renewable energy. For example, between 2009 and 2015 the cost of wind power in the US dropped 61 percent, while the cost of solar power fell 82 percent.

Much of the speculation was the result of a lack of understanding of renewable energy technology, trends and markets, explained Dan Woynillowicz, policy director at Clean Energy Canada.

While renewable energy competes head to head with natural gas (unlike with oil) “it has a range of attributes that make it attractive,” said Woynillowicz, “energy security, zero air pollution, price certainty, zero carbon, etc.”

Woynillowicz continued: “Renewable energy costs keep falling – and will keep falling – and the long-view suggests they will outcompete natural gas.”

“It’s also worth noting,” he added, “that as the costs fall, it means we get more energy for every dollar invested. So if investment remains stable or increases, we’ll see greater amounts of renewable energy actually deployed.”

Globally, wind power deployment led the way last year, up 31 percent since 2014 with nearly 64 GW installed, with deployment in solar power growing 23 percent.

“The fuel – sun, wind, water – is free,” Merran Smith, executive director of Clean Energy Canada, said in a statement. “There’s no wonder clean energy is gaining momentum around the world.”

“Clean energy is taking off because it offers value that can’t be beat – it’s local, so it offers energy security. It’s a climate solution. It reduces health issues from smog. It’s increasingly competitive, and there’s big money to be made.”

Developing Countries

Last year also marked the first time that developing countries saw more investment in renewable energy ($167bn) than developed nations ($162bn).

India took fifth place for the most clean energy investment in 2015 ($10.9bn) behind China ($110.5bn), the US ($56bn), Japan ($43.bn), and the UK ($23.4bn). Meanwhile, renewable investment in Canada dropped 46 percent from $7.4bn in 2014 to $4bn last year.

As the report describes, 2015 saw a “geographical broadening of clean energy as more developing countries got in on the action.”

Between 2014 and 2015 investment in clean energy in Africa and the Middle East grew 54 percent, up £13.4bn.

Going forward, the report predicts that both of these regions have “significant” potential for clean energy growth due to their growing populations and abundance of wind and solar resources.

Woynillowicz also expects the “staggering rate of investment and deployment” in China to continue. Meanwhile India, which has set aggressive renewable energy targets, will also be one to watch, but Woynillowicz asks: “Will they prove effective and efficient in attracting and deploying capital?”

Going Mainstream

With more than a third of a trillion dollars invested worldwide in renewables last year, Clean Energy Canada is optimistic, stating that “clean energy is going mainstream.”

“That’s serious money,” Smith writes in the report. “Clean energy has real momentum and the commitments underpinning the Paris Agreement on climate change will keep that momentum going.”

The report’s findings are “very encouraging” agreed Woynillowicz, “especially recognising that we saw a third of a trillion invested before the Paris agreement.”

We should expect to see more money being driven into renewables over the next few years Woynillowicz predicts, due to the continued increase in cost competitiveness of renewables and progress in reducing costs of energy storage technologies, combined with the climate benefits of renewables and goals set in the Paris Agreement.

Photo: Tony Webster via Flickr

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This is a guest post by Sarah Petrevan, senior policy adviser at Clean Energy Canada, a program of Simon Fraser University’s Centre for Dialogue.

The big energy story this week in Canada is pipelines. Yet again. 

Why? There’s controversy, for starters, but it’s also the fact that energy exports — especially oil — make up a big chunk of Canada’s exports, and we’re an export-driven economy.

Fair enough. But it’s time we started focusing more attention on our opportunity to export energy technologies and services, not just raw energy. As UN Environment Programme chief Achim Steiner said recently on CBC’s Power and Politics, "Whether you build the next pipeline or not… the economy of Canada will not be centred around a fossil-fuel based extractive economy."

That’s in no small part why Ontario Premier Kathleen Wynne is in India this week.

There are always domestic politics tied to these trade missions, but there is both need and value for Canadian leaders — from government and clean energy companies — to travel abroad, seeking out new business opportunities. If Canada is going to play in the increasingly competitive global clean energy marketplace, we need to sell our industry and the climate solutions they offer.

Let’s unpack this.

Not two months ago, the world raised the bar on climate action by signing an agreement to replace fossil fuels and build a clean global economy. An unlikely leader at the forefront of that charge is India, with a commitment to install 175 gigawatts of renewable energy by 2022. A top-three player according to Ernst & Young’s Renewable Energy Country Attractiveness Index, it’s not surprising that clean energy businesses are flocking to India, including those based in Canada.

Why? The size of the prize.  

The reality is, for Canadian companies, prospects at home are looking lean, especially in the near term. While we’ve seen sizable renewable electricity targets from both Alberta and Saskatchewan, policy details have yet to be unveiled and even then it will take time for projects to ramp up.

