Global renewable energy capacity jumped eight percent last year despite a 23 percent drop in investment. Falling renewable energy prices are driving a build-up of capacity.
The world added a record amount of renewable energy in 2016 despite a sharp drop in investment, the UN said Thursday, largely due to falling costs of clean energy.
New renewable energy, excluding large hydro projects, added 138.5 gigawatts of power in 2016, up eight percent from the previous year. The new capacity came despite investment falling to $241.6 billion (227 billion euro), 23 percent lower than the previous year and the lowest since 2013.
"Ever-cheaper clean tech provides a real opportunity for investors to get more for less," said Erik Solheim, Executive Director of UN Environment. "This is exactly the kind of situation, where the needs of profit and people meet, that will drive the shift to a better world for all."
Led by wind and solar power, the new capacity is about equal to the world's 16 largest power producing facilities combined.
The UN report, Global Trends in Renewable Energy Investment 2017, said that new renewable capacity was equal to about slightly more than half of all new power brought online, a record. Excluding large hydro, renewables now account for 11.3 percent of global electricity in 2016 compared to 10.3 percent the year before.
The falling cost of solar photovoltaics and wind is prompting investors to switch from dirty power to green energy, the report said. Last year, the cost of each megawatt produced from renewables dropped by 10 percent.
Wind and solar made up most new capacity last year, with $112.5 billion and $113.7 billion invested, respectively.
Not all the drop in investment was due to reduced costs, with China, Japan and some emerging markets cutting renewable investments. China's investment in renewables dropped 32 percent to $78.3 billion, the first time in a decade it bucked a rising trend. Japan's investment tumbled 56 percent.
Mexico, Chile, Uruguay, South Africa and Morocco all had a slump in investment by more than 60 percent, driven by slowing electricity demand and financing issues. The US also saw investment dip 10 percent to $46.4 billion due to developers taking time to benefit from a five-year tax credit.
Europe, meanwhile, invested three percent more than the previous year to reach $59.8 billion, led by the UK and Germany expanding output. The EU aims to increase renewables to 27 percent of energy consumption by 2030.
The report came as consortium of 3,500 electricity generating companies from 26 of the EU's 28 states joined an initiative not to build any new coal-fired power plants after 2020.
"With power supply becoming increasingly clean, electric technologies are an obvious choice for replacing fossil fuel-based systems ... to reduce greenhouse gases," said EURELECTRIC president and CEO of the Portuguese energy group EDP, Antonio Mexia.
According to the International Energy Agency, the switch to renewables is one of the main reasons greenhouse gas emissions have stayed the same for the third year in a row despite global economic growth of 3.1 percent.