Seven giant wind projects, each costing between US$600m and US$4.5bn, and spread between the US, Mexico, the UK, Germany, China and Australia, helped global clean energy investment jump 40% YoY in the third quarter of 2017. The latest authoritative figures from the Bloomberg New Energy Finance database of deals and projects show that the world invested US$66.9bn in clean energy (renewable energy excluding large hydro-electric projects of more than 50 MW; plus energy smart technologies such as smart grid, battery storage and electric vehicles) in Q3 2017, up from US$64.9bn the second quarter of this year and US$47.8bn in Q3 2016.
The numbers for Q3 mean that investment in 2017 to date is running 2% above that in the same period of last year, suggesting that the annual total is likely to finish up close to, or just ahead of, 2016’s figure of US$287.5bn. However 2017 looks highly unlikely to beat the record US$348.5bn reached in 2015.
The stand-out move of Q3 2017 was American Electric Power investing US$4.5bn in Invenergy’s 2 GW Wind Catcher project in the Oklahoma Panhandle. Due to be completed by 2020, the project will have 800 wind turbines, connected to population centres via a 350-mile high-voltage power line. AEP still needs to secure some regulatory approvals, but construction has started and BNEF is treating the project as financed.
The other top asset finance transactions of the quarter were Dong Energy’s (that is changing its name to Ørsted) decision to proceed with the 1.4 GW Hornsea 2 offshore wind farm in the UK North Sea, at an estimated US$3.7bn by the time it is completed in 2022-2023; and Northland Power’s financing of the 252 MW Deutsche Bucht array in German waters, at US$1.6bn.
After those came two Chinese offshore wind farms (Guohua Dongtai and Zhoushan Putuo) totalling 552 MW and an estimated US$2.1bn; the Zuma Reynosa III onshore wind farm in Mexico, at 424 MW and an estimated US$657m; and the 450 MW Coopers Gap onshore wind project in Queensland, Australia at US$631m. The biggest solar project financing was an estimated US$460m for First Solar’s 381 MW California Flats PV park in the US.
Breaking the Q3 2017 figures down by type of investment, asset finance of utility-scale renewable energy projects, such as those above, jumped 72% globally compared to the same quarter of last year, reaching US$54.3bn. Small-scale project investment (solar systems of less than 1 MW) amounted to US$10.8bn in the latest quarter, up 9%.
The two other areas of investment that BNEF tracks quarterly are venture capital and private equity investment in specialist clean energy companies, as well as equity-raising on public markets by quoted companies in the sector. Both these areas saw subdued activity in Q3.
VC/PE funding was only US$662m in Q3, down 79% from a very strong equivalent period a year earlier. Q3 2017 was the weakest quarter for this type of investment since 2005. The only deal to break three-figure millions was a US$109m private equity expansion capital round for Indian solar project developer Clean Max Enviro Energy Solutions.
Public markets investment was also subdued, down 63% year-on-year at US$1.4bn, its lowest quarter since Q1 2016. The biggest equity raisings were by Chinese company Beijing Shouhang Resources Saving, to fund activity in solar thermal generation (a US$675m private placement), and a US$314m initial public offering by Greencoat Renewables, a Dublin-based investment company targeting operating-stage wind projects in Ireland and the rest of the euro area.
Taking every investment category together (asset finance, small-scale projects, VC/PE, public markets, and an adjustment for re-invested equity), country-level results for Q3 included:
• China: $23.8bn, up 35% compared to Q2 2016, down 8% on Q2 2017.
• US: $14.8bn, up 45% YoY, up 8% QoQ.
• Europe: $11.6bn, up 43% YoY, up 45% QoQ.
• Germany: $2.4bn, down 5% YoY, down 26% QoQ.
• Japan: $2.2bn, down 32% YoY, down 17% QoQ.
• India: $1.1bn, down 49% YoY, down 60% QoQ.
• Brazil: $1.7bn, up 32% YoY, down 4% QoQ.
• Mexico: $2.8bn, from almost nothing a year earlier, up 84% QoQ.
• Australia: $1.8bn, up 388% YoY, down 10% QoQ.
• Turkey: $796m, from almost nothing a year earlier, up 312% on Q2 2017.
• France: $631m, up 109% YoY, down 21% QoQ.
• South Korea: $593m, up 143% YoY and up 85% on Q2 2017.
• Argentina: $1.2bn, from almost nothing in Q3 2016 and up 151% on Q2 2017.
• UK: $4.6bn, up 57% YoY, up tenfold QoQ.
• Chile: $1bn, up 134% YoY, up 306% QoQ.