By April 11, 2017 Read More →

Tesla, Mexican solar are hotspots in tepid Q1 for clean energy investment


Global new investment in clean energy by category, by quarter, $billion, Source: Bloomberg New Energy Finance. Note: In this chart, asset finance is adjusted for re-invested equity. Clean energy covers renewable energy excluding large hydro, plus energy smart technologies such as energy efficiency, demand response, energy storage and electric vehicles.

Global clean energy investment in Q1 2017 was down 17% compared to Q1 2016

Clean energy investment worldwide totalled $53.6 billion worldwide in the first quarter of this year, down 17 per cent from Q1 2016 but only 7 per cent lower than the final quarter of last year, according to the latest figures from Bloomberg New Energy Finance (BNEF).

The data show a mix of strong and weak features in Q1 2017. The strong points included $1.4 billion of public market share issues by electric vehicle pioneer Tesla, and the estimated $650 million financing by Enel of its Villanueva photovoltaic complex in Mexico – at 754MW, arguably the biggest solar project to reach this stage anywhere in the world so far.

The weaker features included a 60 per cent year-on-year fall in offshore wind financings, to $4.6 billion from a bumper $11.5 billion in first quarter 2016, and lower investment in the two biggest markets, the US and China.

“Q1 this year reflects, once again, the declines in average capital costs per megawatt for wind and solar. This trend means that year-by-year it’s possible to finance equivalent amounts of capacity in these technologies for fewer dollars,” said Jon Moore, chief executive of Bloomberg New Energy Finance.

The US saw $9.4 billion invested in Q1, down 24 per cent, and China $17.2 billion, down 11 per cent.

“It was a relatively quiet first quarter for global investment, but it’s too early to assume that 2017 as a whole will be lower than last year. BNEF analysts are currently expecting both wind and solar to see similar – or higher – numbers of megawatts added this year than last,” said Abraham Louw, analyst, clean energy economics.

Looking at the Q1 2017 data by type of investment, the largest category as usual was asset finance of utility-scale renewable energy projects.

It totaled $39 billion in the first quarter, down 28 per cent from Q1 2016. The biggest projects financed included the 497MW Hohe See offshore wind farm in German waters, at $1.9 billion, and the CPI Binhai H2 offshore wind array of China, at 400MW and $911 million.

In onshore wind, the biggest deal was for the Texoma wind portfolio in the US, at 500MW. In solar PV, the top transaction was Villanueva in Mexico, while in geothermal it was the Supreme Energy Muara Laboh plant, at 80MW and $590 million.

The second largest category of investment was small-scale solar projects of less than 1MW, with a Q1 tally of $10.7 billion, up 8 per cent on the same quarter a year earlier.

Public markets investment in clean energy leaped 215 per cent year-on-year to $2.1 billion, thanks mainly to cash calls by Tesla.

The EV maker and PV systems integrator raised $977.5 million via a convertible issue, and another $402.5 million via a secondary share issue.

Venture capital and private equity funding of clean energy companies reached $2.3 billion in Q1, up 55 per cent, thanks to string of medium-sized deals involving a wide variety of businesses.

The biggest in order were $155 million for Indian wind and solar project developer Greenko, $140 million for US electric bus company Proterra, $130 million for US solar service provider Sunlight Financial, $125 million for India wind developer Hero Future Energies, and $100 million each for US energy efficient window firm View and US solar generator Orazul Energy.

Splitting the figures geographically, Q1 2017 saw declines in investment in the US and China, and a particularly sharp one (down 91 per cent to $1.2 billion) in the UK, where there were no new offshore wind financings to rival last year’s crop.

However, German investment was up 96 per cent year-on-year at $3 billion, while France was up 145 per cent at $1.1 billion and Japan up 36 per cent at $4.1 billion.

Developing countries also had varying fortunes in Q1. Indian investment was $2.8 billion, down just 2 per cent, while Mexico was up 47-fold at $2.3 billion and Brazil down 3 per cent at $1.8 billion.

In Africa, one of the highlights was the $350 million financing of an 80MW biomass plant in Rwanda by HQ Power.

The annual totals for clean energy investment in past years are: $61.7bn in 2004, $88bn in 2005, $129.9bn in 2006, $182.5bn in 2007, $205.2bn in 2008, $206.8bn in 2009, $276.1bn in 2010, $317.5bn in 2011, $290.7bn in 2012, $268.6bn in 2013, $315bn in 2014, $348.5bn in 2015 and $287.5bn in 2016.

The annual figures include certain categories of investment that are not in the quarterly data – namely corporate and government R&D in clean energy and asset finance of smart meters and energy storage projects.


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