Clean Energy Investment Up 21% in Q2 2017

Posted on Jul 12, 2017 12:20:00 PM

Financial growth and success on green summer natural green grass landscape with a single tree in the shape of dollar sign. Business concept of growing prosperity and investments-1-196971-edited.jpegInvestment in clean energy has risen 21% quarter on quarter to US$64.8 billion, according to the latest figures from Bloomberg New Energy Finance (BNEF).

Solar power took the biggest share in the second quarter (Q2) of 2017, accounting for US$35.6 billion of spending in the sector, up 19% year-on-year and 20% on Q1.

Two giant solar parks in the UAE — one 800MW plant in Dubai and a 1,177MW farm in Abu Dhabi — contributed US$1.9 billion to the total, while investment levels in China and the USA also rebounded from a dip in Q1.

In an interesting development, there was also a sharp rise in funding for projects in Mexico, Australia, and Sweden, while Egypt and Argentina saw record quarterly figures for investment. The increased prominence of the Middle East and South America are of particular interest to OPEN, as these are two of the regions we have identified as having vast growth potential.

The wind sector experienced a 43% increase in investment over Q1 2017 to US$26.2 billion. This however was still 29% down year-on-year, but with the deep water offshore wind industry on the verge of major expansion investment levels in Europe followed closely by Asia are set to see significant increases in coming years — you can find more details in the OPEN Whitepaper Floating Platforms - The Future of Offshore Wind.

Overall, investment in clean energy was down 12% over the same period last year, however this was by no means due to less capacity being installed, but rather because costs have continued to decline markedly, according to BNEF.

Average global capital costs for solar PV and onshore wind have dropped 15% and 14% respectively during the past 12 months, a trend that is expected to continue. OPEN expects this to have a significant impact on the renewable energy industry.

Abraham Louw, analyst, clean energy economics at BNEF, said: "The $64.8 billion investment total in Q2 was quite firm given that backdrop of falling costs. There was also a good spread of big projects financed in different countries, and less reliance on European offshore wind than in some recent quarters."

The two UAE projects were the biggest announced, with BNEF intimating they may represent a sea change in energy policy in the Middle East.

Victoria Cuming, head of policy for Europe, Middle East and Africa at BNEF, said: “The UAE deals are the largest in that country to date by far, and show that its auction programs are leading to the commitment of hard cash by banks and equity providers. They also signal that oil-producing countries are warming to renewables as part of moves to diversify their economies."

This is part of a process identified by OPEN that goes beyond simply renewable energy. Carbon reduction technology is being phased in to produce bio-fuels as well as for recycling waste and water purification, all with the intention of reducing the region's environmental footprint.

A focus is also being put on innovative agricultural techniques, such as hydroponic farming, to help with food security at minimum water cost. Such initiatives present excellent investment opportunities to companies such as OPEN, which is committed to gaining a healthy return for investors at the same time as maintaining a healthy planet.

Elsewhere, major deals announced included two offshore wind projects in Germany — the 200MW Borkum West II and 112MW Albatros projects valued at $918 million and $532 million.

In China two 300MW offshore wind arrays were announced — the Three Gorges Dafeng and Three Gorges Zhuanghe, costing an estimated US$1.8 billion in total. Mexico weighed in with the 396MW Juchitan de Zaragoza onshore wind farm in Mexico, (US$721 million) while the Avangrid La Joya onshore wind park in the USA (400MW) is worth an estimated US$620 million.

The other clean energy sectors besides wind and solar included biomass and waste-to-energy (US$387 million) small hydro (US$595 million), geothermal (US$423 million) and energy smart technology companies (US$1.5 billion). These too are sectors in which the OPEN Cleantech Green Bond and OPEN Cleantech Equity Fund are heavily involved. All in all, these figures are a good sign of a healthy future for the clean energy sector around the world.

Topics: Clean energy, Green Investment, BNEF

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