A brand new, broad measure of ‘power transition funding’, compiled by BloombergNEF (BNEF), exhibits that the world dedicated a document $501.three billion to decarbonisation in 2020, beating the earlier 12 months by 9% regardless of the financial disruption attributable to the Covid-19 pandemic.

BNEF’s evaluation exhibits that corporations, governments and households invested $303.5 billion in new renewable power capability in 2020, up 2% on the 12 months, helped by the biggest-ever build-out of photo voltaic tasks and a $50 billion surge for offshore wind.

Up to $139 billion was spent on electrical automobiles and related charging infrastructure, up 28% and a brand new document. Other areas of power transition funding additionally confirmed power. Domestic set up of energy-efficient warmth pumps got here to $50.eight billion, up 12%, whereas funding in stationary power storage applied sciences resembling batteries was $three.6 billion, degree with 2019 regardless of falling unit costs.

Global funding in carbon seize and storage (CCS) tripled to $three billion, and that in hydrogen was $1.5 billion, down 20% however the second-highest annual quantity thus far.

Albert Cheung, head of study at BNEF, stated: “Our figures present that the world has reached half a trillion a 12 months in its funding to decarbonize the power system. Clean energy technology and electrical transport are seeing heavy inflows, however have to see additional will increase in spending as prices fall. Technologies resembling electrical warmth, CCS and hydrogen are solely attracting a fraction of the funding they’ll want within the 2020s to assist convey emissions below management. We should be speaking about trillions per 12 months if we’re to fulfill local weather targets.”

A geographical cut up of BNEF’s power transition funding information exhibits that Europe accounted for the largest slice of world funding, at $166.2 billion (up 67%), with China at $134.eight billion (down 12%) and the US at $85.three billion (down 11%). Europe’s spectacular efficiency was pushed by a document 12 months for electrical automobile gross sales, and one of the best 12 months in renewable power funding since 2012.

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Jon Moore, chief govt of BNEF, provides: “The coronavirus pandemic has held again progress on some tasks, however total funding in wind and photo voltaic has been sturdy and electrical automobile gross sales jumped greater than anticipated. Policy ambition is clearly rising as extra international locations and companies decide to net-zero targets, and inexperienced stimulus applications are beginning to make their presence felt. Some 54% of 2016 emissions are actually below some type of net-zero dedication, up from 34% at the beginning of final 12 months. This ought to drive rising funding within the coming years.”

Figure 1: Global power transition funding, 2004-2020

Source: BloombergNEF. Note: electrified warmth figures start in 2006; electrified transport in 2016; hydrogen and CCS in 2018.

Renewable power funding

Global funding in renewable power capability moved up 2% to $303.5 billion in 2020. This was the second-highest annual determine ever (after 2017’s $313.three billion), and the seventh consecutive whole of greater than $250 billion. Falling capital prices enabled document volumes of each photo voltaic (132GW) and wind (73GW) to be put in on the idea of the modest improve in greenback funding.

Highlights of the renewables funding whole included a leap of 56% in financings of offshore wind tasks to $50 billion, together with the most important deal ever in that sub-sector – $eight.three billion for the two.5GW Dogger Bank mission within the UK North Sea. The 12 months additionally noticed the most important single photo voltaic park ever funded, the 2GW Al Dhafrah within the United Arab Emirates, at a value of $1.1 billion.

Overall, photo voltaic capability funding was up 12% at $148.6 billion, and wind (onshore and offshore) down 6% at $142.7 billion. Biomass and waste-to-energy financings had been down three% at $10 billion.

In phrases of areas, renewable power…

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