World Economy

Global Clean Energy Investment Surges

Global Clean Energy  Investment Surges Global Clean Energy  Investment Surges

The global clean tech market enjoyed its strongest investment performance in years during 2014, according to new figures showing total clean energy investment jumped 16% to $310b.

It is the first annual increase for three years but falls short of 2011’s peak of $317.5 billion. The figures include venture capital, private equity, public financing and research investment, PVTech reported.

Leading analyst firm Bloomberg New Energy Finance (BNEF) on Friday published its latest report, detailing how increased investment in solar PV and offshore wind projects resulted pushed total funding back towards record levels.

The company said total investment of $310b represented a more than five-fold increase on the $60.2b achieved a decade earlier. The strong performance left investment levels just 2% short of the record annual investment of $317.5b as government stimulus programs mobilized a wave of new projects in the US and Asia.

Michael Liebreich, chairman of the advisory board for BNEF, said the strong performance throughout 2014 had beat previous projections. “Throughout last year, we were predicting that global investment would bounce back at least 10% in 2014, but these figures have exceeded our expectations,” he said in a statement. “Solar was the biggest single contributor, thanks to the huge improvements in its cost-competitiveness over the last five years.”

He also downplayed concerns that the collapse in the oil price during the second half of 2014 would hamper clean energy investment. “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,” Liebreich commented. “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.”

Global Investments

The data shows that most of the leading clean energy markets and technologies enjoyed a strong performance during 2014.

Clean energy investment in China jumped 32% to a record $89.5b, while the US market grew 8% to $51.8b, Japan saw investment climb 12% to $41.3b, and Canadian investment soared 26% to $9b.

Similarly, leading emerging economy markets continued their recent strong run of form. Investment in Brazil jumped 88% to $7.9b, while Indian investment climbed 14% to $7.9b, and South Africa saw its clean energy investment jump 5% to $5.5b.

Europe was the only major clean energy market to post a more mixed performance, with total clean energy investment inching up 1% to $66b, primarily as a result of significant new investment in offshore wind projects.

UK investment climbed just 3% to $15.2b, a performance that was almost exactly matched by Germany where investment also climbed 3% to $15.3b. Investment in France jumped 26% to $7b, in large part thanks to the confirmation of the 300MW Cestas solar project. In contrast, investment in Italy dropped 60% to $2b, with BNEF attributing the fall to retroactive cuts in incentives for solar PV plants.

Australia also provided a bleak picture for clean energy investors, as total investment fell 35% to $3.7b in the wake of the on-going policy uncertainty that has resulted from the government’s controversial review of its Renewable Energy Target.

Other Sources

Globally, the market was dominated by solar projects, as falling technology costs helped drive a 25% year-on-year increase in investment to just short of $150b. Wind energy investment rose 11% to nearly $100b, while investment in so-called “energy smart technologies” climbed 10% to just over $37b. The picture was less encouraging for biofuels, biomass and waste-to-energy, and small hydro-electric projects, which saw investment levels fall 7%, 10% and 17%, respectively.

BNEF also confirmed a strong performance across different investment categories.

For example, new figures published separately to the investment report today detailed how Green Bond issuance soared from $15b in 2013 to $38b last year. The data will provide further ammunition for green bond campaigners, who have tipped the market to expand rapidly to around $100b this year as growing numbers of banks issue dedicated clean energy and climate bonds.