China Leads G-20 in Clean Energy Finance and Investment

For the first time, China led the U.S. and other G-20 members in 2009 clean energy investments and finance, according to data released Thursday by The Pew Charitable Trusts.

Last year, China invested $34.6 billion in the clean energy economy—nearly double the U.S. total of $18.6 billion. Over the past five years, the U.S. also trailed five G-20 members (Turkey, Brazil, China, the United Kingdom, and Italy) in the rate of clean energy investment growth.

In Who’s Winning the Clean Energy Race? Growth, Competition and Opportunity in the World’s Largest Economies, Pew examines key financial, investment and technological trends related to G-20 members and the clean energy economy. Pew found that the global clean energy economy has experienced remarkable growth:

• Globally, clean energy investments have increased 230% since 2005.
• Investment by nearly all G-20 members grew by more than 50% over the past five years.
• Despite a worldwide recession, global clean energy investments reached $162 billion in 2009.
• G-20 members accounted for more than 90% of worldwide clean energy finance and investment.
• More than 250 GW of renewable energy generating capacity have been installed around the world, producing 6% of global energy.
• Global clean energy investments are projected to reach $200 billion in 2010.

"Even in the midst of a global recession, the clean energy market has experienced impressive growth," said Phyllis Cuttino, who directs the Pew Environment Group’s Global Warming Campaign. "Countries are jockeying for leadership. They know that investing in clean energy can renew manufacturing bases, and create export opportunities, jobs and businesses."

Countries with strong nationwide policy frameworks, including renewable energy standards, carbon markets, priority loans for renewable energy projects and mandated clean energy targets, such as China, Brazil, Spain, United Kingdom and Germany, have the most robust clean energy sectors as a percentage of their economies. Countries without such policy frameworks including the U.S., Japan, and Australia lag behind.

U.S. clean energy finance and investments lagged behind 10 G-20 members in percentage of gross domestic product. For instance, in relative terms, Spain invested five times more than the U.S. last year, and China and the United Kingdom three times more.

The U.S. did lead G-20 members in venture capital and private equity investments associated with technology innovation. However, it trailed in 2009 asset financing, with only $11.2 billion, while China led with $29.8 billion. Asset financing serves as a key barometer of clean energy deployment, job creation and business growth.

On the Plus Side . . . In related news, on Monday, U.S. Department of Energy Secretary Steven Chu announced the availability of $37.5 million in U.S. funding over the next five years to support the U.S.-China Clean Energy Research Center. Funding from the DOE will be matched by the grantees to support $75 million in total U.S. research that will focus on advancing technologies for building energy efficiency, clean coal including carbon capture and storage, and clean vehicles.

The Clean Energy Research Center will be located in existing facilities in both the U.S. and China and will include an additional $75 million in Chinese funding. Applications for grants are due by Friday, May 14.

On the Negative Side . . . On Friday, BP announced that it will close its solar panel manufacturing facility in Maryland. The company will move manufacturing to China, India, and elsewhere to save costs. Approximately 320 positions will be eliminated out of 430 positions at the $70 million Frederick location, which opened just three and a half years ago.

All solar technology manufacturing is not lost, however. The Washington Post reported that other companies, “including Yingli Solar of China, Schott Solar of Germany and Kyocera Solar of Japan—are planning to open facilities in the United States” in anticipation of increased U.S. demand for solar technology products.

Sources: Pew Environment Group, DOE, BP, Washington Post