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Worldwide Global Clean Energy Investment Stronger

Bloomberg New Energy Finance (BNEF) has reported that clean energy investment rallied 10% in the first quarter of 2014 (Q1’14) compared to the same period a year earlier, reaching a total of $47.7 billion.

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Image Credit: Emiy Mills via Flickr

Earlier this month that the United Nations Environment Programme (UNEP) released the seventh edition of its Global Trends in Renewable Energy Investment based on data provided by BNEF, showing that 2013 renewable energy investment had dropped by $35.1 billion. However, the prime factor behind the drop in 2013 investment wasn’t necessarily lack of interest, but rather placed at the feet of falling solar photovoltaic production costs. Stepping forward to Q1’14, Bloomberg highlighted small-scale solar in Japan and the US as accounting for 42% of the jump in investment, “as households and businesses … took advantage of the big falls that have taken place in the cost of photovoltaic systems over recent years”, complimenting 2013’s investment drop.

Michael Liebreich, chairman of the advisory board for Bloomberg New Energy Finance, commented: “It is too early to say definitively that 2013 was the low point for clean energy investment worldwide and that 2014 will show a rebound, but the first-quarter numbers are encouraging. “Two trends, in particular, are worth picking out,” Liebreich continued, noting that “the increasing share of small-scale solar in overall investment, following a 50%-plus improvement in PV’s levelised cost of electricity per MW over the last four years; and the geographical expansion of investment to more and more emerging economies. In Q1, we saw two of the top four asset finance deals happening in Indonesia and Kenya.”

investment

2013 Investment Drops
Source: Bloomberg New Energy Finance
Image Credit: United Nations Environment Programme

Bloomberg noted in their press release that “the first quarter is often the weakest of the year for investment in clean energy,” primarily because developers have pushed so hard to finance projects in the closing months of the previous year in an effort to take advantage of expiring subsidies.

  • Asia and Oceania (minus China and India) saw investment grow by 26% compared to Q1’13, up to $12.1 billion, thanks in part to the solar boom in Japan
  • European investment dropped 30% compared to Q1’13, dropping to $11.1 
  • Chinese investment grew by 18% to $9.9 billion
  • US investment grew by 95% compared to Q1’13, up to $7.9 billion, only half of Q4’13
  • Investment in Brazil skyrocketed, growing 211% to $1.3 billion in Q1’14,
  • While the rest of the Americas dropped 11% to $2.1 billion
  • The Middle East and Africa grew by 82% to $2.4 billion

As already mentioned, the dominant driver of investment growth in the first quarter of 2014 was small scale scale projects of less than 1 MW, increasing 42% to $21.2.

Specifically, solar investment grew 23% to $27.5 billion, thanks primarily to the drop in photovoltaic production affecting the value of small-scale solar installations — especially for homeowners and small businesses. Giles Parkinson posted the following graph from investment bank Sanford Bernstein which shows that solar PV is now cheaper than oil and Asian liquefied natural gas (LNG).

bernstein-solar

 

“For these (developing Asian economies) solar is just cheap, clean, convenient, reliable energy. And since it is a technology, it will get even cheaper over time,” Bernstein writes in a newly released report.

Looking at solar as a whole shows similar success, especially in China. BNEF released a report in January of this year that showed that China had installed more solar power in 2013 than the US has ever installed.

“The 2013 figures show the astonishing scale of the Chinese market, now the sleeping dragon has awoken” said Jenny Chase, head of solar analysis at Bloomberg New Energy Finance. “PV is becoming ever cheaper and simpler to install, and China’s government has been as surprised as European governments by how quickly it can be deployed in response to incentives.”

China “outstripped even the most optimistic forecasts” to install 12 GW of solar energy in 2013 alone, a figure that could end up growing to 14 GW if a late-year push succeeded. These figures came in despite all and sundry reports suggesting that China’s goals were overoptimistic at best, absurd at worst.

Wind investment did not enjoy the same increase, dropping 16% to $13.9 billion in Q1’14, while energy-smart technologies grew 243% year-on-year to $3.1 billion.

 
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