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Global clean energy investment rebounds after two-year decline

Date
02 October 2014
Global clean energy investment rebounds after two-year decline

LONDON: Global investments in clean energy are recovering after two years of decline, according to fresh data released today by Bloomberg New Energy Finance (BNEF).

BNEF's new figures reveal the level of renewable energy and 'energy smart' technology investment in the first three quarters of this year are up 16% compared to 2013, with US$175.1 billion traded from January to September.

The trend makes “almost certain” this year will surpass the US$250.7 billion invested in 2013, says BNEF.

Looking further into the data, the three quarters of 2014 collected US$54.9 billion, US$65.2 billion and US$55 billion respectively. The last figure is interesting because it marks a significant rise of 12% compared to the US$48.9 billion achieved in the same period last year.

CHINA LEADING

The third quarter growth has been driven by record solar investments in China, with US$12.2 billion (out of a total US$19.9 billion) invested - up 62.7% from the US$7.5 billion in the same period of 2013. Overall, Chinese clean investments were up by 31.8% compared to the third quarter of last year.

BNEF forecasts at the end of the year China will have between 13 and 14 gigawatts of solar installations, accounting for about one third of the world’s total.

Changhua Wu, Greater China Director, The Climate Group, said: "China claims the crown as the world’s largest investor in clean energy. This data nods to the fact China is finally using much less coal and far more clean energy for its huge production of electricity.

"But the benefits of this low carbon economy are not just being reaped by China. The country's climate leadership is actually beginning to positively influence the rest of the world too. After all, as the second largest economy, if China fails to embrace and lead the low carbon economy, the world fails."

Japan is also following the solar boom with a total clean investments in the third quarter reaching US$8.6 billion - up 17% from the corresponding figure in 2013.

Geo Q3 2014 clean investments

Image The Climate Group, using BNEF data

On the contrary, in the third quarter of this year, Europe scored just US$8.8 billion - the lowest figure for over eight years and a decrease of 27% compared to 2013, when it achieved US$12.1 billion. Specifically, UK and Italy fell 74.5% and 73.8% respectively (mainly because of uncertain policies), with Germany losing 6.6%. However, France saw a rise of 47.2%.

Across the ocean, US followed the global signs of recovery gathering US$7.3 billion in its third quarter this year, a rise of 28%, and India scored US$2 billion, which is up 53.9%.

This positive trend comes after two years of negative figures, with 2012 and 2013 dropping 11% and 10% respectively (US$284.6bn and US$250.7 billion) after the record US$317.1 billion scored on 2011.

clean investments 2004-2013

Image courtesy BNEF, from “Global trends in clean energy, Q1 2014 - Fact pack

Breaking down the third quarter into specific sectors, clean energy projects - such as wind farms, solar parks and geothermal plants - reached US$33.3 billion (up just 1.5% from 2013), while smaller-scale projects such as rooftop solar achieved US$18.3 billion, up 31.6%.

MARKET SHIFT

Equity capital on the public markets also went up 35% reaching US$2.7 billion, while venture capital and private equity investment was up 55% to US$0.918 billion – after the negative record last year of US$0.592 billion.

The recovery is largely guided by solar competitiveness, but “there is no room for complacency,” says Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance, who first suggested clean energy investment is 'turning around' at an event during Climate Week NYC last week. Commenting on the data released today, he said: “Clean energy investment of between $200 billion and $300 billion a year is not large enough to herald the rapid transformation of the power system that experts say is required if the world is to see a peak in CO2 emissions around 2020. There is still too much policy instability holding back investor confidence.”

Mark Kenber, CEO of The Climate Group, convenor of Climate Week NYC, said: “The clean energy and technology sectors are driving growth and job creation at a far more rapid rate than the rest of the economy. This is where our best hope for recovery and continued prosperity now lies. The major acceleration in investment here shows this is where smart business is heading.”

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By Ilario D'Amato

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