Clean Energy Investment Forecast for 2016

renewables-investment-trendsGlobal interest in clean energy technologies reached new heights last year and 2016 promises to be another record-breaker. The year 2015 witnessed installation of more than 121 GW of renewable power plants, a remarkable increase of 30% when compared to 2014. With oil and gas prices tumbling out to unprecedented levels, 2016 should be a landmark year for all clean energy technologies. As per industry trends, solar power is expected to be the fastest-growing renewable power generation technology in 2016, closely followed by wind energy. Among investment hotspots, Asia, Africa and the Middle East will be closely watched this year.

Investment Forecast for 2016

Clean energy is rapidly becoming a part of mainstream investment portfolios all over the world. In 2016, a greater attention will be focused on renewable energy, mainly on account of the Paris Framework and attractive tax credits for clean energy investments in several countries, especially USA.

Infact, the increasing viability of clean energy is emerging as a game-changer for large-scale investors. The falling prices of renewable power (almost 10% per year for solar), coupled with slump in crude oil prices, is pulling global investors away from fossil fuel industry. At the 2016 UN Investor Summit on Climate Risk, former US vice president Al Gore said, “If this curve continues, then its price is going to fall “significantly below the price of electricity from burning any kind of fossil fuel in a few short years”.

There has been an astonishing growth in renewable generation in recent years. “A dozen years ago, the best predictors in the world told us that the solar energy market would grow by 2010 at the incredible rate of 1 GW per year,” said Gore. “By the time 2010 came around, they exceeded that by 17 times over. Last year, it was exceeded by 58 times over. This year, it’s on track to be exceeded by 68 times over. That’s an exponential curve.”

China will continue to dominate solar as well as wind energy sectors

China will continue to dominate solar as well as wind energy sectors

As per industry forecasts, China will continue its dominance of world PV market, followed closely by the US and Japan. Infact, USA is anticipated to overtake Japan as the second largest solar market this year. India, which is developing a highly ambitious solar program, will be a dark horse for cleantech investors. The top solar companies to watch include First Solar, Suntech, Canadian Solar, Trina Solar, Yingli Solar, Sharp Solar and Jinko Solar.

Morocco has swiftly become a role model for the entire MENA. The government’s target of 2GW of solar and 2GW of wind power by 2020 is progressing smoothly. As for solar, the 160MW Noor-1 CSP is already commissioned while Noor-2 and Noor-3 are expected to add a combined 350MW in 2017.

China will continue to lead the global wind energy market in 2016, and is on course to achieve its target of 200 GW of installed wind capacity by 2020. Other countries of interest in the wind sector will be Canada, Mexico, Brazil and South Africa. The major wind turbine manufacturers to watch are Siemens, Vestas, Goldwind, Gamesa and GE.

Conclusion

To sum up, the rapid growth of global renewable energy sector in the past few years is the strongest signal yet for investors and corporations to take the plunge towards green energy and low-carbon growth. As the UN chief Ban Ki-moon famously said, “It marks the beginning of the end of growth built solely on fossil fuel consumption. The once unthinkable has now become unstoppable.”

Waste Management in Global North and Global South

Waste management is highly context specific. Therefore it is important to distinguish between the conditions in the Global North and the Global South. Recent ILO figures suggest that 24 million people around the world are involved in the informal waste recycling sector, 80% of whom are waste pickers. Some estimates say that 1% of urban population in developing countries makes their primary household income through informal sector waste management activities.  In Latin America alone, 4-5 million waste pickers earn their livelihood by being a part of the global recyclables supply chain.

Municipal budgets in the Global South are often limited and only a small percentage of that budget is assigned to waste management as compared to other municipal services. In the Global North waste management is recognized as a necessary public good and there is a greater willingness to pay for this service. Solid waste management (e.g. waste collection, transportation and recycling) is generally more labour intensive than in North America and Europe.

Urbanization in the Global South is often haphazard and unplanned; creating pockets of high and low income neighbourhoods. This creates logistical issues for the waste management service provision limiting options for viable waste collection and transportation. It is often the informal sector that steps in to fill this service gap.

The maturity and strength of the legal framework differs between the Global South and Global North. In North America and Europe the legal framework of waste management actively promotes and provides incentives for waste reduction, reuse and recovery whereas, despite recent developments in some countries, in Latin America legal frameworks remain focused upon mixed waste collection, transportation and disposal.

Recycling rates in Argentina are at 11% of the total waste stream with 95% of this material is recovered by the informal sector. This situation is replicated in many other countries. The informal sector recovers between 50% (e.g. Mexico) and 90% (e.g. Nicaragua) of the waste recovered and in the different countries of the region. Resource recovery and recycling is driven by market conditions. Materials that have a value are diverted from landfill through an informal network of recyclers and waste collectors.

The composition of waste is also very different in the Global South where organic waste is a much larger percentage of the waste stream. Because of the high percentage of organics in the waste stream in many cities in the Global South, innovations in decentralised composting and small scale biogas have been seen across the Global South (particularly in India) and can be used effectively by the informal sector, making a zero waste future a real possibility.

Role of Informal Recycling Sector

The informal sector can be highly effective at collecting and diverting garbage from landfill. When empowered with a facilitating legal framework, and collectively organized, the informal sector can be a key part of a sustainable resource recovery system. Using people power to increase recycling and diversion rates decreases the need for expensive, fixed, high technology solutions.

Understanding that the context for waste management is different between the Global North and Global South, and even in different areas within a city or region, means that no two situations will be the same. However, if there is one principle to follow it may well be to consider the context and look for the simplest solution. The greenest cities of the future may well be those that use flexible, adaptable solutions and maximize the work that the informal sector is already doing.

Note: This excerpt is being published with the permission of our collaborative partner Be Waste Wise. The original excerpt and its video recording can be found at this link