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Kaiserwetter Energy Asset Management GmbH, the Hamburg-based independent and international service provider for the management of renewable energy assets, has opened an office in New York, USA, to set up a digital data mining hub for North and South America.

American institutional investors are very interested in moving into renewable energy assets worldwide. Furthermore, the North and South American markets for renewable energies are growing strongly because these facilities produce energy at competitive prices compared to conventional power stations. Kaiserwetter’s digital portfolio management platform has been specifically developed to support this type of ROI-driven investment approach. After all, such investment decisions – which can amount to billions of dollars and be on a global scale – are designed to maximize returns and minimize risks in order to ensure the highest possible degree of investment security. Focusing on these economic foundations is the only way to sustainably drive the necessary investments in renewable energies around the world so that the shared goals of the Paris Climate Accord can be met.

 

Digital portfolio management platforms – a prerequisite for internationally active investors

For Kaiserwetter’s clients such as investment houses, family offices and banks, having a digital platform that makes it possible to actively steer and remotely monitor their global investments is key to achieving their investment goals. Kaiserwetter’s ARISTOTELES platform provides the necessary technical and economic KPIs automatically, up-to-the-minute and free of any type of manipulation. Executive-level dashboards tailored to clients’ individual needs show the results of the system’s data analysis, which makes controlling and reporting processes much more efficient.

By using the Internet of Things, smart data analytics and predictive data simulations, ARISTOTELES helps to substantially maximize the performance of the renewable energies portfolio while at the same time minimizing its risks. This ensures maximum transparency for investments in renewable energy assets on a global level – no matter whether investors are based in Buenos Aires or New York.

Transparency leads to trust which leads to investment security – that’s the triple promise of the ARISTOTELES digital platform,” Schoklitsch emphasizes. “This way Kaiserwetter contributes to encouraging investors and banks to use their capital streams and financial resources to invest in renewable energies around the world – including America.

Source: Kaiserwetter Energy Asset Management GmbH

The financing of two huge PV projects in the United Arab Emirates helped to drive a recovery in global clean energy investment to $64.8 billion in the second quarter of this year, the highest for any quarter since 2Q 2016. The Sheikh Mohammed Bin Rashid Al-Maktoum III plant in Dubai and the Marubeni JinkoSolar and Adwea Sweihan project in Abu Dhabi, at 800 MW and 1.2 GW respectively, contributed $1.9 billion between them to the global investment total in 2Q 2017, according to the latest authoritative figures from Bloomberg New Energy Finance.

Other highlights of the data include bounce-backs in investment in the April-to-June quarter in China and the U.S., and sharply increased funding for projects in Mexico, Australia and Sweden. In addition, Egypt and Argentina, two new markets for renewables, saw record quarterly figures. The weakest feature was the U.K., where investment slumped more than 90% compared to 2Q 2016.

 

Overall, solar was the star sector in 2Q, notching up investment of $35.6 billion, up 19% year-on-year and 20% quarter-on-quarter. Wind had a weaker three months, seeing investment slip 29% year-on-year to $26.2 billion, although it was 43% higher than in the first quarter of this year.

The commitments made to both solar and wind were less in dollar terms per MW in 2Q 2017 than they would have been in previous years because of sharp reductions in costs. BNEF estimates that global capital costs for PV and onshore wind have dropped by 15% and 14% respectively in the last 12 months, in response to fierce competition in manufacturing, and technology improvements.

There were only two large offshore wind arrays financed in Europe in 2Q – the 200 MW Borkum West II and 112MW Albatros projects in German waters, at $918 million and $532 million. Other top project deals of the quarter were two Chinese 300 MW offshore wind arrays, Three Gorges Dafeng and Three Gorges Zhuanghe, costing an estimated $1.8 billion in total, the 396 MW Juchitan de Zaragoza onshore wind farm in Mexico, at $721 million, and the Avangrid La Joya onshore wind park in the U.S., at 400 MW and an estimated $620 million.

Outside solar and wind, other clean energy sectors saw modest flows in 2Q. Biomass and waste-to-energy had investment of $387 million, down 76% year-on-year; small hydro $595 million, down 20%; geothermal $423 million, down 24%; and investment in energy smart technology companies (in areas such as smart grid, energy storage and electric vehicles) was $1.5 billion, down 50% year-on-year.

