Clean energy investment in the second quarter totaled $61.5bn, some 12% above the first-quarter 2016 figure but 32% below of $90bn in the equivalent period of 2015. Looking at the 2016 trend so far, and taking the Q1 and Q2 2016 figures together, global investment in the first half of this year was $116.4bn, some 23% lower than in the opening six months of 2015, according to the latest authoritative data from Bloomberg New Energy Finance.
Europe’s figure for H1 2016 was up 4% at $33.5bn, and Brazil was up 36% at $3.7bn. But all the other regions were down – China by 34% to $33.7bn, India down 1% at $3.8bn, the rest of Asia Pacific down 47% at $12.1bn, Middle East and Africa down 46% at $4.2bn, the US down 5% at $23.1bn, and the Americas excluding the US and Brazil down 63% at $2.3bn.
Changes in the solar market are another of the main reasons for the lower trajectory for global investment so far this year. Photovoltaic panels and project construction have become cheaper in many countries, and there has also been a shift from small-scale projects (relatively expensive in terms of dollars per MW) to utility-scale projects, which are cheaper in capex terms.
While the figures for 2016 so far have been on the low side, BNEF also revealed today that global clean energy investment was even stronger last year than thought. Revised figures show that new investment in 2015 was $348.5bn, nearly $20bn above the previous estimate of $328.9bn published in January.
The revision reflects information on investment transactions not disclosed at the time. The two big changes to the 2015 total are an upward revision of $29bn to asset finance of utility-scale wind and solar projects – mainly in China and the US – and a downward revision of $10bn to spending on small distributed capacity, such as rooftop solar, particularly in Japan.
H1 2016 details
The biggest category of investment in the first half of 2016 was, as usual, asset finance of renewable energy projects, at $92bn worldwide, down 19% on H1 2015. The biggest asset finance deals of the second quarter were in offshore wind in Europe, led by the $3.9bn final investment decision on the 588 MW Beatrice project in UK waters by SDIC Power Holdings, SSE Renewables and Copenhagen Infrastructure Partners. Other offshore wind arrays financed in Q2 included the 450 MW Borkum Riffgrund and 385 MW Arkona, both off Germany, and the 400 MW Horns Rev 3 in Danish waters.
Big-ticket projects getting the go-ahead in other renewable power technologies included the 100 MW Engie Kathu solar thermal plant in South Africa, worth an estimated $756m, the 400 MW Enel Cimarron Bend onshore wind installation in the US, at $610m, and the 300 MW AZTE Quaid-e-Azam PV plant in Pakistan, at an estimated $363m.
Small-scale solar projects attracted $19.5bn in the first half of 2016, down 32% on the same period of last year. Much of this was down to lower costs, but there was also a marked slowdown in the largest market for these systems, Japan, where deployment amounted to $4.6bn in H1, down 66% on the same period of 2015.
Public markets investment in specialist clean energy companies was $3.8bn in the first half of 2016, some 56% below that in the first six months of 2015. The top public market fundings of the second quarter were a $1.7bn secondary share issue by US electric car maker Tesla Motors, and two secondary issues by Chinese digital energy companies, Ningbo Sanxing Electric and Genimous Investment, worth $457m and $432m respectively.
Venture capital and private equity investment in clean energy firms totalled $2.8bn in the first half of the year, up 2% on H1 2015. The biggest VC/PE deals were $230m of expansion capital for India-based wind project developer Greenko Energy Holdings, and $120m for Chehejia, a Chinese electric vehicle maker.