The clean energy sector showed resilience in the face of global economic ills and policy uncertainty in the second quarter, with new investment totaling $59.6 billion, according to recently released data from Bloomberg New Energy Finance (BNEF).
That amount represented an increase of 24% over the first quarter, but it is still 18% below the near-record quarterly figure of $72.5 billion, which was recorded in the second quarter of 2011.
According to BNEF, the figures show a clear split between investment in clean energy technology and equipment providers – which remained depressed in Q2 in the face of world economic and stock market troubles – and generating asset investment, which held up well.
The star performance in Q2 came from China, which saw a surge in investment to $18.3 billion in the period from April to June – up 92% from the previous quarter – with several large solar photovoltaic and wind projects each securing hundreds of millions of dollars in financing.
"China has recently quadrupled its domestic goals for solar installations, and it has been by far the biggest market for wind turbines for several years," says Michael Liebreich, CEO of BNEF." These figures underline the pivotal role China is playing in the clean energy sector. Its torrent of supply-side investment was one of the main reasons why renewable energy costs have been plummeting; we are now seeing China creating enough demand to start mopping up some of the resulting overcapacity."
Europe and the U.S. enjoyed solid but less spectacular gains in investment in Q2Â – up 11% and 18%, respectively, over Q1 – to reach $20 billion and $10.2 billion, respectively. Overall, solar accounted for $33.6 billion of investment in Q2 (up 19% over Q1), and wind power accounted for $21.6 billion (up 47% over Q1).
Public market investment in clean energy stood at just $1.2 billion in Q2. This was nearly double the rock-bottom first-quarter figure but 75% below that for Q2 2011. Venture capital and private equity investment was also subdued, at $1.5 billion in Q2 2012, down 28% from Q1 2012 and down 39% from Q2 2011.
The largest public market deal was a $340 million initial public offering by Chinese solar water heater company Jiangsu Sunrain Solar Energy.
Asset finance of utility-scale renewable energy and fuel projects rebounded strongly in Q2, reaching $35.9 billion – up 50% over Q1 but still 24% below the figure recorded in Q2 2011.
The largest Chinese solar project financed was the Shanlu & Shengyu Bayannur Wuyuan PV plant, at $316 million.
Small-scale projects of less than 1 MW, such as rooftop photovoltaics, were estimated to be worth $21.5 billion in Q2 – 13% more than in the same quarter last year.
(This is the first time BNEF has included estimated quarterly figures for small-scale projects. Previous published quarterly figures included only venture capital, private equity, public markets and larger-scale asset investment. Figures for small-scale projects, such as rooftop PV, were provided only annually. The figures for Q1 2012 and Q2 2011 quoted above have been restated for comparability.)
"Small-scale projects are becoming an increasingly important part of the world's energy mix, particularly following the 75% drop in the cost of PV modules over the past three years," Liebreich explains." Germany and Italy remain the largest markets, but small-scale PV is now broadening its geographic base, with installations in the U.S., Japan and China all growing strongly. We see further expansion across the Sun Belt as costs continue to come down."