The annual value of renewable energy capacity installed will double in real terms to $395 billion in 2020, rising to $460 billion in 2030, according to a new analysis from Bloomberg New Energy Finance (BNEF).
This value compares to a renewable energy capacity value of $195 billion in 2010. As a result of the increase, within 20 years, 15.7% of total energy production will come from renewable energy sources (including large hydro), up from 12.6% last year, BNEF forecasts.
Europe will remain one of the biggest markets for money spent on renewable energy projects over the next three years, but with a dwindling share of world investment, as European Union (EU) governments scale back clean energy support in the face of sovereign debt problems. Growth in the European market will resume post-2015 as investment scales up to meet the EU 2020 renewable energy target.
China will surpass Europe to lead in renewable energy asset finance in 2014, spending just under $50 billion annually. The U.S. and Canada are also expected to see no lasting slowdown in project construction, together hitting $50 billion of investment in 2020.
The fastest growth will be seen in the rapidly developing economies of India, the Middle East, Africa and Latin America, with projected growth rates of 10% to 18% per year from 2010 to 2020.
Both onshore and offshore wind power will continue to expand, attracting $140 billion in 2020 and $206 billion per annum by 2030, BNEF says. New areas of growth will come from European offshore wind and emerging markets in Latin America, Turkey, Africa and Australia. In addition, repowering will represent a significant market over the next 20 years in the U.S. and Europe, where there are many older turbines on resource-rich sites.
According to BNEF, offshore wind will undergo the fastest percentage growth of all technologies, rising from 51 GW in 2010 to 1,137 GW by 2030.
"These results indicate that last year's record renewable energy investment was no one-off despite the recent economic gloom," says Guy Turner, director of commodity market research at BNEF. "Big winners over the next 20 years will be the emerging renewable energy hubs in Latin America, Asia, the Middle East and Africa. By 2020, the markets outside of the EU, U.S., Canada and China will account for 50% of global annual investment in renewable energy capacity."