The International Energy Agency (IEA) released its second edition of the Medium-Term Renewable Energy Market Report 2013, which provides an analysis of major trends for 21 identified leading markets. Maria van der Hoeven, Executive Director of the EIA, stated when presenting the report findings that
“the rapid growth of renewables continues to beat expectations and is a bright spot in an otherwise bleak assessment of global progress towards a cleaner and more diversified energy mix.”
Despite a difficult global economic climate and policy uncertainty, renewable energy markets at large maintain a positive outlook for the future. Major strides have been made in power generation, with the share of global electricity supply powered by renewables expected to reach 25% by 2018. Markets have also shown great resilience in a low investment climate with an 8% rise in power generation from renewables in 2012 alone. The EIA reports that this continued overall growth is attributed to increased energy demand from non-OECD states, and price competition of solar and wind in markets such as Brazil, Turkey, and New Zealand.
The major persisting challenges facing the renewable energy industry have been largely policy related, with slow growth in the US and Europe, legislators have been concerned with the cost of incentivizing renewable energy markets. Other difficulties have also included price competition from conventional fossil fuels, lagging social acceptance and education on the benefits of renewals energy use, and finally competition with a heavily government subsidized fossil fuel industry.
Future investments are expected to grow in countries that will offer policies which create confidence among investors, and recognize that finance will be critical in the growth of these industries requiring large amounts of capital. For the first time since 2006, global investments in 2012 failed to top its previous year mainly due to lower prices for solar and weakened markets among OECD states. Nonetheless, energy investors continue to show strong support for these technologies with continuing large investments originating from China, Sweden, Denmark, the Philippines, and Brazil.