Bloomberg New Energy Finance has released figures showing that clean
energy investment sat at $53 billion in the second quarter of 2015,
continuing to lag behind 2014 figures.
Global Headwinds
2014 was a big year for clean energy investment, but that trend has
certainly not continued through to 2015. Investment numbers for Q1 were
revised to stand at $54.4 billion, dropping a little bit further to Q2’s
$53 billion mark, which itself was a catastrophic 28% down compared to
the $73.6 billion recorded in Q2’2014.
“The first two quarters of 2015, taken together, have seen investment
down 18% compared to the first half of last year,” said Michael
Liebreich, chairman of the advisory board at Bloomberg New Energy
Finance. “It is possible that the Q1 and Q2 2015 figures will be revised
up a bit in due course as some more deals are disclosed, but we have
been predicting since January that this year would see lower investment
than 2014 because of the strong dollar.”
Bloomberg New Energy Finance (BNEF) points to global headwinds
constricting the investment market such as the sudden rise in the US
currency over the past 12 months forcing down the dollar value of deals
struck in other countries, and the volatility of share prices,
particularly in China, restricting equity-raising by clean
energy-specific companies from both public market investors and venture
capital (VC) and private equity (PE) funds.
Global Bright Spots
There continue to be bright spots in the overall darkness, but these
are difficult to focus on considering the seeming negative shift in
investment figures. “In the medium term, we expect investment to resume its strong
growth,” Liebreich added. “Our New Energy Outlook 2015, published in
June, forecast that two thirds of the $12.2 trillion investment in
generating capacity globally between now and 2040 will be in renewables,
as costs per MWh for solar and wind grind downwards.”
Specifically, BNEF points to highlights such as two big European
offshore wind financings, a record quarter for investment in Chile, and
the continued improvement of small-scale solar. Small-scale solar saw investment figures increase by 29% on Q2’2014,
reaching $20.4 billion, and putting small-scale solar projects of less
than 1 MW on track to hit a record this year, with countries such as the
US, Japan, and China, as well as numerous developing countries betting
heavily on the improved cost-effectiveness of rooftop solar PV
technology.
Two big-name European offshore wind farms completed financing in the
second quarter amounting to nearly $4.2 billion between them. The 402 MW
Veja Mate German wind farm is being developed in the North Sea, and is
owned by the Highland Group Holding Limited company. The second wind
farm that completed financing in Q2 was the E.ON Rampion 400 MW offshore wind project, being developed off the Brighton coast in England, in the English Channel.
Chile continued to see impressive investment in renewable energy,
with $1.3 billion being diverted towards wind and solar. This is the
largest investment figures Chile has ever achieved, with the country
making the most of its plentiful renewable energy resources.
Global Investment Figures
China was unsurprisingly the leading investment country, with $15.5
billion worth of commitments. While it marks a 14% increase than in the
first quarter, but down significantly by 36% from 2014’s second quarter.
Of the $15.5 billion, solar accounted for $6.4 billion, which itself is
made up of one-third small-scale projects and two-thirds utility-scale.
The US saw investment figures worth $9.4 billion, down 4% on their
first quarter and similarly down 21% on Q2’2014. Japan came in at third
with $8.1 billion, largely thanks to small-scale solar, down 12% on the
first quarter of 2015 and 10% on the second quarter of 2014.
Global Investment Distribution
The largest category of investment in the second quarter was asset
financing for utility-scale project, wind farms, and other large-scale
projects, amounting to $30.9 billion, which is down 3% on the first
quarter and a whopping 41% on Q2’2014.
Following asset financing was spending on small-scale projects of
less than 1 MW, which reached $20.4 billion, the same as Q1 and down 29%
on a year earlier. Coming in at third place was public market
investment in clean energy, which reached $2.9 billion, up 26% on the
first quarter for a change, but still down 41% from the same quarter of
2014.
Most dramatically, venture capital and private equity investment in
specialized clean energy companies which totaled a measly $564 million,
which was down 31% on Q1 and down 60% on the second quarter of 2014.
These figures are in fact the weakest in any quarter since the third
quarter in 2005 for the VC and PE segment, and distressingly far below
the peak of $4.2 billion in the third quarter of 2008.
“The low VC/PE total reflects the fact that technologies such as wind
and PV are now far more mature, and less open to challenge from young
companies,” said Luke Mills, clean energy economics analyst at Bloomberg
New Energy Finance. “However, there is a great deal of early-stage
investor interest still in other areas such as power storage and home
energy management that could translate into more deals if the wider
markets settled down.”
http://cleantechnica.com/2015/07/11/q2-clean-energy-investments-continue-lag-behind-2014/