BNEF: Global Clean Energy Investment Surges


Global clean energy investment jumped to $63.6 billion in the second quarter of this year (Q2'14), up 33% compared to Q1'14 and 9% compared to Q2'13, according to a new report from Bloomberg New Energy Finance (BNEF).

The report says Q2'14 was the strongest quarter for investment since Q2'12, which reached $69.6 billion, and was down only $14.4 billion from the quarterly record of $78 billion in Q2'11. Last quarter's strong figures were driven by a combination of big financings for wind and solar projects sized in the hundreds of megawatts, as well as busy activity in the installation of small-scale rooftop photovoltaics.

Looming large was the $818 million financing of the 121 MW Ashalim I Sun Negev concentrating solar power project in Israel.

On the wind side, the stand-out deal of the quarter was the $3.8 billion financing of the 600 MW Gemini offshore wind farm in the North Sea signed in May. According to BNEF, the deal is the the largest investment decision ever in renewable energy (excluding large hydroelectric).

Geographically, the report says the biggest contributions to the bounce in clean energy investment in Q2'14 came from China, which committed $19.3 billion, more than double the Q1'14 figure and up 16% on the same quarter a year ago; the U.S., which invested $10.6 billion, up 34% from Q1'14 and 2% above another strong figure in Q2'13; and Europe, which invested $14 billion, up 26% on Q1'14 and 47% on a weak Q2 last year.

‘The past two years have seen investment decline by over 20 percent from its 2011 peak, driven equally by the European fiscal crisis, policy uncertainty and plummeting costs for renewable energy equipment,’ says Michael Liebreich, chairman of the advisory board at BNEF. ‘Now, what we are seeing is the new competitiveness of renewable energy winning through, driving a surge in demand.’

Looking at investment by asset class, the report says asset finance of utility-scale projects such as wind farms, solar parks and small hydro dams totaled $38.2 billion in Q2'14, up from $22.8 billion in Q1'14 but down slightly from $38.5 billion in Q2'13. Financing of rooftop and other small-scale solar capacity for Q2'14 was $21.2 billion, up 41% on the same quarter a year earlier.

‘We are expecting the full-year figures for 2014 to show a clear rebound in global investment in clean energy,’ Liebreich says. ‘The debt-and-policy-fuelled bubble years of 2007 to 2010 were inevitably going to be followed by a period of consolidation; that period now definitely looks to be over, and the industry is gathering momentum once again.’

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