According to Bloomberg New Energy Finance in 2010 $187 billion was invested in renewable energy from the wind, sun, waves and biomass compared with $157 billion invested in natural gas, oil and coal. Furthermore the IEA says that renewable energy is becoming increasingly cost competitive with fossil fuels.  For example, it has been argued that right now solar PV is approaching costs comparable to natural gas-fired peaking units.  Bloomberg NEF expects “wind to become fully competitive with energy produced from combined-cycle gas turbines by 2016 in most regions offering fair wind conditions.”  In Australia New research from the Australian National University shows that with the new carbon tax, solar PV retail grid parity will be reached in Australia this year.

                    Total 2010 investment

Fossil fuels    $157 billion

Renewables    $187 billion

According to the IEA the renewable electricity sector generates almost 20 percent of the world’s electric power.  Hydro power is the largest source of renewable electricity, responsible for about 16 percent of total power generation in 2009.  Non-hydro renewable electricity generation grew by nearly 74 percent between 2005 and 2009.  Wind has grown most rapidly in absolute terms. Solar has grown at an annual rate of 50.2 %.  Installed solar capacity reached about 40 GW at the end of 2010.

Subsidies

According to the IEA’s WEO-2011 report, fossil fuel subsidies far exceeded renewable energy subsidies last year. 

                    Subsidies

Fossil fuels    $409 billion

Renewables    $66 million

Subsidies for oil products represented almost half of the total fossil fuel subsidies. If current government policies remain the same, the cost of fossil-fuel consumption subsidies will reach $660 billion in 2020.  High oil prices are making the cost of subsidies unsustainable in many countries and  some governments are trying to reduce them.  Of 37 countries with subsidies, at least 15 have started to phase them out since 2010.

Global renewable energy subsidies increased from $39 billion in 2007 to $66 billion in 2010.  According to the IEA, subsidies will need to expand further to meet existing targets for renewable energy production. In one IEA scenario, subsidies to renewables would reach almost $250 billion by 2035.