Who has become the new global leader in renewable energy spending?

2015 was a milestone year for recording the countries leading the way in investment into renewable energy. Just 10 years ago global investment in renewable energy amounted to $72 billion compared with 2015’s figures of $286 billion. Much of this rise can be attributed to the growth of rapidly developing countries where renewable energy markets are becoming much more attractive for potential investors. 

 

This new drive in investment looks to have been triggered by news that renewable energy commitments in the developing world amounted to $155.9 billion (19% increase) while investment in the developed world fell 8% to $130.1 billion. 

 

Who is leading the way?

It is China who has emerged as the global leader in terms of investment in to renewable energy. The last 5 years has seen the nation surge past the European Union – the former market leader. 2015 saw China invest $102.9 billion, a figure that is 17% up on its own investment and responsible for an impressive 36% of the global investment total.

This new drive to renewable and cleaner energy is not surprising when you consider the recent decline in China’s total emissions. 

Low carbon electricity sources now make up 28% (19% the previous year) of China’s production and this has seen emissions decline by 1.5%.

Who else is investing in renewables?

Apart from China, there are many other nations that are making the switch to sourcing more energy from renewables.

Emerging markets such as Argentina, Brazil, China, Chile, India and Mexico are rising up the rankings at a considerable pace. 

"Emerging markets are transforming their energy industries at an unprecedented pace," said Ben Warren, Global Power & Utilities Corporate Finance Leader at Ernst & Young.

The chart below shows which other countries are contributing to and investing in renewable energy development. 


 

What’s prompted the change?

Within the developed world renewable energy is still very much a transitional energy source due to established infrastructure, a report by cloud-based software company, Mercatus, explains.

By comparison, the infrastructure in the developing world is still playing catch up. Therefore renewable sources of energy could represent a lower cost and more reliable alternative to traditional fossil fuel-based generation projects

Reliability is key, explains Achim Steiner, UNEP (United Nations Environment Programme) Executive Director: “Access to clean, modern energy is of enormous value for all societies, but especially so in regions where reliable energy can offer profound improvements in quality of life, economic development and environmental sustainability.”

What next? 

Emerging markets now represent half of the countries in the 40-strong RECAI (The Renewable Energy Country Attractiveness Index). 

On the back of these findings, developing nations look set to continue topping the charts when it comes to investment into renewables.