Global clean energy investment drops 15% in 2015

Clean energy investment has slumped by 15% in the first quarter of 2015 to its lowest level in two years according to Bloomberg New Energy Finance (BNEF).

Global investment only managed a low of $50.5bn, down from $59.3bn in the first quarter of 2014, due to a decline in wind and utility-scale projects, BNEF said.

The big fear that clean energy investment would be affected by falling oil prices has not been the case, and after currency variations and some large offshore wind investments in 2014 are taken out of the equation, investment “this year would have been pretty much level-pegging with last year” BNEF’s chairman of its advisory board Michael Liebreich said.

Clean energy investment reached the highest amount in 2014 since 2011 totalling $310bn. Growth was bolstered by newly competitive large-scale solar PV and a record number of offshore wind projects.

Solar Gold Rush

Financing for utility-scale renewable energy projects fell 19% to $27.9bn, with wind investment falling by almost a third on 2014 to $15.1bn.

However, solar investment has had a strong start to the year with spending rising by 7% to $31.8bn. The UK in particular has experienced an ‘industry gold rush’ as developers moved fast to qualify for Government subsidies for large-scale solar projects that have now been discontinued.

As much new capacity has been installed in the first three months of this year as in the whole of 2014, but installations are expected to fall by 80% following the subsidy deadline which passed at the beginning of this month.

Long-term Certainty

First-quarter spending in Europe dropped 30% to $9.7bn from a year earlier, as EY reported earlier this month that a continuing lack of clarity round the UK’s future energy mix and the political uncertainty caused by the upcoming General Election is damaging its appeal for renewables investment.

Europe’s offshore wind industry in particular has united in a call for policymakers to provide long-term funding certainty, as figures in February revealed the market slowed in 2014, will be even quieter this year and ‘slump’ in 2016.

According to the European Wind Energy Association (EWEA), 5% less new offshore wind capacity was added to the grid in 2014 than in 2013. The UK is expected to drive the expansion of the EU offshore wind market, but developers must collaborate to become price-competitive with other energy sources in the future, EY said.

“There’s sort of a natural effect effect that if you have a strong year, it’s difficult the next year to go much above that,” BNEF’s senior analyst Angus McCrone of the first-quarter results. “It’s too early to say it’s a meaningful fall in investment that’s going to be continued through the year.”

Lucinda Dann

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