Benjamin Kafri, Bloomberg New Energy Finance

Global energy investment in clean energy has increased from around $52bn in 2004 to $243bn in 2010 including: technology development; equipment and manufacture scale up; projects and asset/company mergers; and acquisitions and refinancing. Drivers of growth have included rooftop solar in the EU and investment in China which in 2010 totalled around $47bn, more than double any other country. The levels of investment have varied between different indexes, with many showing a sharp decline in 2008/09 compared to historic growth. Over the next 3 years it is anticipated that 2011 will show strong levels of investment, but 2012 is expected to be difficult with the expiring of US subsidies, a peak in wind in China, EU economic problems and fading green stimulus packages; other potential influences include falling technology costs, the potential for low gas prices, the quick deployment of electric vehicles and the impact of emerging economies. Within the UK there is a large growth in renewables and power prices are not incentivising new thermal plant. The risk of the lights going out is slim, but increasing renewables deployment may cause problems around intermittency and/or negative prices in times of low demand.  It is suggested that these potential challenges do not warrant pre-emptive intervention in the power market.

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