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Incentivizing investment in underfunded areas, including clean and affordable energy

Global clean energy investment in 2017 was $333.5 billion according to Bloomberg New Energy Finance, increased 3 per cent from 2016 and achieved the second highest annual figure ever. Investments in renewables in developing countries outweighed those in developed economies for the first time in 2015, but developed countries retook the lead in 2016 according to REN21, a global renewable energy policy multi-stakeholder network that connects a wide range of key actors including governments, nongovernmental organisations, research and academic institutions, international organisations and industry.

Developing countries invested a total of $117 billion in renewable energy in 2016, decreased 25 per cent compared with the previous year. Developed countries also reduced investment in renewable energy in 2016 to $125 billion, down 4 per cent. China was by far the largest investing country for renewables, with $78.3 billion in 2016, down 32 per cent from 2015, representing nearly a third of the global total. The United States was a distant second with $46.4 billion. Renewable energy technologies today are more cost-competitive than ever before, as technology and installation costs of a range of renewable energy technologies have continued to fall in 2015 and 2016.

Role of renewable energy in global energy supply

The role of renewable energy in global energy supply continues to increase in both developing and developed countries. The share of renewable energy (derived from hydropower, solid and liquid biofuels, wind, the sun, biogas, geothermal and marine sources and waste) in the world’s total final energy consumption has only increased slowly, however, from 17.4 per cent in 2000 to 19.3 per cent in 2015 according to the latest figures from REN21. As shown in the figure, the strongest growth rate has been in solar and wind power.

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As regards energy efficiency, the International Energy Agency notes that in 2016, investors directed $231 billion into incremental energy efficiency improvements - up 9 per cent from 2015. Efficiency investments comprised 13.6 per cent of the $1.7 trillion spent globally on energy supply in 2016. The global energy service company (ESCO) market expanded by 12 per cent to $26.8 billion in 2016. China has by far the largest market, making up over 60 per cent of global revenue, thanks to strong government incentives. The United States (20 per cent) and Europe (10 per cent) are the other two major ESCO markets.

The benefits of improving energy

The benefits of improving energy efficiency extend well beyond financial savings, relating also to improved energy security, higher productivity for businesses and reduced greenhouse gas emissions. Energy intensity is a measure of the energy efficiency of a nation's economy. Energy intensity, calculated by dividing total primary energy supply by GDP, improved by 1.8 per cent in 2016 according to the latest numbers by the International Energy Agency. This represents a considerable improvement over the period from 1990 to 2010. Still, progress is proceeding at only two-thirds of the pace needed to double the global rate of improvement in energy efficiency by 2030 (see Report of the Secretary-General, “Progress towards the Sustainable Development Goals”, E/2016/75).

Access to affordable, reliable, modern and sustainable energy services 

The proportion of the global population with access to electricity has increased steadily. According to the 2017 estimates by the International Energy Agency, there are some positive signs: over 100 million people per year have gained access to electricity since 2012 compared with around 60 million per year from 2000 to 2012. Progress in India and Indonesia has been particularly impressive, and in Sub-Saharan Africa electrification efforts outpaced population growth for the first time in 2014. But, despite this momentum, in the New Policies Scenario around 675 million people – 90 per cent of them in Sub-Saharan Africa – remain without access to electricity in 2030 (down from 1.1 billion today), and 2.3 billion continue to rely on biomass, coal or kerosene for cooking (from 2.8 billion today). Household air pollution from these sources is currently linked to 2.8 million premature deaths per year, and several billion hours are spent collecting firewood for cooking, mostly by women, that could be put to more productive uses. See 2017 World Energy Outlook for more information.

More information: Renewable Energy Status Report 2017 (UN-ECE and REN21)