Will Green Energy Investment Continue?
Investing in green energy is vital for a healthy environment, but it’s also important for a healthy economy. At least, one can gather as much from the spending on energy efficiency and renewable energy going on around the world.
Consider the latest announcements from the U.S. Department of Energy. As part of the American Recovery and Reinvestment Act, the U.S. government will devote $256 million to improve energy efficiency in energy-intensive industries including district heat and power, information and communication technology, and advanced materials.
District heat refers to steam or hot water produced in a central plant and piped into a building for use as energy, space heating, or manufacturing. By spending $156 million to develop systems combining heat and power generation in district energy systems, DOE hopes to achieve efficiencies of 80 percent or more compared to roughly 45 percent for conventional heat and power production. It also expects to save 17 gigawatts of energy across the country each year through related waste energy recovery systems.
Information Technology professionals have already made great strides in reducing energy use through lower power processors, more efficient cooling systems, blade servers, and virtualization. (See our article, The Greening of Information Technology.) By spending $50 million funding further research and development, the Department of Energy hopes to continue this trend and develop even more efficient information and communication technology systems.
Another $50 million will go toward the research, development, and demonstration of advanced industrial materials. This will include nanomaterials and nanomanufacturing — engineering structures smaller than 100 nanometers in size.
How will all of this help the economy?
DOE Secretary Steven Chu explains, “Supporting the development of the latest industrial technologies plays an important role in helping U.S. industry to lead the world in energy efficiency and productivity. Working together with American manufacturing and IT industries, we will be able to create new jobs, reduce industrial energy use and limit damaging greenhouse gas emissions.”
The renewable energy and energy efficiency spending trend is not unique to the United States.
A recent United Nations Environment Programme (UNEP) report indicated that over half of the $250 billion invested in new power generating capacity worldwide in 2008 was spent on renewable energy sources including wind, solar, geothermal, and biofuel.
In fact, while such investment fell in the United States by 2 percent and slowed in Europe, according to the report, it increased in many developing countries. China is now the world’s second largest wind market in terms of new capacity, and the world’s largest photovoltaic manufacturer.
Australia, Japan, and Kenya are investing heavily in geothermal energy.
Brazil, Chile, Peru, and the Philippines are all drafting laws and policies that will encourage clean energy and promote a green economy.
Around the world, wind energy and solar power received the most new investment dollars.
However, at the same time, global biofuel investment dropped by 9 percent. Likewise, while 2008’s overall investment in clean energy was quadruple that spent in 2004, investment during the second-half of 2008 was down 17 percent compared to the first half of the year, and 2009 is expected to continue that trend.
UNEP Executive Director Achim Steiner commented, “Without doubt the economic crisis has taken its toll on investments in clean energy when set against the record-breaking growth of recent years.”
So, while nations around the world recognize the environmental and economic importance of investing in clean and renewable energy, it remains to be seen whether the return on those investments — beyond mere dollars and euros — will be enough to convince them to continue in the face of the global economic crisis.