Quarterly investment in renewable energy firms has increased since the start of 2016, but is still below the record highs set in 2015, according to Bloomberg New Energy Finance.
Last year, total clean energy investment reached around $348.5 billion according to BNEF, a figure that was important for two major reasons: on the one hand, it was the highest annual investment in renewable companies ever, beating the previous high set in 2011, and on the there it was more than twice the amount invested in coal and gas fired power stations over the same year.
This year, however, is off to a slower start and thus far looks unlikely to match the highs set in 2015. So far in 2016, just under $116.5 billion has been investment in renewable energy, down almost a quarter from the same figure for the first six months of 2015.
There has been quarterly improvement this year, with $61.5 billion worth of investment coming through in the second quarter, compared with just under $55 billion in the first. However, both are still lower than the equivalent figures for 2015. In the second quarter of last year, investment was 32% higher than this year, at $90 billion.
Part of the reason for the drop this year compared to last is down to an upward revision of last years’ figures for investment in wind and solar generators in the US and China.
However, this only contributes to some of the shortfall, while the rest is down to rather drastic reductions in investment in major countries, including China and the US (down by 34% and 5% respectively), but also in much of the world except for Europe and Brazil, where investment increased by 4% and 36%. Across the first two quarters of 2016, $33.5 billion worth of clean energy investment has come from Europe, $3.7 billion from Brazil, $23.1 billion from the US and $33.7 billion from China.
The biggest reductions in investment were in the Middle East and Africa, where 46% less was invested in the first half of this year compared to last and the Americas excluding Brazil and the US, down collectively by 63% to $2.3 billion.
The chairman of BNEF’s advisory board, Michael Liebreich, said: “It is now looking almost certain that the global investment total for this year will fail to match 2015’s runaway record. China’s financing of wind and solar projects was even higher last year than previously estimated, and the hangover this year caused by weak electricity demand and policy changes in that country will therefore be all the greater.”
Partly because of this upward revision, and partly because of the impressive size of 2015’s clean energy investment figures generally, though, BNEF associate Abraham Louw did assure that the downward shift into 2016 isn’t necessarily something to be concerned about.
He said: “One shouldn’t look at these latest Q2 figures too negatively. Last year’s investment of $348.5bn was really quite groundbreaking – up 11% over 2014 and 30% over 2013.”
According to the Bloomberg report: “The biggest category of investment in the first half of 2016 was, as usual, asset finance of renewable energy projects, at $92bn worldwide, down 19% on H1 2015.”
Of these asset financing deals in Q2, the largest were in European off shore wind projects. The biggest of these was investment in a 588 megawatt project in the UK called Beatrice, a joint venture between Talisman Energy and Scottish and Southern Energy (SSE) worth $3.9 billion.
