Clean Energy R&D Hanging Tough In Tough Times

Where should cleantech investment dollars go – toward research and development into new, possibly game-changing renewable energy technologies, or into ramping up the technologies that we have now? Companies and governments face this question all the time, and in 2012 the answer tilted just a bit more toward R&D.

The latest annual “Global Trends in Renewable Energy Investment” report to the U.N. shows total investment in renewable power and fuels was $244 billion in 2012, down 12 percent from 2011’s record-setting $279 billion. (Bloomberg New Energy Finance put the number at $268.7 billion, down 12 percent.) R&D didn’t go crazy, but it did buck the trend, rising 1 percent to $9.6 billion.

renewable energy R&D

University of Georgia scientists conducting research into harvesting power from plants (image via UGA)

This total was evenly split between corporate R&D and government R&D and in one sense the government spending was impressive: Various green stimulus programs that were hatched in the wake of the Great Recession have wound down, yet R&D was up 3 percent. But stepping back a little further historically, the report noted that “R&D spending by OECD governments as a proportion of GDP is scarcely a quarter of its level 30 years ago according to the International Energy Agency.”

So where was the R&D directed in 2012? In these sectors, the report said:

  • Solar continued to dominate, claiming a fraction over half (51%) of all research dollars spent, despite a 1% fall to $4.9 billion. R&D efforts focussed on improving the energy output of PV cells and the efficiency of production processes.
  • Wind R&D was up 4% at $1.7 billion, one major focus being the quest to reduce the cost of offshore development.
  • Biofuels R&D was up 2% at $1.7 billion, much of it going on next-generation technologies like cellulosic ethanol, Fischer-Tropsch biodiesel and algal oil.

Solar R&D investment remained steady despite the dismal state of the manufacturing sector amid vast overcapacity; in explanation, the report said “in such conditions, the need to raise the efficiency of solar technologies and cut production costs yet further became existential.”

On wind, the focus was largely offshore: “One of the industry’s major preoccupations, as offshore wind development gathers pace, is to reduce the cost of offshore turbine foundations and develop new concepts for use in deeper water further offshore where the winds are stronger,” the report said.

With biofuels, the reported noted the that the U.S. – the world’s biggest biofuel market – the continuing battle over the renewable fuel standard that buoys the sector. “The removal of the target would destroy the entire market, and with it any incentive for companies to invest in further R&D,” the report said. “If the target is simply scaled back to more realistic levels, however, it might provide a more stable framework.”

The full report, “Global Trends in Renewable Energy Investment 2013,” is available for download with free registration on the Frankfurt School UNEP COllaborating Centre for Climate & Sustainable Energy Finance.

Sports columnist, newspaper desk guy, website managing editor, wine-industry PR specialist, freelance writer—Pete Danko’s career in media has covered a lot of terrain. The constant along the way has been a fierce dedication to knowing the story and getting it right. Danko's work has appeared in Wired, The New York Times, San Francisco Chronicle and elsewhere.