Globally, despite a 12-percent decline in investment, more renewable energy went on stream in 2012 than in any previous year, the main reason being a 30-to-40 percent drop in the cost of solar energy.
“Around the world, there is a shift to clean energy,” said Michael Liebreich, chief executive of Bloomberg New Energy Finance.
Investors understand that clean energy no longer costs more than fossil energy. As such, there is a lot of excitement about the potential of large-scale projects in a wide range of countries.
Nevertheless, investments in clean energy in 2013 would have been higher had governments in Europe and North America not abruptly pulled back from green energy policies.
“No industry has been treated as badly as the clean energy sector, particularly in Europe,” Liebreich said in an interview.
“Frequent and sometimes wholesale changes in renewable energy policies create market uncertainty, so investors hold back, waiting for clarity and stability.”
Such changes are being driven by polarized politics and a fact-free debate about future energy choices, particularly in the United Kingdom, United States, Australia and Canada. These countries are going to be five years behind the shift to low-cost, clean energy.
Liebreich highlighted Canada’s obsession with its tar sands as good example of a government’s failure to comprehend that future economic success will be based on clean energy sources.
“They are not serving the public interest,” he said.
New Energy Records
In 2012, China, the United States, Germany, Japan and Italy were the top five investors in renewables. Globally, solar photovoltaic installations reached a record 30.5 gigawatts (GW), while installed wind installations topped off at 48.4 GW--both new records, according the REN21 Renewables 2013 Global Status Report.
In the wake of the Fukushima nuclear accident, Japan is shifting from a nuclear-dependent energy policy and investing significantly in solar, geothermal and wind power.
In the Indian state of Gujarat, a 605 MW photovoltaic solar park, completed in April 2012, is expected to save about 8 million tons of carbon dioxide per year. An amount of nearly $1 billion was announced to go towards a 396MW wind project in Oaxaca State, Mexico.
“More and more countries are set to take the renewable energy stage,” said Achim Steiner, UNEP executive director.
Only last week, the global host of World Environment Day, Mongolia, invited me to tour its first 50-megawatt wind farm.”
Mongolia has ambitious plans to harness wind and sun to power its future and supply clean energy to China and the region, Steiner said in a press conference in Nairobi.
“Like many other nations, it has seen the logic and the rationale of embracing a green development path,” Steiner said.
A Growing Industry
An estimated 5.7 million people worldwide worked directly or indirectly in the renewable energy sector in 2012. The bulk of these jobs were in Brazil, China, India, members of the European Union and the United States, with employment rising in other countries.
Selling, installing and maintaining small solar panels in rural Bangladesh, for example, employs 150,000 people directly and indirectly.
The transition from brown to green energy is gaining momentum as more countries, regions and cities realize that the shift is in their best economic interests, offering energy security, among other benefits.
“Even the currently stalled UN climate talks won’t slow this shift,” said Steiner, “and a strong global climate treaty in 2015 could spur an increase in investment.”
The financial sector has factored in the glacial pace of the UN climate talks.
“Nothing that happens in that forum will reduce investment now,” said Liebreich.
World Bank Cuts Global Growth Forecasts
The World Bank cut its forecasts for this year, citing a deeper than expected recession in Europe and a slowdown in China and India.
Renewing fears about growth, it said the global economy was likely to grow by 2.2 percent this year, a downgrade from its January forecast of 2.4 percent, Guardian reported.
The downbeat forecasts helped to drive a wave of selling in Japan, where the Nikkei index tumbled 6.35 percent amid fears that central bank stimulus measures--led by the US--might be withdrawn.
The World Bank also cut its forecast for growth in 2014 to 3.1 percent from 3 percent, but maintained its prediction that global GDP would increase by 3.3 percent in 2015.
While there are markers of hope in the financial sector, the slowdown in the real economy is turning out to be unusually protracted, said Kaushik Basu, senior vice-president and chief economist at the bank.
This is reflected in the stubbornly high unemployment in industrialized nations, with unemployment in the eurozone actually rising, and in the slowing growth in emerging economies.”
There were also heavy losses on European stock markets in morning trading. although the FTSE 100 recovered by mid-afternoon.
Michael Hewson, senior market analyst at CMC Markets UK, a financial spread-betting company said, European markets have plunged on the open in the wake of the 6.35 percent decline in the Nikkei overnight as investors continue to worry about the longevity of central bank stimulus measures, while another global growth downgrade from a global organization, this time the World Bank, has prompted investors to question current stock market valuations.
The bank is now predicting the eurozone economy will shrink by 0.6 percent this year, compared with an earlier forecast of a 0.1 percent decline in GDP. The currency bloc’s economy is then expected to grow by 0.9 percent in 2014 and 1.5 percent in 2015.
The World Bank highlighted slowing growth in China, as authorities there seek to rebalance the economy, and said India’s annual growth had dropped below 6 percent for the first time in 10 years. It said there was concern that the US might begin to ease its support of the world’s largest economy by withdrawing quantitative easing, or the use of central bank cash to buy up sovereign debt in the hope that financial institutions will reinvest the windfall in the wider economy.
The bank added that austerity programs, high unemployment, and weak consumer and business confidence would continue to impede growth in higher-income countries.
It downgraded its forecasts for developing countries’ GDP to 5.1 percent this year from an earlier forecast of 5.5 percent. Growth in 2014 and 2015 is expected to be 5.6 percent and 5.7 percent respectively.
