When Clean Energy Investment Became The Big News Story Of 2014
Ask me a year ago what my primary focus in life would be today, and even I would not have been able to foresee just how important global renewable energy investment news would become in my day-to-day work life. But my career trajectory has followed quite clearly the rise in renewable energy investment throughout 2014, and I want to take a few moments to look back on a year of global clean energy investment stories.
January
The biggest investment story to come out of January 2014 was the news from Bloomberg New Energy Finance that global clean energy investment was again down on previous years. According to figures released in the middle of January, BNEF concluded that global clean energy investment reached $254 billion in 2013, down on 2012’s $288.9 billion, and down on 2011’s record $317.9 billion.
BNEF noted in their press release that “the reduced volume of investment in 2013 reflected two main influences – a continued sharp reduction in the cost of photovoltaic systems, and the impact on investor confidence of shifts in policy towards renewable power in Europe and the US.”
The conclusions were both good and bad — less money was needed to supply solar PV demand, but political support dropped, subsequently dropping investor confidence.
On a much smaller note, Google continued to shine as a company with a desire to make good investment decisions. In the space of a couple of days, the internet search and advertising giant acquired Nest Labs (creators of the fabulous Nest Learning Thermostat) for $3.2 billion, and made their fifteenth renewable energy investment, a $200 million investment into the Spinning Spur Wind Project in Oldham County, Texas.
February-March
2013 wasn’t all bad, however, as proved by several reports which were released sporadically throughout the opening months of the year.
Bloomberg New Energy Finance highlighted the growth of global smart grid investment, publishing a report in February that showed investment in the sector grew to $14.9 billion in 2013, up from $14.2 billion in 2012. China led the world in smart grid investment, emerging as the world’s largest smart grid market, investing $4.3 billion during 2013.
“Global investment in the smart grid increased relatively modestly last year after five years of rapid growth. But the fundamental drivers of the smart grid – greater grid reliability, further integration of renewable energy, and improved demand-side management – are stronger than ever,” said Colin McKerracher, senior energy-smart technologies analyst at Bloomberg New Energy Finance.
A month later, Desertec released an analysis that predicted the Middle East and North Africa (MENA) region would see their renewable energy assets more than double in capacity by the end of 2015 — solar and wind generation capacity growing to 3.9 GW by the end of 2015, up from 1.5 GW.
And as we will see through the remainder of the year, emerging economies such as those in MENA played an ever more important part in the renewable energy investment conversation.
April
Following on from their own analysis in January, Bloomberg New Energy Finance, in cooperation with the United Nations Environmental Programme, released the seventh edition of its Global Trends in Renewable Energy Investment report.
Figures across the board were somewhat less than BNEF’s original numbers, but the drop in clean energy investment in 2012 and 2013 was clear — dropping $35.1 billion from 2012 to 2013. However, the UNEP report made much more of the falling cost of solar PV systems than any political impacts, noting that 39 GW of solar PV was installed through 2013, “up from 31 GW in 2012, for fewer dollars invested.”
Moving on from looking back at 2013, one of the first of the big investments moves of 2014 came from the European Investment Bank, which announced direction to provide €2 billion to innovative renewable energy demonstration projects and carbon capture schemes across the European Union.
As if to prove the point, Bloomberg New Energy Finance announced a day later that clean energy investment in the first quarter of 2014 had rallied 10% compared to the same period a year earlier, reaching a total of $47.7 billion — a trend which would follow through the next two quarters.
May-June
Skipping over good quarterly earnings reports from SolarCity, First Solar, Gamesa, and Vestas, among others, the other major story over this period was the UK Green Investment Bank’s intention to raise £1 billion for a new fund to “acquire equity stakes in operational offshore wind projects in the UK.”
July
The year’s investment trends were confirmed at the halfway point by two separate reports, one released by Bloomberg New Energy Finance, another by Clean Energy Pipeline, both of which confirmed that global clean energy investment for the quarter had surged past $60 billion (Pipeline put the figure at $66.2 billion, BNEF at $63.6 billion). It was the strongest quarter for investment since Q2’2012, and was only $14.4 billion shy of the quarterly record made in Q2’2011 of $78 billion.
“It is perhaps a little early to make predictions, but based on investment levels during the first six months of 2014 last year’s total looks like it will be eclipsed,” commented Douglas Lloyd, CEO of Clean Energy Pipeline. “This is very positive news given that total clean energy investment posted annual year-on-year declines in both 2012 and 2013.”
“The past two years have seen investment decline by over 20% from its 2011 peak, driven equally by the European fiscal crisis, policy uncertainty and plummeting costs for renewable energy equipment,” said Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance. “Now, what we are seeing is the new competitiveness of renewable energy winning through, driving a surge in demand.”
As if on cue, later in the month, GE announced that it will be investing equity in three Atria Power wind projects currently under construction in India, a move that went a long way towards the company’s desire to invest $1 billion annually in renewable energy.
August-September
Investment news was the hallmark of the latter part of 2014, with a slew of news stories peppering CleanTechnica. August 1 saw Ventinveste and Ferrostaal announce a decision to invest $296 million in four wind farms in Portugal, while later in the month Atlantis raised $83 million to begin construction of the world’s largest tidal stream farm — news which was followed only a few days later by a subsequent announcement that the company had also been awarded the contract to expand the project. Duke Energy committed to invest $500 million into expanding the solar market of North Caroline, before Barclays Bank in the UK pledged to invest a minimum of £1 billion in green bonds over the next year.
August and September was also host to a number of reports predicting further investments in Mexico & Central America; Asia Pacific microgrids; the global smart grid market; and the release of the Ernst & Young Renewable Energy Country Attractiveness Index, led by China and the US.
October
The month started off with Bloomberg New Energy Finance’s figures for global third quarter clean energy investments, and the news continued to be good news. Global investment for the first three quarters of 2014 hit $175.1 billion, leaving Bloomberg to predict that “2014 will produce a bounce-back in dollars invested after two years of decline.”
The third quarter saw $55 billion in investments, up 12% from the same period a year earlier. And while these numbers are still well behind the $317 billion invested for the whole year in 2011, it’s certainly looking like the year might be an uptick on 2012 and 2013.
Later in the month, Clean Energy Pipeline improved on BNEF’s figures, finding that global clean energy investment had reached $64 billion, though still a drop on the previous quarter and on 2011 numbers.
The Climate Bond Initiative published a report a few days later predicting that green bonds could hit the $100 billion mark by the end of 2015, while BNEF released their “landmark” Climatescope 2014 report, confirming developing nations as a significant growth sector for global clean energy. To top it all off, the UK Green Investment Bank celebrated its second birthday and the milestone of mobilising more than £5 billion for new green energy infrastructure projects.
November-December
With the final quarter investment numbers not due out till January of 2015, we won’t know just how big or lacklustre 2014 was, and several less-than-impressive third-quarter earnings reports from some big name solar companies might impact overall numbers, but we can only wait and see.
A few last-minute stories from the year included a new report from the Worldwatch Institute which foresaw Latin America & the Caribbean as a future location for renewable energy growth; two separate Canadian pension funds invested in renewables to the tune of $2 billion; and Norway’s state-owned power company announced that it intends to invest over $8 billion in renewable energy projects both at home and abroad.
Was 2014 a big Investment Year?
We can certainly hope so, but only fourth quarter figures will tell the whole story — so stay tuned to CleanTechnica for those numbers throughout January.
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