And while Ontario has held the top spot in renewable electricity for the last few years, topping out at $12.7 billion in investment by the end of 2014, there are many unanswered questions as to what’s next for clean energy as the province considers its supply strategy.  

For companies looking to grow, there is little choice but to look beyond our borders.

Enter India — with the right mix of commitment, investment and policy — the next clean energy frontier.  

With a formal target of 100 gigawatts of solar capacity (and 60 gigawatts of wind) by 2022, India is a giant market for clean energy companies. According to Bloomberg New Energy Finance data, the dollars are matching those commitments. In 2015, India saw $10.9 billion of clean energy investment, a 22 per cent increase over 2014, with nearly half ($5.2 billion) in solar. This is not to say that the clean energy revolution in India is easy; finding land and the state of power transmission infrastructure have posed challenges for the country. But with policy approaches ever evolving to meet the country’s power needs, there’s no sign India is slowing down on its commitment any time soon.

In fact, many Canadian companies have already seized business opportunities in India. When Prime Minister Narendra Modi visited Canada last April, solar power deals — one with AMP Solar Group and the other with Canadian Solar, a big player on the Indian market — comprised more than $1 billion, or 63 per cent of the value of the total agreements signed.

Another success story for Canadian solar in India is Sarus Solar, a joint venture comprising of three Canadian firms that is planning a series of 500 megawatt solar parks, the first of which will be built in Maharashtra. According to Sarus Solar’s head of operations India, Arun Agarwal, "The Canadian firm saw huge potential in the solar sector in India, especially after the government announced its target.”

Finally let's point to Canada’s SkyPower Global who, last summer, made the lowest bid of INR 5.17 per kilowatt hour (equivalent to USD$0.081) as part of the 2 gigawatt solar tender in the Indian state of Telangana. Subsequent actions have secured even lower bids, yet Canadian companies are clearly in the game in India.

Exporting clean energy solutions reaps benefits for Canadians and Canadian companies.

While the ongoing pipeline controversies make headlines, an important Canadian success story is being written outside our borders. And it’s a story worth telling here at home.

Image: Canadian Solar installation in India.

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BY KYLA MANDEL AND BRENDAN MONTAGUE IN PARIS

Oil rich Saudi Arabia is leading a campaign to sabotage attempts by countries on the front line of climate change to include an ambitous 1.5C target for global warming in the COP21 agreement currently being negotiated in Paris. 

Wealthy nations – including Germany, France and now the United States – have all signalled support for including references to the lower target in the final text, as negotiators reach the end of the first week of negotiations.

The oil producing giant last night blocked efforts to include references in the Paris deal to a UN report that says it would be better to limit global warming to 1.5C above pre-industrial levels rather than the current 2C target.

Saleemul Huq, director of the International Centre for Climate and Development, argues that the difference between a temperature increase of 1.5 degrees and two degrees “is roughly 1.5 million people who will fall through the cracks and most of them will be in vulnerable and developing countries.”

Thoriq Ibrahim, the Maldives envoy and chair of the alliance of small island states (AOSIS), said the 1.5C was a “moral threshold” for his country.

Arab Block

Emmanuel de Guzman, head of the Philippines delegation, said: “The momentum for raising the level of ambition in Paris now opens the exciting possibility for a truly historic and transformational summit. We salute France and Germany and call for more countries to join in the call for 1.5C to protect human rights globally.”

Todd Stern, the US special envoy for climate change, told reporters today that concerns raised by island nations over passing a 1.5C global warming temperature rise threshold are “legitimate”.

“We are in active discussions with the islands and others about finding some way to represent their interests in having 1.5C referenced [in the Paris text] in some way,” Stern said. “We haven’t landed anywhere yet but we hear the concerns of those countries and we think these concerns are legitimate.”

Former New York City Mayor Michael Bloomberg has also come out in favour of a strong target. When asked about the 2C target today at the COP21 conference, Bloomberg said: “I don’t know if that’s the right target. The target should be zero [emissions] or reducing.”

But Saudi Arabia is now being accused of prioritising its oil-based economy over the survival of vulnerable nations. This goes efforts by a coalition of vulnerable countries to push the global community to adopt a new 1.5 degree global warming target.

The Climate Action Network tonight named Saudi Arabia "Fossil of the Day". A spokesman said: "The Saudi delegation here in Paris is doing its best to keep a meaningful mention of the 1.5 degree global warming limit out of the agreement. 

"The Saudi’s are trying to torpedo three years of hard science, commissioned by governments, that clearly shows 2 degrees warming is too much for vulnerable communities around the world. Saudi Arabia is fighting tooth and nail to ensure the Paris agreement basically says, 'thanks, but no thanks' to 1.5 degrees warming."

