Finance, Sourcing Renewables  -  January 16, 2019

Clean energy investment exceeds $300B for 5th year

Global clean energy investment reached $332.1 billion in 2018, the fifth year in a row to top $300 billion despite an 8% decline from 2017.

A report from BloombergNEF (BNEF) noted sharp contrasts between clean energy sectors over the past year. Wind investment rose 3% to $128.6 billion, with offshore wind having its second-highest year. Increases were also posted for smart meter rollouts and electric vehicle company financings. On the other hand, overall investment in solar declined by 24% to $130.8 billion.  BNEF attributed the reduction to sharply declining capital costs. The report noted, “BNEF’s global benchmark for the cost of installing a megawatt of photovoltaic capacity fell 12% in 2018 as manufacturers slashed selling prices in the face of a glut of PV modules on the world market.”

Looking at the wind sector, investment in offshore wind rose 14% to $25.7 billion. David Hostert, head of wind analysis at BNEF, said: “The balance of activity in offshore is tilting. Countries such as the U.K. and Germany pioneered this industry and will remain important, but China is taking over as the biggest market and new locations such as Taiwan and the U.S. East Coast are seeing strong interest from developers.”

Among other renewable energy sectors, investment in biomass and waste-to-energy rose 18% to $6.3 billion, while that in biofuels rallied 47% to $3 billion. Geothermal was up 10% at $1.8 billion, small hydro down 50% at $1.7 billion and marine up 16% at $180 million. Total investment in utility-scale renewable energy projects and small-scale solar systems worldwide was down 13% year-on-year at $256.5 billion, although the gigawatt capacity added increased.

Overall, China led in 2018 clean energy investment numbers; even with a 32% decline, the country hit a total of $100.1 billion. U.S. investments ranked second at $64.2 billion, up 12%. The report noted, “Developers have been rushing to finance wind and solar projects in order to take advantage of tax credit incentives before these expire early next decade. There has also been a boom, in both the U.S. and Europe, in the construction of projects benefitting from power purchase agreements signed by big corporations such as Facebook and Google.”

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