Spanish Housing Prices Decline
The housing prices in Spain fell by 14.3 percent in the first quarter of 2013 in comparison with the same period of 2012, the Spanish National Institute of Statistics (INE) reported on Thursday.
In annual terms, this is the third biggest drop of housing prices since 2007, after falls of 14.4 percent and 15.2 percent in the second and third quarter of 2012 respectively, Xinhua reported.
Second-hand houses have been the most affected by the fall in prices, experiencing a 15.3-percent fall since the first quarter of 2012, while prices of new houses saw a 12.8-percent decrease, said the INE.
Meanwhile, on a quarterly basis housing prices experienced the biggest drop since 2007 as they decreased by 6.6 percent from the last quarter of 2012 to the first one of 2013.
Prices of secondhand houses decreased by 6.8 percent in comparison with the last quarter of 2012, while those of new houses suffered a 6.5-percent decrease. Both declines meant the biggest drops since 2007 on a quarterly basis.
Housing prices have been declining for the past 20 quarters in Spain, since the second quarter of 2008 when the housing bubble popped after prices hit a record high.
The contraction of the domestic demand in Spain, mainly caused by lower wages and rising unemployment, is also affecting housing prices as sellers need to lower the prices in order to be more competitive in the market.
Greek Unemployment Climbs Again
Greece’s jobless rate continues its steady increase.
Overall unemployment climbed to 27.4 percent of the workforce in the first three months of this year, according to the Greek Statistics Agency.
That was up from 26 percent at the end of last year and 22.6 percent a year ago, EuroNews wrote.
One job-seeker in Athens--an artist--painted a depressing picture.
“There is no light at the end of the tunnel. First of all, wages are being reduced and they will be further reduced. Second, everything continues to be expensive, and third, working for nothing or working for €100 will create jobs, but if this is a recovery, then no thanks, I don’t want any part of that.”
The unemployment totals are expected to dip in the current quarter. Tourism accounts for almost one in five jobs in Greece and the prime minister, Antonis Samaras, has said they are looking for an all-time record number of visitors this year--at least 17 million.
Many of them will come because Greece is now cheap to visit. Alexandros Vassilikos, president of the Attica Hotel Association said, “The crisis affected the destination a lot, because of the fall in demand, we had a fall in prices that was over 40 percent over the past four years, but again we have to look at the positive side of this, which is that today we offer much better value for money.”
The only trouble with that is that visitors looking for a bargain tend to spend less.
The jobs created by tourism help bring down the unemployment totals, but only temporarily.
Fresh Demand For Petchem Products
Translated by Katayoon Dashti
New nations have shown their interest for importing Iranian petrochemical products despite Western sanctions, said a senior official of National Petrochemical Company (NPC).
Ali Mohammad Basaqzadeh added that Iran is considered one of the five industrial hubs worldwide in light of its production capacity of 60 million tons of petrochemical and polymer products, Mehr News Agency reported.
Currently, Iran accounts for 24 percent of the capacity of Middle East’s petrochemical production.
Based on the Fifth Five-Year Economic Development Plan (2010-15), Iran’s share should grow to 38 percent.
The presence of over 33 trillion cubic meters of natural gas reserves, proximity to giant consumption markets such as China and India, construction of specialized jetties for exporting petrochemicals, expanding petrochemical hubs and diversity of gas and liquid feedstocks are major advantages for promoting this job-generating industry.
Basaqazadeh said northern neighbors are other customers of Iran’s petrochemical products.
He predicted that Iran would become a big petrochemical power across the region and the world by the end of the Sixth Plan (2020).
The official noted that Iranian petrochemical complexes can meet domestic need by producing various polymer and petrochemical products.
“Asalouyeh (Bushehr province) and Mahshahr (Khuzestan province), as two major hubs of petrochemical production, are active,” he said.
“Petrochemical development projects are under completion across many provinces.”
Once they become operational, the production cycle of many petrochemical products will be completed domestically.
The petrochemical industry has become an important aspect of Iran’s non-oil economy and the basis of its economic diversification.
Investing in Iran’s petrochemical industry has competitive advantages of indisputable and exceptional commercial attractions.
Iran’s gas reserves, which provide huge resources for industrial activities and the petrochemical feedstock, are added advantages.
The industry also provides other benefits, including a vast local market, diversified petrochemical chains, availability of skilled and cost-competitive workforce and infrastructural developments, especially those that link Iran to its neighboring countries.
The positive impact of these factors will eventually bring to the forefront the comparative and competitive advantages that the industry has for attracting local and foreign investments.
Iran Crude Exports Up 66%
Iran’s crude oil exports in May rose by 66 percent compared with the corresponding figure of last month.
Following the recent renewal of waivers on Iranian oil sanctions for China and several other countries, the Far Eastern state boosted its purchases from the Islamic Republic, the International Energy Agency (IEA) reported.
In its monthly oil report released on Wednesday, the Paris-based agency said Iranian crude imports rose to the “relatively high” level of 1.39 million barrels a day in May from 835,000 barrels a day in April, ISNA wrote.
According to the report, China imported 715,000 barrels per day of Iranian crude in May, showing a noticeable rise from 370,000 barrels in April.
The IEA said Iran’s crude output reached 2.68 million barrels a day in May.
Iranian Oil Minister Rostam Qasemi earlier said the illegal US-engineered sanctions helped wean the economy off oil-based revenues.
China Yuan Rises
The Chinese currency Renminbi, or the yuan, advanced 5 basis points to 6.1607 against the US dollar on Friday, according to the China Foreign Exchange Trading System.