In his 2011 report on the global trends of clean energy, Michael Liebreich, the Chief Executive of Bloomberg New Energy Finance paints an optomistic picture for the future. In his analysis, Liebreich considers clean energy as renewables, energy efficiency, power storage, smart grid, and carbon capture and storage but not nuclear. Worldwide investment in clean energy had been steadily increasing over the last ten years and took a dramatic drop during the economic crisis in 2007 and 2008. Investment has since picked back over the last three years and has continued to grow. Clean energy investment is currently 20% of all investment in the energy space with over 240 billion being invested worldwide in 2010. Some 60 billion of that is from what Liebreich calls “Clean Stimulus” from governments with the other 180 billion coming from private investors.
Liebreich expects that the increases in investment will continue at even greater rates as renewables approach cost competitiveness and argues that solar is already competitive when it is not attached to the grid and takes on transmission loses. This is evident by Germany’s recent investment of 10GW of PV rooftop units for buildings. Germany has a peak demand of under 80GW and, as can been seen in the figure below, has a photovoltaic resource comparable to that of Seattle which is among the worst places in the United States for solar radiation but continues to invest heavily in solar power.
Liebriech explains that the three largest players in the clean energy movement, China, Europe, and the United States each have a different strategy moving forward. China is using its cheap cost of capital and domestic demand to dominate the market for production of the current generation of technology and can do so at a similar quality with much lower costs. The United States is investing heavily in new technology and new projects (currently largely aided by the funds from the Reconstruction and Investment Act), while Europe is using feed in tariffs to generate its demand for clean energy. This leaves European clean energy manufacturers in a tough spot if the U.S. starts to license its technology to be manufactured in Asia and sold in Europe where the demand is high.
The report concludes that with costs for clean energy coming down and tragedies in the oil and nuclear industry which will lead to higher regulations and higher costs, coupled with instability raging in the Middle East, clean energy will be a major player in the future. Private equity and venture capital dollars will continue to pour in as the outlook for clean energy becomes more stable.