U.N. climate chief Christiana Figueres calls this fund a “golden key” in the negotiations; an important tool to reassure poor nations that wealthy nations are serious about global warming mitigation.  The Fund aims to raise $100 billion a year in climate aid by 2020.

Although there is little hope of securing a binding legal treaty in Cancun, negotiators are optimistic about this “Green Fund” proposal.  However, Mexico’s Foreign Minister Patricia Espinoza warned that the climate aid fund is only one part of a broader climate package which needs attention.   Unresolved issues remain, including methods for clean energy technology sharing and mechanisms to protect vulnerable forest land.

U.S. climate envoy Todd Stern concurred, saying “We are not going to move on the Green Fund, and the $100 billion, if issues central to the Copenhagen Accord, including mitigation and transparency, don’t also move.”  Stern reiterated that President Obama is still committed to trimming U.S. greenhouse gas emissions by 2020, despite the Senate’s lack of progress in passing comprehensive climate legislation. The U.S. is the world’s only major developed nation without a legal cap on greenhouse gas emissions.

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The following is an excerpt from Clean Energy Trends 2010. To read the full report, please download the PDF file by clicking here

2009 will go down as one of the worst years in economic history. Overall venture capital spending fell to its lowest level in more than a decade. Initial public offerings (IPOs) in the U.S. continued at historic lows, with just 13 venture-backed IPOs in 2009 (up only slightly from a meager six venturebacked IPOs in 2008), according to Thomson Reuters and the National Venture Capital Association. Once stalwart financial and market leaders crumbled under new harsh economic realities, with many shuttering their operations or surviving as a mere shell of their former selves. Governments around the world, working to stave off a global depression, announced unprecedented commitments to stimulus programs to keep the global economy on life support.

But signs of hope have begun to emerge for the clean-tech sector. From Beijing to Seoul, and Washington, D.C. to Brussels, clean energy has become a driving force for economic recovery. Approximately $100 billion of the $787 billion stimulus package in the U.S. will go to clean-tech investments and activities; South Korea’s “Green New Deal” is estimated to commit $84 billion to clean-tech investments by 2013; and China, by some estimates, could end up spending $440 billion to $660 billion toward its clean-energy build out over the next ten years. And while total venture activity was down, clean energy’s percent of the total continued to increase, to 12.5 percent of total venture activity in 2009 in the U.S. alone.

Against this backdrop, combined global revenue in 2009 for solar photovoltaics (PV), wind power, and biofuels expanded by 15.8 percent over the prior year, reaching $144.5 billion. All three sectors saw an increase in total deployment, with increased revenue for both biofuels and wind power. Solar, however, saw its first decrease in total revenue over the prior year since Clean Edge began tracking global revenues in 2000. This was a direct result of the rapid decline in solar PV pricing (see “Steep PV Price Drops Redefine the Solar Industry” on page 10).

According to our research:

* Biofuels (global production and wholesale pricing of ethanol and biodiesel) reached $44.9 billion in 2009 and are projected to grow to $112.5 billion by 2019. In 2009 the biofuels market consisted of more than 23.6 billion gallons of ethanol and biodiesel production worldwide.

* Wind power (new installation capital costs) is projected to expand from $63.5 billion in 2009 to $114.5 billion in 2019. Last year’s global wind power installations reached a record 37,500 MW. China, the global leader in new installations for the first time, accounted for more than a third of new installations, or 13,000 MW.

* Solar photovoltaics (including modules, system components, and installation) will grow from a $36.1 billion industry in 2009 to $116.5 billion by 2019. New installations reached just more than 7 GW worldwide in 2009, a sevenfold increase from five years earlier, when the solar PV market reached the gigawatt milestone for the first time. But because of rapidly declining solar PV prices, industry revenue between 2008 and 2009 was down about 6 percent – from a revised $38.5 billion in 2008 – as solar prices dropped from an average $7 peak watt installed in 2008 to $5.12 peak watt installed last year.

Together, we project these three benchmark technologies, which totaled $124.8 billion in 2008 and grew 15.8 percent to $144.5 billion in 2009, to grow to $343.4 billion within a decade.

U.S. Venture and Global Clean-Energy Investments:

In 2009, U.S.-based venture capital investments in energy technologies declined from $3.2 billion in 2008 to $2.2 billion in 2009, according to Bloomberg New Energy Finance. However, as a percent of total VC investments, energy tech grew from 11.4 percent in 2008 to 12.5 percent in 2009. This represented the largest share in the history of the clean-energy asset class.

The global growth rate in clean-energy investments, across a wide range of investment categories, declined as well, impacted by the overall economic climate. However, government investments helped soften the blow and clean-energy investments still remain at near-historic levels. According to New Energy Finance, new global investment in clean energy declined from $155.4 billion in 2008 to $145.3 billion in 2009. This figure includes investments made by VC and private equity investors; public market activity (IPOs, etc.); project financing; asset financing; government research & development; and corporate research, development, & deployment.

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The funding support, coming in the form of subsidies and loan guarantees, will accelerate over the years, eventually reaching €290 million/year by 2014.  The program aims to attract an additional €2 billion from private investors and other research groups.

France’s extensive use of nuclear-fired plants has contributed to the country’s claim to 90% low carbon electricity.  However, President Sarkozy’s administration is furthering efforts to develop renewable energy sources such as solar and wind.  The new funding will also support sustainable transportation initiatives and smart grid technology developments.

