Global clean energy investment down on 2015 levels at half-year mark

Investment slowdowns in China and Japan, as well as a sustained decrease in the cost of solar, has meant that clean energy investment in the second quarter of 2016 reached $61.5bn, 32% below the $90bn spent in the equivalent period of 2015, according to the latest data from Bloomberg New Energy Finance (BNEF).

BNEF data shows that global investment in the opening six months of 2016 was $116.4bn, a 23% fall on the figure from the first half of 2015. Changes in the solar market, such as the shift from small-scale to utility-scale projects, and the steep fall in price for PV panels and project construction are one of the main reasons for the lower trajectory for global investment.

Despite increased investment in the first half of the year for Europe (4%) at $33.5bn, and Brazil (36%) at $3.7bn, all other regions were down – including China (-34%) at £33.7bn and the US (-5%) at $23.1bn.

“It is now looking almost certain that the global investment total for this year will fail to match 2015’s runaway record,” said BNEF’s advisory board chief Michael Liebreich. “China’s financing of wind and solar projects was even higher last year than previously estimated, and the hangover this year caused by weak electricity demand and policy changes in that country will therefore be all the greater.”

Upward revision  

The biggest category of investment in the first half of 2016 was asset finance of renewable energy projects, at $92bn worldwide, down 19% on the first six months of 2015.

The biggest asset finance deals of the second quarter were in offshore wind in Europe, led by the $3.9bn final investment decision on the 588MW Beatrice project in UK. Small-scale solar projects attracted $19.5bn in the first half of 2016, down 32% on the same period of last year.

While the figures for 2016 are lower than expected, BNEF also reveal that global investment was even stronger last year than first thought.

Revised figures show that new investment in 2015 was $348.5bn, nearly $20bn above the previous estimate of $328.9bn published in January. The updated numbers reflect information on investment transactions not disclosed at the time.

Record growth

Early indications that investment figures will not match 2015’s ground-breaking year are unsurprising given that last year saw records smashed for both global renewables generation and investment.

Recent figures from the International Renewable Energy Agency (IRENA) revealed that renewables grew at record pace in 2015, with both wind power and solar PV experiencing another year of record growth.

A major UN-backed report found that renewable energy sources added more generation capacity than all other technologies combined in 2015.

Domestically, record-breaking renewable energy generation and plummeting coal production in 2015 led to a fall of 4% in the UK’s annual carbon dioxide emissions. The UK was “by far the strongest clean energy investment market in Europe” in 2015, according to BNEF, with investment up 24% to $23.4bn.

George Ogleby

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