Growth in Renewables has Stalled. Investment is Falling. But Why?

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A Socialist Project e-bulletin ... No. 1836 ... May 29, 2019
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Growth in Renewables has Stalled. Investment is Falling. But Why?

John Treat and Sean Sweeney

The International Energy Agency (IEA) recently announced that the growth of capacity additions to renewable power generation stalled in 2018, after nearly two decades of growth. Calling the new findings an "unexpected flattening of growth trends," the IEA noted that this development raises serious questions about reaching climate targets. Net new capacity from solar photovoltaic (PV), wind, hydro, bioenergy, and other renewable power sources increased by about 180 Gigawatts (GW) in 2018, the same as the previous year. That’s roughly twice the annual installation of a decade ago. But, according to the IEA, it’s "only around 60% of the net additions needed each year to meet long-term climate goals."
Why is this happening? We are constantly reminded that the costs of renewable capacity have fallen spectacularly in recent years. According to the latest estimates of annual "levelized cost of energy" (LCOE) from Lazard -- the world’s largest investment company -- the average cost of solar PV has dropped 88% since 2009, while that for wind has fallen 69%. This pattern of falling costs is often invoked to allay any concerns about lagging investment in renewable capacity, since every million dollars invested can buy significantly more installed capacity than just a few years ago.

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