BNEF: Clean energy investment in 2014 beats expectations: Surges in solar investment in China and the US helped to drive the global total up 16% to USD 310 billon

Michael Liebreich, chairman of the advisory board for Bloomberg New Energy Finance: “Solar was the biggest single contributor, thanks to the huge improvements in its cost-competitiveness over the last five years”
Michael Liebreich, chairman of the advisory board for Bloomberg New Energy Finance: “Solar was the biggest single contributor, thanks to the huge improvements in its cost-competitiveness over the last five years”

Global clean energy investment rebounded strongly in 2014, boosted by demand for large-scale and rooftop solar photovoltaics (PV) on the back of its greatly improved competitiveness, and by the financing of a record USD 19.4 billion of offshore wind projects according to annual data, published by Bloomberg New Energy Finance (BNEF) on January 9th, 2015.

BNEF’s figures show that global investment in clean energy was USD 310 billion last year. This was up 16% from a revised USD 268.1 billion in 2013, and more than five times the figure of USD 60.2 billion attained a decade earlier, in 2004, albeit still 2% below the all-time record of USD 317.5 billion reached in 2011.

 

China leads global clean energy investment with a record USD 89.5 billion

The jump in investment in 2014 reflected strong performances in many of the main centers for clean energy deployment, with China up 32% to a record USD 89.5 billion, the US up 8% to USD 51.8 billion (its highest figure since 2012), Japan up 12% to USD 41.3 billion, Canada up 26% at USD 9 billion, Brazil up 88% at USD 7.9 billion, India up 14% to USD 7.9 billion, and South Africa up 5% at USD 5.5 billion.

Europe, despite the flurry in offshore wind, was a relative dull spot overall, investment there edging 1% higher to USD 66 billion.

 

Michael Liebreich: These figures have exceeded our expectations

“Throughout last year, we were predicting that global investment would bounce back at least 10% in 2014, but these figures have exceeded our expectations. Solar was the biggest single contributor, thanks to the huge improvements in its cost-competitiveness over the last five years,” said Michael Liebreich, chairman of the advisory board for Bloomberg New Energy Finance.

“Healthy investment in clean energy may surprise some commentators, who have been predicting trouble for renewables as a result of the oil price collapse since last summer. Our answer is that 2014 was too early to see any noticeable effect on investment, and anyway the impact of cheaper crude will be felt much more in road transport than in electricity generation.”

 

Many big solar, onshore wind projects financed in 2014

Looking at the different categories of investment last year, asset finance of renewable energy projects was by far the largest, at USD 170.7 billion, some 10% higher than in 2013.

Many big solar and onshore wind projects around the world were financed in 2014. They included the Setouchi Mega PV project in Japan, at an estimated USD 1.1 billion for 250 MW and the Xina Solar One solar thermal plant in South Africa, at USD 1 billion for 100 MW.

 

Rooftop solar PV investment up 34%

The second-largest category of investment was small distributed capacity – projects of less than 1MW, predominantly rooftop solar PV. This saw USD 73.5 billion committed in 2014, up 34%. Research and development by governments and corporations totaled USD 29 billion, some 2% more than in 2013, while asset finance of energy smart technologies such as smart meters came in at US 16.8 billion, up 8% on 2013.

New equity raised for clean energy companies on public markets hit a seven-year high in 2014, at USD 18.7 billion, up 52% on the year. US electric car maker Tesla Motors raised USD 2.3 billion via convertible issues, and a succession of US- and UK-listed "yieldcos" and project funds tapped investors for USD 3.9 billion in total.

 

Sunnova and Sunrun amongst the largest VC/PE deals

Venture capital and private equity investment in clean energy was USD 4.8 billion in 2014, up 16% on the year but still far below the USD 12.3 billion record set in 2008. The largest VC/PE deals last year were a USD 250 million expansion round for US lithium-ion battery firm Boston-Power, a USD 250 million expansion round for US solar installer Sunnova Energy, and a USD 150 million late-stage VC round for US residential solar financier Sunrun.

 

Solar investment up 25% on 2013

Solar made up almost half of total clean energy investment in 2014, its highest share ever. Last year, solar saw USD 149.6 billion committed, up 25% on 2013.

The US investment total of USD 51.8 billion in 2014 included USD 15.5 billion of utility-scale asset finance, with wind down more than half at USD 5.9 billion, hit by uncertainty over the future of its key incentive, the Production Tax Credit, and solar up 39% at USD 8.9 billion.

The Chinese total of USD 89.5 billion included USD 73 billion of asset finance, with both wind (USD 38.3bn) and solar (USD 30.4bn) up by more than 20%. China saw USD 7.6 billion of spending on small distributed capacity.

 

Overall investment in the UK and in Germany rose by 3 percent

Among European countries, overall investment rose 3% in the UK to USD 15.2 billion and 3% in Germany to USD 15.3 billion, while France jumped 26% to USD 7 billion thanks partly to the financing of Europe's biggest ever solar PV plant, the 300 MW Cestas project. Big offshore wind deals drove the figure for the Netherlands up 232% to USD 6.7 billion, but investment in Italy fell 60% to USD 2 billion, hit by retroactive cuts in tariff support for PV plants.

In Australia, clean energy investment tumbled 35% to USD 3.7 billion, the lowest since 2009, as wind and solar project developers delayed decisions while they awaited the government's response to its Renewable Energy Target review.

 

2015-01-09 | Courtesy: Bloomberg New Energy Finance (BNEF) | solarserver.com © Heindl Server GmbH

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