Clean energy investments slowed considerably in 2016 in both OECD and non-OECD markets but the drop-off was most significant in emerging markets, falling by $40.2 billion to only $111.4 billion in 2016, according to Bloomberg New Energy Finance’s new Climatescope 2017 report.
Bloomberg New Energy Finance (BNEF) published advanced highlights from its upcoming Climatescope 2017 report which provides a country-by-country assessment of the progress of emerging markets in their energy transition. The report, intended to be published in full at the end of the month, reveals that while global clean energy investments fell in 2016 across the board, the decline was largely due to a drop-off in clean energy investments in emerging markets, led by China but involving all and sundry.
Specifically, Climatescope reveals that clean energy investment in non-OECD countries only reached $111.4 billion, down $40.2 billion from the $151.6 billion taken in during 2015.
China accounted for three-quarters of this decline, but there was nevertheless significant decline throughout all non-OECD and emerging markets.
New asset (project) financing for clean energy in developing nations, 2010-2016
“The figures highlight the gap between talk and action when it comes to addressing climate and supporting clean energy,” said Ethan Zindler of BNEF. “Wealthier countries have been slower to ramp investment than might have been expected, given the promises made eight years ago at Copenhagen. But poorer nations have in many cases not built the policy frameworks needed to build investor confidence and attract clean energy investment.”
While 2015 was a good year overall, a larger trend has emerged that concerns many analysts. The number of non-OECD countries that have recorded clean energy asset financing of $100 million or more, per year, has stagnated at around 27 (and never more) countries since 2010 — that’s not great news, considering that accounts for one large onshore wind farm, or a few solar PV plants.
China accounted for 63% of all clean energy asset financing, but its investments fell between 2015 and 2016 by $30.6 billion, or 27%.
Investment coming in to non-OECD nations from outside has been a critical component of clean energy investment for emerging markets, with 36% of funds deployed to the 106 emerging markets analyzed in Climatescope 2017 found to be non-domestic. Unsurprisingly, the wealthy nations account for the majority of these non-domestic investment paths, but this too suffered a drop in 2016. After growing from $2.7 billion in 2007 to an impressive $13.5 billion in 2015, OECD-based clean energy investments into emerging markets reached only $10 billion in 2016. Further, funds awarded by international development banks have stalled at around $4 billion since 2014.