This report reveals some surprising facts about renewable energy, many reflecting strong growth trends and increasing significance relative to conventional energy.

• About $30 billion was invested in renewable energy worldwide in 2004 (excluding large hydropower), a figure that compares to conventional power sector investment of roughly $150 billion. Investment in large hydropower was an additional $20–25 billion, mostly in developing countries.
   
• Renewable power capacity totals 160 gigawatts (GW) worldwide (excluding large hydropower), about 4 percent of global power sector capacity. Developing countries have 44 percent of this capacity, or 70 GW.
   
• Renewable energy generated as much electric power worldwide in 2004 as one-fifth of the world’s nuclear power plants, not counting large hydropower (which itself was 16 percent of the world’s electricity).
   
• The fastest growing energy technology in the world is grid-connected solar photovoltaic (PV), which grew in existing capacity by 60 percent per year from 2000–2004, to cover more than 400,000 rooftops in Japan, Germany, and the United States. Second is wind power capacity, which grew by 28 percent per year, led by Germany, with almost 17 GW installed as of 2004.
   
• Rooftop solar collectors provide hot water to nearly 40 million households worldwide, most of these in China, and more than 2 million geothermal heat pumps are used in 30 countries for building heating and cooling. Even so, biomass-fueled heating provides five times more heat worldwide than solar and geothermal combined.
   
• Production of biofuels (ethanol and biodiesel) exceeded 33 billion liters in 2004, about 3 percent of the 1,200 billion liters of gasoline consumed globally. Ethanol provided 44 percent of all (nondiesel) motor vehicle fuel consumed in Brazil in 2004 and was being blended with 30 percent of all gasoline sold in the United States.
   
• There were more than 4.5 million green power consumers in Europe, the United States, Canada, Australia, and Japan in 2004, purchasing power voluntarily at the retail level or via certificates.
   
• Direct jobs worldwide from renewable energy manufacturing, operations, and maintenance exceeded 1.7 million in 2004, including some 0.9 million for biofuels production.
   
• Renewable energy, especially small hydropower, biomass, and solar PV, provides electric power, heat, motive power, and water pumping for tens of millions of people in rural areas of developing countries, serving agriculture, small industry, homes, schools, and other community needs. Sixteen million households cook and light their homes with biogas, and two million households use solar lighting systems.

Policies to promote renewables have mushroomed over the past few years. At least 48 countries worldwide now have some type of renewable energy promotion policy, including 14 developing countries. By 2005, at least 32 countries and 5 states/provinces had adopted feed-in policies, more than half of which have been enacted since 2002. At least 32 states or provinces have enacted renewable portfolio standards (RPS), half of these since 2003, and six countries have enacted national renewable portfolio standards since 2001. Some type of direct capital investment subsidy, grant, or rebate is offered in at least 30 countries. Most U.S. states and at least 32 other countries offer a variety of tax incentives and credits for renewable energy. The U.S. federal production tax credit has applied to more than 5.4 GW of wind power installed since 1995.

Policy targets for renewable energy exist in at least 45 countries worldwide, including 10 developing countries, all 25 European Union (EU) countries, and many states/provinces in the United States and Canada.Most targets are for shares of electricity production, typically 5–30 percent, by the 2010–2012 timeframe. There is an EU-wide target of 21 percent of electricity production by 2010. China’s target of 10 percent of total power capacity by 2010 (excluding large hydropower) implies 60 GW of renewables capacity by 2010, up from today’s 37 GW.

Municipalities around the world are also setting targets for future shares of renewable energy for government consumption or total city consumption, typically in the 10–20 percent range. Some cities have established CO2-reduction targets.Many cities are enacting a variety of policies for promoting solar hot water and solar PV, and conducting urban planning that incorporates renewable energy.

Brazil has been the world leader in promoting biofuels for the past 25 years. All gasoline sold must be blended with ethanol, and all gas stations sell both pure ethanol and ethanol blends. In addition to Brazil, mandates for blending biofuels into vehicle fuels have been enacted in at least 20 states/provinces worldwide and two countries (China and India).

Renewable energy has become big business. Large commercial banks are starting to take notice, and several are “mainstreaming” renewable energy investments in their lending portfolios. Other large investors are entering the renewable energy market, including venture capital investors and leading investment banks like Morgan Stanley and Goldman Sachs. Major investments and acquisitions have been made in recent years by leading global companies, such as GE, Siemens, Shell, BP, Sanyo, and Sharp. Five of the largest electrical equipment and aerospace companies in China have decided to enter the wind power busi- PAGE 5 RENEWABLES 2005 GLOBAL STATUS REPORT ness. Combined, 60 leading publicly-traded renewable energy companies, or renewable energy divisions of major companies, have a market capitalization of at least $25 billion.

Half a billion dollars goes to developing countries each year as development assistance for renewable energy projects, training, and market support, with the German Development Finance Group (KfW), the World Bank Group, and the Global Environment Facility (GEF) providing the majority of these funds, and dozens of other donors and programs providing the rest.

Government support for renewable energy was on the order of $10 billion in 2004 for the United States and Europe combined, including direct support (“onbudget”) and support from market-based policy mechanisms (“off-budget”). This includes more than $700 million per year in research and development spending.

The costs of many renewable energy technologies are declining with technology improvements and economies of scale in production. Solar and wind power costs are now half what they were 10–15 years ago. Many renewable technologies can compete with retail and even wholesale prices of conventional energy under good conditions, even as conventional technology costs also decline (offset by increased fuel prices).

Market facilitation organizations (MFOs) are supporting the growth of renewable energy markets, investments, industries, and policies through some combination of networking, information exchange, market research, training, partnering, project facilitation, consulting, financing, policy advice, and other technical assistance. A preliminary list shows at least 150 such organizations around the world, including industry associations, non-governmental organizations, multilateral and bilateral development agencies, international partnerships and networks, and government agencies.