From the UK to Vietnam: Five things you probably didn’t know about global renewables investment

Global investment into renewable energy for the first six months of 2018 is down 1% compared to the previous year, according to a Bloomberg New Energy Finance (BNEF) report. Here, edie dives into the data to bring you five of the most important trends shaping the world market.

The BNEF research found that overall global investment had plateaued, but that trends in wind and solar widely differed

The BNEF research found that overall global investment had plateaued, but that trends in wind and solar widely differed

According to the latest Clean Energy Investment Trends report from BNEF, worldwide investment in clean energy during the first six months of 2018 totalled $138.2bn – a decrease of 1% on 2017 figures despite the rapidly falling costs of solar and wind technology.

Published on Monday (9 July), the report notes that $61.5bn was invested in Q1, with investment rising to $76.7bn for Q2 – a year-on-year increase of 8%.

However, investment trends varied widely by sector, with solar investment across the six-month period down 19% on 2017 figures, while wind investment rose by a third across the same timeframe.

While the headline figures make for interesting reading, the report is filled with surprising statistics and trends that show how the world of renewables is evolving, including a warning for the UK. Here, edie brings you five of the key statistics that have shaped investment into renewables since the start of 2018.

1) China’s solar strategy starts to lag

While China is often viewed as a juggernaut on renewable investment, largely thanks to its unparalleled solar market, the BNEF report reveals that China invested $35.1bn in solar in the first half of this year, down 29% on the same period in 2017.

BNEF claims the trajectory to lower investment from China reflects a cooling-off in the nation’s solar aspirations, compounded by significantly lower capital costs for projects which resulted in fewer dollars spent per MW of solar capacity installed.

These trends are expected to continue in the second half of the year, after the Chinese Government announced last month that it would restrict new solar installations that require a national subsidy. Before this announcement, BNEF researchers had forecast a 27% drop in solar prices for 2019 but have since revised their calculations to 34%.

Indeed, BNEF predicts that world solar installations could fall for the first time on record by the end of the year. In 2017, they totalled 98GW of capacity - more than for any other renewable or non-renewable technology.

Nonetheless, China remained the nation to have invested the most money into renewables over the six months, having poured $58.1bn into clean-energy projects between January and June 2018.

2) UK falls short on investment

After MPs warned of a "dramatic and worrying collapse" of green-energy investment between 2015-2017 earlier this year, the BNEF figures show that UK investment in renewables continued to slump during the first half of 2018, and were down 51% year-on-year.

The nation invested $664m in the sector between January and June, with the Environmental Audit Committee attributing this fall in spending to changes in green policy. Since 2015, ministers have scrapped a Zero Carbon Homes policy, reduced Feed-in-Tariffs (FiTs) for small-scale renewables generation and closed the Renewables Obligation (RO) to onshore wind a year early.

The fall in investment shows that the UK is failing to keep pace with its European counterparts, as the continent as a whole saw an 8% year-on-year increase in investment to $16bn, according to BNEF.

Indeed, the only other European nation to record a steeper fall in investment was Germany, which invested 77% less in renewables during H1 of 2018 than in H1 of 2017.  

3) Wind is booming

During H1 of 2018, BNEF estimates that $57.2bn was invested in onshore and offshore wind projects, representing a 33% year-on-year rise.

The boom in investment came due to the US financing a stream of large projects in Taiwan, while India poured investment into schemes in Norway and the Netherlands.

Headline deals from the US included the $1bn, 478MW Hale County onshore wind project in Texas and the $627m, 120MW Formosa 1 Miaoli offshore project in Taiwan, as the nation invested $17.5bn in total in wind power arrays.

Meanwhile, India spent $1.5bn on the 731.5MW Borssele 3 and 4 offshore wind farm in Dutch waters as its total investment in renewables climbed 22% year-on-year to $7.4bn.

4) US investments gather pace

After President Trump announced his intention to withdraw from the Paris Agreement last year, the nation has been seen by many as a laggard on climate challenges.

However, the BNEF report found that US investment during H1 of 2018 rose by almost a third (31%) compared to 2017 levels, with its funding for wind projects up by 121% on its figure in the same period of last year.

BNEF’s head of North American research, Amy Grace, said the increase in wind-power investments comes as developers rush to finish projects in time to qualify for federal tax credits, with the trend expected to continue into next year when the scheme will close.  

5) Vietnam tops the charts

Of the 19 markets included in the report, 10 were found to have increased their renewables investments since last year. The country to have upped its renewable investment the most during H1 of 2018 was Vietnam, which invested 136 times more into green energy projects than it did during January-June of 2017.

Meanwhile, Morocco and Ukraine both made twelve-fold increases and invested $2.5bn and $1.4bn in renewables during the six-month period, respectively.

The move from Morocco comes after it invested no money whatsoever in renewables between 2005 and 2010, making its first investment in 2011.

Meanwhile, Spanish investments rose 652% year-on-year to $1.5bn, while Norway and the Netherlands both more than doubled their year-on-year funding.

 Sarah George


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Clean energy investment | renewables

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Renewables
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