Published on July 11th, 2017 | by Joshua S Hill0
Mediocre Second Quarter Clean Energy Investment Boosted By UAE Solar Parks
July 11th, 2017 by Joshua S Hill
Clean energy investment in the second quarter of 2017 reached $64.8 billion, boosted by two massive solar parks in the United Arab Emirates according to Bloomberg New Energy Finance, an encouraging 21% increase on the first quarter of this year, but still down 12% compared to a year ago.
It has been a rough 18 months in terms of clean energy investment. Throughout 2016 each quarter seemed to be worse than the one before — the first quarter was down 12% from a year earlier, the second quarter down 32%, and the third quarter down 43%. Unsurprisingly, therefore, clean energy investment in 2016 was down on the record investment in 2015, down 18% to only $287 billion for the year. The slump continued, also, into the first quarter of this year, with clean energy investment in Q1’17 down 17% year-over-year, down to only $53.6 billion.
However, the second quarter seems to have bumped the slump somewhat, according to the latest figures from Bloomberg New Energy Finance (BNEF). Total investment reached $64.8 billion in the second quarter, the highest quarter since the same time a year ago, but unfortunately still down 12% on that same quarter.
BNEF specifically highlighted financing for two massive solar projects in the United Arab Emirates — the 800 MW Sheikh Mohammed Bin Rashid Al-Maktoum III plant in Dubai and the 1.2 GW Marubeni JinkoSolar and Adwea Sweihan project in Abu Dhabi, which together required $1.9 billion in investments.
“The U.A.E. deals are the largest in that country to date by far, and show that its auction programs are leading to the commitment of hard cash by banks and equity providers,” said Victoria Cuming, head of policy for Europe, Middle East and Africa at BNEF. “They also signal that oil-producing countries are warming to renewables as part of moves to diversify their economies.”
Again, China took first place in terms of clean energy investment, with $23.3 billion, down 16% compared to 2Q’16, but up 32% from 1Q’17. The United States saw $14.7 billion in investment, up 6% and 51% respectively. Europe took in $8.8 billion, down 49% and up 10% — including Germany, which took in $3.2 billion, down 34% year-over-year and down 7% quarter-over-quarter. Japan took in $2.9 billion, India $2.6 billion, and Brazil $1.9 billion.
“The $64.8 billion investment total in 2Q was quite firm given that backdrop of falling costs,” added Abraham Louw, analyst, clean energy economics at BNEF. “There was also a good spread of big projects financed in different countries, and less reliance on European offshore wind than in some recent quarters.”
The solar sector boasted the largest total investment, racking up $35.6 billion, up 19% year-over-year and 20% quarter-over-quarter. Wind saw a slower quarter, with investments of only $26.2 billion — down 29% year-over-year, but up 43% higher quarter-over-quarter (which says more about the first quarter than it does the second). Continuing a trend of such, the dollar commitments to wind and solar were less per MW in the second quarter than in previous years thanks to significant reductions in costs due to technological improvements and experience. Bloomberg predicts that global capital costs for solar PV and onshore wind have actually fallen by 15% and 14% respectively over the last 12 months alone.