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GSR 2015

22 SOLAR THERMAL HEATING AND COOLING: NEW MARKETS GROWING, ESTABLISHED MARKETS SLOWER Deployment of solar thermal technologies continued to slow, due largely to declining markets in Europe and China. Cumulative capacity of water collectors reached an estimated 406 GWth by the end of 2014 (with air collectors adding another 2 GWth), providing approximately 341 TWh of heat annually. China again accounted for about 80% of the world market for solar water collectors, followed by Turkey, Brazil, India, and Germany. The trend continued towards larger domestic water heating systems in hotels, schools, and other large complexes. There also was growing interest in the use of advanced collectors for district heating systems, solar cooling, and industrial applications, although advanced systems represent a small fraction of the global market. In much of Asia, parts of Africa, and Latin America, domestic sales expanded, as did distribution channels, in response to strong market growth in certain segments. By contrast, it was a difficult year for the industry in Europe, where consolidation continued. China’s industry was troubled by overcapacity due to weak demand in 2014, but China maintained its long-term lead. WIND POWER: THE CHEAPEST OPTION FOR NEW POWER GENERATION The global wind power market resumed its advance in 2014, adding a record 51 GW—the most of any renewable technology—for a year-end total of 370 GW. An estimated 1.7 GW of grid-connected capacity was added offshore for a world total exceeding 8.5 GW. Wind energy is the least-cost option for new power generating capacity in an increasing number of locations, and new markets continued to emerge in Africa, Asia, and Latin America. Asia remained the largest market for the seventh consecutive year, led by China, and overtook Europe in total capacity. The United States was the leading country for wind power generation. Wind power met more than 20% of electricity demand in several countries, including Denmark, Nicaragua, Portugal, and Spain. After years of operating in the red, most turbine makers pulled back into the black with all the top 10 companies breaking installation records. Turbine designs for use on- and offshore continued to evolve to improve wind’s economics in a wider range of wind regimes and operating conditions. INVESTMENT FLOWS GLOBAL INVESTMENT UP IN ALL REGIONS Global new investment in renewable power and fuels (not including hydropower >50 MW) was up 17% over 2013, to USD 270.2 billion. Including the unreported investments in hydropower projects larger than 50 MW, total new investment in renewable power and fuels reached at least USD 301 billion. Renewables outpaced fossil fuels for the fifth year running in terms of net investment in power capacity additions. This first increase in three years was due in part to a boom in solar power installations in China and Japan, as well as to record investments in offshore wind projects in Europe. All regions of the world experienced an increase relative to 2013. Investment in developing countries was up 36% from the previous year to USD 131.3 billion. Developing country investment came the closest ever to surpassing the investment total for developed economies, which reached USD 138.9 billion in 2014, up only 3% from 2013. The most significant dollar increase occurred in China, which accounted for almost two-thirds of developing country investment in renewable power and fuels. The Netherlands and Brazil saw the largest percentage increases. Other top countries included the United States, Japan, the United Kingdom, and Germany. Investment continued to spread to new markets throughout 2014, with Chile, Indonesia, Kenya, Mexico, South Africa, and Turkey each investing more than USD 1 billion in renewable energy. Solar power and wind were the leading technologies by far in terms of dollars committed, with solar power (mostly solar PV) accounting for more than 55% of new investment in renewable power and fuels (not including hydro >50 MW), and wind power taking 36.8%. Both saw significant increases over 2013: solar power investments rose 25% to USD 149.5 billion, and wind advanced 11% (to USD 99.5 billion). Overall, in 2014, more than a quarter of new investment in renewable energy went to small- scale projects (particularly solar PV). Geothermal power investment grew by 23%, and ocean energy (up 100%) also fared well although from a very low level. Other renewables did less well: biofuels declined 8% to a 10-year low, biomass and waste-to-energy dropped 10%, and small-scale hydropower slipped 17%. All investment types saw increases over 2013, with asset finance of utility-scale projects accounting for the vast majority of total investment. The year 2014 also saw the creation of two new South-South development banks: the USD 100 billion New Development Bank created by the five BRICS countries, and the Asian Infrastructure Investment Bank created by 23 Asian countries. The expansion of new investment vehicles for renewables—such as green bonds, yield companies, and crowdfunding—have attracted new classes of capital providers and are helping to reduce the cost of capital for financing renewable energy projects.

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