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Renewables

• Total renewable power capacity in China reached 226GW in 2009, representing 1/4 of the nation’s total.  The government is calling for a total of 500GW of renewable power capacity by 2020, or about 1/3 of total power capacity.
• Renewable Portfolio Standards (RPS) for Chinese utilities require 8% of all capacity and 3% of power to be generated from non-hydro renewables by 2020.
• Revisions to the 2005 Renewable Energy Law will require increased cooperation between new renewables and the grid to ensure the generated power is transmitted efficiently.  The revisions also strengthened the Ministry of Finance’s renewable energy fund, which collects a tax on all electric power sales.

Wind

• Chinese wind power in particular grew thirty times over between 2005-2009.   China is now just behind the U.S. in total installed wind capacity.  Its turbine manufacturing industry grew to the world’s largest in 4 years.  The government has amended the wind power Feed-in-Tariff, and aims for 150GW of new installations by 2020.

Solar

• The “Golden Sun” program, introduced in 2009, will provide generous subsidies for solar PV installations.  Currently 300 projects have been proposed, totaling nearly $2.9 billion in investment.

Nuclear

• China has expanded its pledge to achieve 15% of all primary energy from “non-fossil fuel sources” by 2020.  This expanded directive will allow nuclear power to be included in the total accounting.

Carbon

• New carbon intensity targets were announced in Dec 2009, which aim to reduce the carbon intensity of GDP by 40-45% by 2020 relative to 2005 levels.

Energy Efficiency

• The 5 Year Plan for 2006-2010 aims to increase energy efficiency by 20%, including pumps, fans, boilers and the production of materials like steel and cement.

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Greece’s  €12 billion investment plan includes urban improvement projects, new natural gas pipelines and storage facilities in northern Greece.  The government hopes to attract a total of €22 billion in external private investment in the coming decade.  Environment Minister Tina Birbili hopes the program will “decisively contribute to face recession and lead to dynamic economic growth.”

Although Greece has ample wind and solar resources, renewable energy contributed only 4% of the nation’s electricity generation in 2009.  However, by 2020 Greece has pledged to ramp up renewables’ share to 40% of its total electrical output.

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Sworn in last month to replace previous leader Kevin Rudd, Gillard said she is “committed to Australia’s largest ever investments in solar and other renewables.”

Gillard has not made specific mention of the controversial carbon cap-and-trade system which former PM Rudd had championed.

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Abengoa Solar is the recipient of the first offer, $1.45 billion to help finance the construction and start-up of a concentrating solar power (CSP) plant in Arizona.  Once operational, the “Solana” plant would add 250MW of electric capacity to the grid, enough to power 70,000 homes and reduce carbon dioxide emissions by 475,000 tons.

A loan of $400 million was also offered to Abound Solar Manufacturing to for the manufacture of thin-film cadmium telluride solar panels, the first time such manufacturing will be deployed anywhere in the world.  When completed in 2013, the manufacturing plant will be capable of producing enough panels to support up to 840MW of new solar every year.

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Data from The Cleantech Group and Deloitte shows that solar energy garnered about 40% of all investments, attracting about $811 million in funding.

“There’s been a very clear resurgence in solar activity and that is largely responsible for the strong quarter,” notes Richard Youngman, head of global research for the Cleantech Group.

Scott Smith, Deloitte’s U.S. clean tech leader believes this VC investment trend will have a positive impact on renewables and low carbon industries.    “The significant strengthening of corporate and utility investment into the clean tech sector, relative to 2009, is very encouraging, given the key role they will play in enabling broader adaptation of clean technologies at scale,” he said in a statement.

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Energy efficiency investments emerged as a major theme from the survey results.   More than 82% of respondents expected to make energy efficiency investments over the next year, and 92% of those polled said energy costs would be high on the list of priorities over that time period.

Melanie Steiner of Ernst & Young said these results show that despite uncertainty over climate change, “companies are really taking action anyway, because they’re seeing that this is a business issue and an opportunity to generate new revenue.”

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The deals, designed to increase cooperation in the sector, cover areas such as aviation biofuel, distributed energy systems using natural gas as fuel, smart meters and cellulosic ethanol, the China Daily reported. A number of Chinese and U.S. companies would be involved in the eight deals.

The report quoted analysts that the agreements between the world’s two largest energy users would encourage global collaboration in increasing energy efficiency and protecting the environment.

The agreements came at the conclusion of the two-day China-U.S. Strategic and Economic Dialogues in Beijing.

Zhang Guobo, head of the National Energy Administration, also noted bilateral collaboration in renewable energy development, adding: “The United States has advanced technology, and China has a huge market,” the China Daily reported.

U.S. Ambassador to China Jon Huntsman was quoted as saying the two countries will “take every angle” to ensure their cooperation in energy and environment.

Zhang said renewable energy development is important for China to achieve goals of increasing the use of non-fossil energy to 15 percent of primary energy use by 2020, and reducing carbon intensity by 40 percent to 45 percent in 2020 from 2005 levels, China Daily reported.

He said China will continue to focus on the development of hydro, wind, solar, and biomass energy in the renewable sector.

Earlier, U.S. Energy Secretary Steven Chu was quoted as saying improving energy efficiency would both reduce greenhouse gas emissions and boost economic growth.
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