Substantive Discussions

Sven Harmeling, CARE International’s climate change advocacy coordinator, explained: “Saudi Arabia is blocking these very substantive discussions going forward and [from] allowing ministers to understand what’s going forward.”

"Overall we see increasing support for including the 1.5 limit in the Paris Agreement, with more than 110 countries in support, although some countries see it only in connection to below 2 degrees language. That adds pressure to those who see their fossil future threatened by a truly ambitious target," Harmeling told DeSmog UK.

"However, Saudi Arabia may also want to use this to bargain on other issues which the vulnerable countries might not, e.g. in relation to other issues of the mitigation ambition package (such as long-term emission reduction goal), or response measures which is about the impacts of emission reduction i.e. reduction of fossil fuel consumption."

Meanwhile, OPEC oil producing countries are also attempting to block language on turning economies away from fossil fuels – something generally agreed by everyone else in the negotiations.

Saudi Arabia is the 13th richest country in the world yet it refuses to make any financial contribution to the fight against climate change – this is despite claims to represent the poorest developing nations and support the end of fossil fuels.

In contrast, countries with smaller economies than Saudi Arabia – including the UK, EU, France, Canada, Australia, Sweden and Germany – have already contributed climate finance and will continue to do so.

King Salman bin Abdulaziz, the Saudi leader, did not speak at the COP21 opening on Monday. But Ali bin Ibrahim Al-Naimi, the Saudi Minister of Oil, has said: “In Saudi Arabia, we recognise that eventually, one of these days, we are not going to need fossil fuels. I don’t know when, in 2040, 2050 or thereafter.

“The kingdom [plans] to become a ‘global power in solar and wind energy’ and could start exporting electricity instead of fossil fuels in coming years."

Saudi Arabia says it will make some investment in renewables and slowly reduce its dependence on fossil fuels. The country is the world’s 10th largest CO2 emitter – more than the UK, Canada, Brazil, Australia, Indonesia and France – and it has failed to make any emission reduction pledge.

What's more, there is a strong caveat within Saudi's climate pledge, which points out the country still relies on a “robust contribution from oil export revenues to the national economy”. 

Saudi is also looking to water down language about aligning broader financial flows to be compatible with climate objectives – ensuring that revenues raised by oil do not go back into polluting investments – which will be essential if there is to be a managed and orderly clean economic transition.

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Although the heads of 125 states are gathering at UN Headquarters in New York today to discuss global commitments to reducing greenhouse gas emissions that cause climate change, Stephen Harper will be elsewhere.

Instead Canada’s prime minister will arrive in New York in two days time to attend the UN’s Every Woman, Every Child event on September 25th.

The UN Climate Summit is intended to “galvanize and catalyze climate action” in advance of the Paris COP climate talks in 2015 where countries will form binding agreements to address global warming.

President Barack Obama will announce a new executive order today that directs all federal agencies to include climate concerns in international aid and development initiatives.

China’s president Xi Jinping, India’s prime minister Narendra Modi and Australian prime minister Tony Abbott have also announced they will not attend the summit.

China announced vice premier Zhang Gaoli will attend in the president’s place and Canada will send environment minister Leona Aglukkaq in Harper’s stead.

China is the number one emitter of greenhouse gas emissions, followed by the U.S. and India. Canada and Australia are eighth and fourteenth, respectively, according to data released by the European Commission.

In the lead up to the summit UN Secretary General Ban Ki-moon said “this is the time for decisive global action.”

“I have been pleased to see climate change rise on the political agenda and in the consciousness of people worldwide,” he said. “But I remain alarmed that governments and businesses have still failed to act at the pace and scale needed.”

UN climate chief Christiana Figueres said the absence of a few world leaders will not affect the credibility or outcomes of the summit.

“This is not something that will stop on September 24,” Figueres said, adding, “rather what is important is the strength of commitments and action of all governments moving forward up and until we deliver a new universal agreement in Paris.”

On Sunday an estimated 400,000 people participated in what is being heralded as the largest climate march in history. Support for the People’s Climate March came from across many sectors of society, showing a growing climate concern from religious, youth, business and investment groups.

Figueres said that growing involvement in cross-sector climate action is also represented in climate summit participants.

“The inclusion of business at the summit and over the past few years is frankly a recognition that climate change is not a one person or one sector issue,” she said.

“It cannot be solved by one country, one sector or one level of government. Climate is an every-person issue, and it requires everyone to work collaboratively in order to reach the solutions to the level and at the speed we need to find.”

Recently prime ministers Harper and Abbott hosted a press conference in Canada where they criticized government actions to make polluters pay for carbon emissions.

At the press gathering Harper said, “No country is going to undertake actions on climate change, no matter what they say, no country is going to [take] actions that are going to deliberately destroy jobs and growth in their country. We are just a little more frank about that, but that is the approach that every country is seeking.”

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