Potential market for renewable energies is US$1.9 trillion, says UN
BONN, Germany, 2004-06-09 (Refocus Weekly)
The potential market for renewable energy around the world during the next 15 years is US$1.9 trillion, but only if ‘real concerns’ by the financial sector are addressed.
“The world needs more energy but conventional sources are unsustainable and
finite,” says Thomas Loster of the Munich Reinsurance Company and chair of the
Climate Change Working Group at the United Nations Development Programme (UNEP).
Policymakers must create confidence in the long-term future of the renewable
energy market by policies that make deals financially attractive.
The UNEP group has released ‘CEO Brief: Renewable Energy,’ to present the
business case for renewables and to call for more leadership from governments
and more action by financial institutions. The study was released at the
international conference for renewables in Germany as part of the Sustainable
Energy Finance Event, the largest gathering of leaders in the sustainable energy
finance sector.
The report details several case studies highlighting both the opportunities and
the challenges in financing renewables, and represents the work of Citigroup,
Dresdner Bank, Munich Re, ANZ, Garant, HypoVereinsbank and Aviva. One of its
major recommendations is for governments to create targets and 15-year schedules
for the production of renewables.
“Renewable energy has to supply a greater share of the world's energy
requirements,” it states. The estimated market for renewables is $1.9 trillion
by 2020 and the financial sector has a “key role to play in developing and
promoting this market.”
“Renewable energy is both a solution and a business opportunity; however,
there are still some significant barriers to capturing this promise,” it
explains. “The most important thing that policymakers can do is create
confidence in the long-term future of the renewables market by policies that
make ‘the deal on the table’ attractive financially.”
Other recommendations call for government to “refocus energy policy and adopt
full-pricing for non-renewables in a progressive schedule; provide a tapered
support program for renewables, gradually eliminating subsidies; and simplify
and clarify the regime for renewable energy projects and carbon finance.” It
says key financial institution decision-makers should be kept well-informed
about climate change and renewable energy technologies, and multilateral and
national public sector financial institutions should support the transfer to
renewable technologies adequately.
For the finance sector, it recommends development of an effective approach for
small-scale renewables, such as ‘bundling’ small projects, fast-track
process for small business, and support for start-ups. It also wants them to re-organise
internally to provide a focus on renewables and to improve awareness on
renewable energy prospects and developments.
“Since conventional fuels received long-term subsidies in the past (and still
do in many cases), government support in the form of financial incentives for
the development of renewable energy is necessary in order to create a level
playing field,” it concludes. Renewables currently supply only 2% of primary
energy for power generation globally, but “our goal should be 100% by 2100,
and the debate merely how we get there.”
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