Clean energy investment surged in China, Africa, the U.S., Latin America and India in 2015, driving the world total to its highest-ever figure of $328.9 billion, according to a report from Bloomberg New Energy Finance (BNEF). The report says that total is up 4% from 2014's revised $315.9 billion and beats the previous record, set in 2011, by 3%.
Furthermore, the report says 2015 also set a record for the global installation of renewable power capacity.
BNEF says these records were set despite four influences that might have been expected to restrain such growth: further declines in the cost of solar PV, meaning that more capacity could be installed for the same price; the strength of the U.S. currency, reducing the dollar value of non-dollar investment; the continued weakness of the European economy, formerly the powerhouse of renewable energy investment; and perhaps most significantly, the plunge in fossil fuel commodity prices.
"These figures are a stunning riposte to all those who expected clean energy investment to stall on falling oil and gas prices," says Michael Liebreich, chairman of the advisory board at BNEF." They highlight the improving cost-competitiveness of solar and wind power, driven, in part, by the move by many countries to reverse-auction new capacity, rather than providing advantageous tariffs – a shift that has put producers under continuing price pressure.
"Wind and solar power are now being adopted in many developing countries as a natural and substantial part of the generation mix: They can be produced more cheaply than often-high wholesale power prices; they reduce a country's exposure to expected future fossil fuel prices; and above all, they can be built very quickly to meet unfulfilled demand for electricity,’ continues Liebreich. ‘And it is very hard to see these trends going backwards, in the light of December's Paris Climate Agreement."
Looking at the figures in detail, BNEF says the biggest piece of the $328.9 billion invested in clean energy in 2015 was the asset finance of utility-scale projects, such as wind farms, solar parks, biomass and waste-to-energy plants, and small hydroelectric schemes. This totaled $199 billion in 2015 – up 6% from the previous year.
The biggest projects financed last year included a string of large offshore wind arrays in the North Sea and off the coast of China, and the biggest financing in onshore wind was of the 1.6 GW Nafin Mexico portfolio, for an estimated $2.2 billion.
For solar PV, the largest investment was about $744 million for the 294 MW Silver State South project, and for solar thermal or concentrating solar power, it was around $1.8 billion for the 350 MW NOORo portfolio in Morocco.
After asset finance, the next largest piece of clean energy investment was the spending on rooftop and other small-scale solar projects. This totaled $67.4 billion in 2015 – up 12% from the previous year, with Japan by far the biggest market, followed by the U.S. and China.
BNEF says the preliminary indications are that, thanks to this utility-scale and small-scale activity, both wind and solar PV saw around 30% more capacity installed worldwide in 2015 than in 2014. The wind total for last year is likely to end up at around 64 GW, with the total for solar just behind at about 57 GW. This combined total of 121 GW will have made up around half of the net capacity added in all generation technologies (fossil fuel, nuclear and renewable) globally in 2015.
Public market investment in clean energy companies was $14.4 billion last year – down 27% from 2014 but in line with the 10-year average. Top deals included a $750 million secondary share issue by electric car maker Tesla Motors and a $688 million initial public offering by TerraForm Global, a U.S.-based yieldco owning renewable energy projects in emerging markets.
Venture capital and private equity investors pumped $5.6 billion into specialist clean energy firms in 2015 – up 17% compared with the 2014 total but still far below the $12.2 billion peak of 2008.
BNEF says there was $20 billion of asset finance in clean energy technologies such as smart grid and utility-scale battery storage – representing an 11% rise over 2014, the latest in an unbroken series of annual increases over the past nine years.
The final category of clean energy investment, government and corporate research, and development spending totaled $28.3 billion in 2015 – up just 1%. BNEF says this figure provides a benchmark for any surge in spending in the wake of announcements at COP21 in Paris by consortia of governments and private investors, led by Bill Gates and Mark Zuckerberg.
National trends
According to the report, China was again, by far, the largest investor in clean energy in 2015, increasing its dominance with a 17% rise to $110.5 billion, as its government spurred on wind and solar development to meet electricity demand, limit reliance on polluting coal-fired power stations and create international champions.
Second was the U.S., which invested $56 billion, up 8% from the previous year and the strongest figure since the era of the"green stimulus," policies in 2011. BNEF says money-raising by yieldcos, plus solid growth in investment in new solar and wind projects, supported the U.S. total.
Europe again saw lower investment in 2015, at $58.5 billion, down 18% from 2014 and its weakest figure since 2006. The U.K. was, by far, the strongest market, with investment up 24% to $23.4 billion. Germany invested $10.6 billion, down 42% on a move to less generous support for solar and, in wind, uncertainty about how a new auction system will work from 2017. France saw an even bigger fall in investment – down 53% to $2.9 billion.
BNEF says clean energy investment fell 43% to $4.1 billion in Canada, but a number of"new markets," together committed tens of billions of dollars to clean energy last year. Those markets include Mexico, which invested $4.2 billion, up 114%.
