$200bn in green investments for 2010

Global Green Investments

The UN summit on climate change kicks off in Copenhagen today, but there haven't been too many people coming forward to express their optimism over a comprehensive global deal on global warming being reached.

However, it is expected that renewable energy investments will rise to $200 billion globally in 2010 for projects that do not rely a any new climate change treaty.

As reported by Bloomberg, private and public spending on technology such as solar panels and wind turbines will rise about 50 percent from $130 billion this year and top the previous high of $155 billion in 2008, according to Michael Liebreich, chairman of London-based New Energy Finance, a consulting firm whose data is used by the United Nations and Deutsche Bank AG.

As world leaders meet in Denmark to discuss the goal of limiting carbon-dioxide emissions and develop global clean energy production, companies across the world are increasing spending in spite of the UN conference.

A significant rise in government spending

Michael Morris, chief executive officer of American Electric, the biggest US producer of electricity from coal, said in an interview: "Most of us are moving in that direction and it really isn't dependent on Copenhagen."

It is fully expected that next year will also see a significant rise in government spending on green projects, climbing to $60 billion in 2010. This is in addition to the estimated $177 billion that governments including the US and China have invested via stimulus funds over several years.

"It's been a convergence of a number of drivers that are creating what we consider to be the renaissance time in the clean-tech sector," said Ira Ehrenpreis, general partner with Technology Partners, a Palo Alto, California-based clean energy investment fund with about $700 million under management.

"A clean-tech company has the world as its customer base," she added.

Companies can see the economic benefits of investing in green technology are unprepared to sit around and wait for the UN to reach a deal. For example, CLP, Hong Kong's biggest electricity supplier, is aiming to reduce carbon-dioxide emissions by about 75 percent by 2050. The company is building a $903 million offshore wind farm.

Rate of renewable energy investment is imbalanced

Elsewhere, in Columbus, Ohio-based American Electric said this year it will buy 2000MW of wind power by the end of 2011, double its original goal, to meet state renewable-energy requirements and company targets, according to Bruce Braine, a vice president with the utility (one megawatt is enough to power about 800 US homes).

The rate of investment and risks involved in the renewable energy sector is somewhat imbalanced as you travel the world. Investment risks are higher in the US, for example, than in China and France where stronger incentives are offered.

As a result US firms are falling a little behind those in nations such as China, most notably in the PV solar sector, largely because America lacks a binding limit on CO2 emissions - something that would be required under a global climate change treaty.

It is encouraging that companies across the world are planning to continue with renewable energy investments that do not depend on the Copenhagen summit being a successful because, as US President Barack Obama and other leaders said at a conference in Singapore last month, completion of an accord at the meeting is likely to remain out of reach for now.

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