'Investments in renewable energy reach USD 100 bn in 2006'

BANGKOK: Climate change worries, high oil prices and increasing government support top a set of drivers spurring soaring investments in the renewable energy and energy efficiency industries, which reached USD 100 billion last year, a new UN report says.

The report on "Global Investment in Renewable Energy, 2004-2006" by the United Nations Environment Programme (UNEP) released Thursday revealed that investment capital flowing into renewable energy last year was a record, climbing from USD 80 billion in 2005 and showing no sign of abating.

The report says that investors poured USD 71 billion into companies and new sector opportunities in 2006, a 43 percent jump from 2005 or up 158 percent over the last two years, and the trend is continuing in 2007 with experts predicting such investments of USD 85 billion this year.

In addition to the USD 71 billion, about USD 30 billion entered the sector in 2006 via mergers and acquisitions, leveraged buyouts and asset refinancing.

While renewable sources today produce about two percent of the world's energy, they now account for about 18 percent of world investment in power generation, with wind generation at the investment forefront. Solar and bio-fuel energy technologies grew even more quickly than wind, but from a smaller base, the report says.

Renewables now compete head-on with coal and gas in terms of new installed generating capacity and the portion of world energy produced from renewable sources is sure to rise substantially as the tens of billions of new investment dollars bear fruit.