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23.01.2019

CLEAN ENERGY INVESTMENT EXCEEDED $300 BILLION ONCE AGAIN IN 2018

Global clean energy investment totalled $332.1 billion in 2018, down 8% on 2017. Last year was the fifth in a row in which investment exceeded the $300 billion mark, according to authoritative figures from research company BloombergNEF (BNEF).

There were sharp contrasts between clean energy sectors in terms of the change in dollar investment last year. Wind investment rose 3% to $128.6 billion, with offshore wind having its second-highest year. Money committed to smart meter rollouts and electric vehicle company financings also increased.

However, the most striking shifts were in solar. Overall investment in that sector dropped 24% to $130.8 billion. Part of this reduction was due to sharply declining capital costs. 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. India is one of the countries with the lowest capital costs per megawatt for photovoltaic plants.

That surplus was aggravated by a sharp change in policy in China in mid-year. The government acted to cool that country’s solar boom by restricting access for new projects to its feed-in tariff. The result of this, combined with lower unit costs, was that Chinese solar investment plunged 53% to $40.4 billion in 2018.

However, the global PV installations increased from 99GW in 2017 to approximately 109GW in 2018.

Offshore wind was a major recipient of clean energy investment last year, attracting $25.7 billion, up 14% on the previous year. Some of the projects financed were in Europe, led by the 950MW Moray Firth East array in the North Sea, at an estimated $3.3 billion, but there were also 13 Chinese offshore wind farms starting construction, for a total of some $11.4 billion. New locations such as Taiwan and the U.S. East Coast are seeing strong interest from developers as well.

Onshore wind saw $100.8 billion of new asset finance globally last year, up 2%, with the biggest projects reaching go-ahead including the 706MW Enel Green Power South Africa portfolio, at an estimated $1.4 billion, and the Xcel Rush Creek installation in the U.S., at $1 billion for 600MW.

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.

Looking at the 2018 clean energy investment numbers by country, China was again the clear leader, but its total of $100.1 billion was down 32% on 2017’s record figure because of the plunge in the value of solar commitments.

The U.S. was the second-biggest investing country, at $64.2 billion, up 12%. 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.

Europe saw clean energy investment leap 27% to $74.5 billion, helped by the financing of five offshore wind projects in the billion-dollar-plus category. There was also a sharp recovery in the Spanish solar market, helped by heavily reduced costs, and a continuation of the build-out of large wind farms in Sweden and Norway offering low-cost electricity to industrial consumers.

 

Other countries and territories investing in excess of $2 billion in clean energy in 2018

Country / Territory

Investments, billion $

In comparison to 2017, %

Japan

27.2

down 16%

India

11.1

down 21%

Germany

10.5

down 32%

The U.K.

10.4

up 1%

Australia

9.5

up 6%

Spain

7.8

up sevenfold

Netherlands

5.6

up 60%

Sweden

5.5

up 37%

France

5.3

up 7%

South Korea

5.0

up 74%

South Africa

4.2

up 40-fold

Mexico

3.8

down 38%

Vietnam

3.3

up 18-fold

Denmark

3.2

up fivefold

Belgium

2.9

up fourfold

Italy

2.8

up 11%

Morocco

2.8

up 13-fold

Taiwan

2.4

up 134%

Ukraine

2.4

up 15-fold

Canada

2.2

down 34%

Turkey

2.2

down 5%

Norway

2.0

no change

Source: BloombergNF, 2019