Energy Efficiency Grows as Clean Energy Investment Falters

Solar and wind surge in China, but slow globally

3 min read
Energy Efficiency Grows as Clean Energy Investment Falters
Illustration: The Pew Charitable Trusts

Global investment in clean energy fell 11 percent in 2013. Despite the downward shift, there are still some bright spots that highlight the future of the world’s clean tech industries.

Investment in solar, wind, biofuels, biomass, energy efficiency and energy storage was US $254 billion in 2013, according to a new report [PDF] from Pew Charitable Trusts.

While the stars of the market, wind and solar, have slipped, the unused kilowatt—aka energy efficiency—saw a 15 percent growth in the past year. Investment might be down overall, but 2013 was still a record setting year that also saw energy storage take a foothold in the market.

Solar and wind, with more than $170 billion in investment combined, still make up the lion’s share of the clean tech industry. But energy efficiency, which includes smart meters and energy storage, was the only sector that saw increased investment, with a total of nearly $4 billion in 2013. Most of the efficiency investment was in the United States, where there is an increased focus on saving energy at the state and federal level.

“While there was an overall decline in investment, there are signs that the sector is reaping the rewards of becoming a more mature industry,” Phyllis Cuttino, director of Pew's clean energy program, said in a statement. “Prices for technologies continue to drop, making them increasingly competitive with conventional power sources. Key clean energy stock indexes rose significantly in 2013, with public market financing up by 176 percent.”

Although the United States led in energy efficiency, Asia is leading the clean tech charge overall with 10 percent growth. China dominated with more than $54 billion in investments in 2013, including a near four-fold increase in solar growth.

“With extensive manufacturing capacity in the solar and wind sectors, growing domestic markets, and unequaled national targets for renewable energy, China is poised to be a leader in the world’s clean energy marketplace for many years to come,” the report authors wrote. Even so, China’s investment was down 6 percent from 2012.

China’s slight decline was offset by the growth in the Japanese market, which is driven by feed-in tariffs for wind and solar. Those incentives were presented as a way to advance renewables as an alternative to nuclear power that went offline in the wake of the 2011 Fukushima nuclear disaster. Japanese clean tech investment was up 80 percent in 2013 to nearly $30 billion, putting it third behind China and the United States.

Overall, the European clean tech market has dropped considerably, driven by tighter investment in Germany and Italy in particular. The U.K. is one bright spot for clean energy in Europe, with 13 percent growth in 2012. Most of the growth came in the wind sector, but the UK is also second in the G-20 in terms of “other renewables” because of its investment in biomass.

In the Americas, Canada jumped ahead with a nearly 50 percent growth in investment, also mostly driven by wind. Ontario, in particular, has a goal of completely shutting down its coal-fired electricity generation. But solar was up too, attracting $2.5 billion of the country’s $6.5 billion investment.

Canada, the U.K., and Japan were the only G-20 countries that saw growth, but non G-20 markets grew by 15 percent overall. “Markets for clean energy technologies in fast-growing developing countries are prospering, because these economies view distributed generation as an opportunity to avoid investments in costly transmission systems,” said Pew's Cuttino.

Distributed solar is expected to keep growing in the United States and Japan. Mexico and Turkey each have legislation that could jump start the clean tech industries, according to the report. South Korea is investing in efficiency to manage peak demand. China will continue to lead, however, with goals of 18 gigawatts of wind and 14 gigawatts of solar in 2014. 

“In view of industry maturation,” the Pew authors wrote, “Bloomberg New Energy Finance projects a 2014 rebound in worldwide investment and installation of renewable energy.”


Image: Pew Charitable Trusts

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Smokey the AI

Smart image analysis algorithms, fed by cameras carried by drones and ground vehicles, can help power companies prevent forest fires

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The 2021 Dixie Fire in northern California is suspected of being caused by Pacific Gas & Electric's equipment. The fire is the second-largest in California history.

Robyn Beck/AFP/Getty Images

The 2020 fire season in the United States was the worst in at least 70 years, with some 4 million hectares burned on the west coast alone. These West Coast fires killed at least 37 people, destroyed hundreds of structures, caused nearly US $20 billion in damage, and filled the air with smoke that threatened the health of millions of people. And this was on top of a 2018 fire season that burned more than 700,000 hectares of land in California, and a 2019-to-2020 wildfire season in Australia that torched nearly 18 million hectares.

While some of these fires started from human carelessness—or arson—far too many were sparked and spread by the electrical power infrastructure and power lines. The California Department of Forestry and Fire Protection (Cal Fire) calculates that nearly 100,000 burned hectares of those 2018 California fires were the fault of the electric power infrastructure, including the devastating Camp Fire, which wiped out most of the town of Paradise. And in July of this year, Pacific Gas & Electric indicated that blown fuses on one of its utility poles may have sparked the Dixie Fire, which burned nearly 400,000 hectares.

Until these recent disasters, most people, even those living in vulnerable areas, didn't give much thought to the fire risk from the electrical infrastructure. Power companies trim trees and inspect lines on a regular—if not particularly frequent—basis.

However, the frequency of these inspections has changed little over the years, even though climate change is causing drier and hotter weather conditions that lead up to more intense wildfires. In addition, many key electrical components are beyond their shelf lives, including insulators, transformers, arrestors, and splices that are more than 40 years old. Many transmission towers, most built for a 40-year lifespan, are entering their final decade.

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