The international initiative aims to formalise and strengthen the global approach to clean technology.
10 years ago, the world spent less than US$25 billion per year on renewable power. Now it is spending US$400 billion per year. Across the world today, renewable energy is increasingly able to compete with fossil fuels in the power sector. A lot of policy coordination, public-private partnerships, use of concessional finance. went into transforming this market. Today, we see international coordination on innovation through Mission Innovation.
The term “energy revolution” is often used lightly. But the extraordinary rise of renewable power over the past 15 years is surely worthy of the description. Since 2000, the amount of electricity produced by solar power has doubled seven times over and wind power four times.1 In 2013, the world added more renewable power generation capacity than oil, natural gas and coal-based generation combined.2 By 2015, clean energy was receiving twice as much investment as conventional fuels.3
It’s a historic shift that is only set to gather pace. Market analysts at Bloomberg New Energy Finance (BNEF) expect 60% of global power capacity to come from zero-emission sources by 2040.4 In financial terms, the figures are equally staggering. Of the US$11.4 trillion flagged for investment in global power generation by 2040, BNEF forecasts that US$7.8 trillion will go into renewable energy.5
In large part this is a story about price. As the industry has grown, technological learning and economies of scale have driven costs down dramatically.6 Every time that globally installed capacity has doubled, prices have tumbled – by a global average of 24% for solar, 22% for Li-ion batteries7 and 14% for wind.8 And again, the pattern looks set to continue: by the 2020s, onshore wind and solar are expected to be the cheapest electricity-generating technologies in many countries around the world.9
A combination of both public and private sector drivers has helped create this renewable energy boom. Subsidies, including massive feed-in tariffs in countries like Spain, Germany and Denmark and loan guarantees in the US have played a role, as has the availability of cheap capital for Chinese clean-tech firms, large-scale investment in photovoltaic manufacturing capacity, particularly in China, and hit-and-miss Silicon Valley clean tech ventures.10 This ad hoc blend of policy interventions and market influences has at times been messy, but it has helped to start transforming our energy mix – and lay the ground for more streamlined international efforts to promote clean energy.
Mission Innovation, launched by the G20 in the run-up to the Paris climate change conference, is one such initiative. Under its umbrella, 20 participating countries and the European Union have pledged to double spending on sustainable energy research in government labs or universities by 2020.11 These economies already account for over 80% of global public investment in renewables R&D, but the programme hopes this more structured partnership will give a fresh boost to innovation – and affordability – by supporting the search for new technologies and the improvement of existing ones.12
Crucially, the ambition does not stop with the research pipeline. A separate, private sector initiative – the Breakthrough Energy Coalition – launched in tandem with Mission Innovation with the express aim of helping the resulting innovations reach the market.13 To date, 28 investors from 10 countries have committed to invest private capital in early-stage technology development coming out of Mission Innovation countries. The hope is that these investments will catalyse broad business participation in the commercialisation and deployment of clean energy technologies globally.14
Rather than marking something totally new, these initiatives aim to formalise and strengthen the global approach to clean tech. The big hope is that by working together in a more focused, coordinated way, countries – and investors – can accelerate a change already in motion.
1 Randall, T. (2016) “Wind and Solar Are Crushing Fossil Fuels”. Bloomberg, 6 April. http://www.bloomberg.com/news/articles/2016-04-06/wind-and-solar-are-crushing-fossil-fuels.
2 Randall, T. (2015) “Fossil Fuels Just Lost the Race Against Renewables”. Bloomberg, 14 April. http://www.bloomberg.com/news/articles/2015-04-14/fossil-fuels-just-lost-the-race-against-renewables.
3 Randall, T. (2016) “Wind and Solar Are Crushing Fossil Fuels”. Bloomberg, 6 April. http://www.bloomberg.com/news/articles/2016-04-06/wind-and-solar-are-crushing-fossil-fuels.
4 Giannakopoulou, E., Henbest, S. (2016) “New Energy Outlook 2016”. Bloomberg New Energy Finance, 13 June. https://www.bnef.com/dataview/new-energy-outlook-2016/index.html.
6 Randall, T. (2016) “Wind and Solar Are Crushing Fossil Fuels”. Bloomberg, 6 April. http://www.bloomberg.com/news/articles/2016-04-06/wind-and-solar-are-crushing-fossil-fuels.
7 Liebreich, M. (2015) “Lithium-Ion EV Battery Experience Curve Compared with Solar PV Experience Curve”. Bloomberg, 14 April.
9 Giannakopoulou, E., Henbest, S. (2016) “New Energy Outlook 2016”. Bloomberg New Energy Finance, 13 June. https://www.bnef.com/dataview/new-energy-outlook-2016/index.html.
10 From interview with the Rocky Mountain Institute.
11 Mission Innovation. http://mission-innovation.net/...
12 IEA. (2016) “Mission Innovation, a global partnership that seeks to accelerate clean energy innovation”. IEA News, 8 July. https://www.iea.org/newsroomandevents/news/2016/july/mission-innovation-a-global-partnership-that-seeks-to-accelerate-clean-energy-innovation.html.
13 Breakthrough Energy Coalition. http://www.breakthroughenergycoalition.com/en/index.html.
14 Mission Innovation. http://mission-innovation.net/...