Low carbon investment climbs

Global investment in low carbon power technologies was driven by a boom in photovoltaic (PV) installations by China last year, which overshadowed jumps in investment in Australia and Mexico, and declines in Japan, the UK and Germany, according to Bloomberg New Energy Finance.

Global investment in renewable energy and smart energy technologies reached $333.5bn last year, up 3% from 2016, and only 7% short of the record $360.3bn reached in 2015. ‘The 2017 total is all the more remarkable when you consider that capital costs for the leading technology – solar – continues to fall sharply. Typical utility-scale PV systems were about 25% cheaper per MW last year than they were two years earlier,’ says Jon Moore, Chief Executive of BNEF.

Solar investment globally reached $160.8bn in 2017, up 18% on the previous year despite these cost reductions. Just over half of that world total, $86.5bn, was spent in China, up 58% on 2016 with 53GW of PV capacity installed.

China installed about 20GW more solar capacity last year than forecast. ‘This happened for two main reasons – first, despite a growing subsidy burden and worsening power curtailment, China’s regulators, under pressure from the industry, were slow to curb build of utility-scale projects outside allocated government quotas. Developers of these projects assume they will be allocated subsidy in future years,’ comments Justin Wu of BNEF Asia-Pacific. ‘Second, the cost of solar continues to fall in China, and more projects are being deployed on rooftops, in industrial parks or at other distributed locales. These systems are not limited by the government quota.’

Overall, Chinese investment in clean energy technologies was $132.6bn, up 24%. The next biggest investing country was the US with $56.9bn investment, up 1% on 2016 despite antipathy towards renewable energy by the Trump administration.

Large wind and solar project investments pushed Australia to a record $9bn, and Mexico to $6.2 bn. On the downside, Japan saw investment decline to $23.4bn, while Germany slipped to $14.6bn and the UK to $10.3bn due to changes in government policy support. Europe as a whole invested $57.4bn, down 26% year-on-year. India spent $11bn, Brazil $6.2bn, France $5bn, Sweden $4bn, The Netherlands $3.5bn, Canada $3.3bn, South Korea $2.9bn, Italy $2.5bn, Turkey $2.3bn, United Arab Emirates (UAE) $2.2bn and Spain $1.1bn.

By sector, solar led the way, attracting $160.8bn. The two biggest solar projects to get the go-ahead last year were both in the UAE – the $899mn, 1.2GW Marubeni JinkoSolar and Adwea Sweihan plant; and the $968mn, 800MW Sheikh Mohammed Bin Rashid Al Maktoum III installation.

Wind was the second-biggest sector for investment in 2017, at $107.2bn. This was down 12% on 2016 levels. Among record breaking projects, American Electric Power said it would back the 2GW Oklahoma Wind Catcher project in the US, at $2.9bn excluding transmission. Ørsted reached final investment decision on the 1.4GW Hornsea 2 project in the UK North Sea, at an estimated $4.8bn. Some 13 Chinese offshore wind projects were financed last year, with an estimated value of $10.8bn.

The third-biggest sector was energy-smart technologies, where asset finance of smart meters and battery storage, and equity-raised by companies in smart grid, efficiency, storage and electric vehicles, reached $48.8bn in 2017, up 7% on 2016. The remaining sectors lagged far behind, with biomass and waste-to-energy down 36% at $4.7bn, biofuels down 3% at $2bn, small hydro at $3.4bn, low-carbon services at $4.8bn, geothermal at $1.6bn, and marine energy at just $156mn.

Photo: Asia Chang/Unsplash