Downturn dents renewable energy growth in '08-UNEP

*Renewable energy funding slows to 5 pct in '08, worth $155b

*Developing country investment offsets fall in rich nations

*Solar, geothermal surged while wind, biofuels lagged

LONDON, June 3 - Investment in renewable energy grew by just 5 percent to $155 billion last year, with poorer nations leading the way as the global economic downturn trimmed cleantech funding in rich nations, a UN agency said on Wednesday

The renewable energy sector, spawned by the threat of climate change, was hit by a drought in project financing a year after the industry grew by 60 percent in what the United Nations Environment Programme (UNEP) called a "green gold rush".

"Without a doubt the economic crisis has taken its toll on investments in clean energy when set against the record-breaking growth of recent years," said UNEP head Achim Steiner in a statement to launch the agency's Global Trends in Sustainable Energy Investment 2009 report. "However, there were also some bright points in 2008 especially in developing economies."

Countries such as China, India and Brazil pumped $36.6 billion into renewable energy, 27 percent above 2007 levels. In contrast, investment by developed nations fell by 1.7 percent.

China led new funding in Asia with $15.6 billion, 18 percent above 2007 figures, while also becoming the world's largest solar manufacturer by exporting 95 percent of production.

India made large leaps in building its own renewables industry, growing its solar sector to $347 million, up from $18 million in 2007, and its small hydroelectric market nearly fourfold to $543 million.

Brazil remained the world's largest renewables market, providing some 46 percent of its energy needs, the report said.

Capital in the sector raised through stock markets fell 51 percent to $11.4 billion as clean energy share prices lost 61 percent of their value in 2008, the report said.

UNEP said it was confident that government economic stimulus packages, many of which contain clauses aimed to boost renewable energy, would reignite growth in the stalled market.

"The 'green new deals' lined up by some economies ... contain some serious clean energy provisions that will help support the market," Steiner said, adding that the biggest stimulus package could come from United Nations climate talks in December if delegates reach consensus on a new global agreement to succeed the Kyoto Protocol.

HARNESSING THE ELEMENTS

Wind power attracted the most investment last year at $51.8 billion, or 1 percent more than 2007, while solar power investment rose by 49 percent to $33.5 billion, the report said.

Solar energy funding has now grown by 70 percent since 2006.

Geothermal energy, or power generated from heat stored in the earth, soared by 149 percent and new installed capacity rose by 1.3 gigawatts, or enough to power over one million homes.

Investment in biofuels bucked the wider uptrend, falling by 9 percent to $16.9 billion last year as crude oil prices plummeted from almost $150 a barrel in July down to just above $30 in December, making plant-based fuels less competitive.

Last month, The Renewable Energy Policy Network for the 21st Century (REN21) published a report showing that new global power capacity from renewable sources excluding large hydroelectric dams reached 280 gigawatts in 2008, a 16 percent rise from 2007. A Reuters survey published on Wednesday showed that "green collar workers" averaged $76,000 in annual salary and two thirds felt as safe, if not more so, in their jobs than a year ago. [ID:nL2646603]