Overall asset finance of utility-scale renewable energy projects was $51.7 billion in 2Q, down 13% on a year earlier but up 32% on 1Q 2017. Small-scale solar projects of less than 1 MW attracted $10.8 billion, up 8% year-on-year.

Public markets investment in specialist clean energy companies totaled $1.2 billion in the 2Q, down 65% year-on-year and 47% quarter-on-quarter. The largest equity raisings on stock markets were for two Chinese companies, project developer Huaneng Renewables ($281 million) and solar glass maker Xinyi Solar ($194 million).

Venture capital and private equity investment in clean energy continued its recent upswing, with $1.9 billion raised in 2Q, up 50% on the same period in 2016 and 15% on 1Q this year. The top VC/PE deals were $400 million for Microvast Power System, a Chinese maker of batteries for electric and hybrid-electric vehicles, $113 million for French solar developer EREN Renewable Energy and $100 million for U.S. energy-efficient window company View Inc.

Taking all those categories of investment together, country-level results for the second quarter included:

  • China $23.3 billion, down 16% compared to 2Q 2016, up 32% from 1Q 2017.
  • The U.S. $14.7 billion, up 6% year-on-year, up 51% quarter-on-quarter.
  • Europe $8.8 billion, down 49% year-on-year, up 10% quarter-on-quarter.
  • Germany $3.2 billion, down 34% year-on-year, down 7% quarter-on-quarter.
  • Japan $2.9 billion, up 12% year-on-year, down 11% quarter-on-quarter.
  • India $2.6 billion, up 11% year-on-year, down 4% quarter-on-quarter.
  • A.E. $2.1 billion, up from almost nothing in 2Q 2016 and 1Q 2017.
  • Brazil $1.9 billion, down 1% year-on-year, up 10% quarter-on-quarter.
  • Mexico $1.8 billion, up 261% year-on-year, down 10% quarter-on-quarter.
  • Australia $1.5 billion, up 77% year-on-year, down 29% quarter-on-quarter.
  • Sweden $887 million, up 213% year-on-year, and up from almost nothing in 1Q.
  • France $845 million, up 43% year-on-year, down 1% quarter-on-quarter.
  • Egypt $805 million, up from almost nothing in 2Q 2016 and 1Q 2017.
  • Argentina $464 million, up from almost nothing in 2Q 2016 and 1Q 2017.
  • The U.K. $407 million, down 93% year-on-year, down 60% quarter-on-quarter.

Source: Bloomberg New Energy Finance

China and India have surpassed the U.S. to become the two most attractive nations for renewable energy investment – according to the report “Renewable energy country attractiveness index (RECAI)” released by UK firm Ernst & Young – displacing the U.S. for the first time since 2015. The U.S. now stands at third place behind first place China, followed by India.

A marked shift in US policy has resulted in the demise of the Clean Power Plan, which has made renewable investors more nervous about possible reductions to the Investment Tax Credit and Production Tax Credit. Concerns also include if gas prices continue to remain low and transmission capacity remains stagnant.

 

In January 2017, China’s National Energy Administration (NEA) announced the nation will invest around $363 billion in renewable energy generation by 2020. The investment will see renewables share in the country’s power mix increase to 50% in addition to creating 13 million jobs – the NEA said. China also plans to launch a pilot tradable green certificate program in July 2017 for project operators to prove they have generated clean power and sell to consumers. The country has also committed to cutting greenhouse gas emissions by 18% per unit of economic growth by 2020 under the Paris Agreement.

According to a report released last month, published by Greenpeace East Asia and industry associations and research groups, China’s wind and solar energy sectors could receive up to $782 billion in investments from 2016 to 2030. In 2016, China’s solar capacity grew an impressive 81.6% to 77.4 GW, while wind power grew 13.2% from 2015 to 2016 to 149 GW.

In India, the Government plans to develop 175 GW of renewable energy capacity by 2022 and to have renewable energy account for 40% of installed capacity by 2040. India added a record wind and solar energy capacity, both exceeding 5,000 MW, from 2016 to 2017. India has now surpassed the 10 GW solar PV installation milestone, having tripled its capacity in less than three years, according Indian Minister Piyush Goyal.

The report highlighted that economically viable renewable energy alternatives coupled with security of supply concerns are encouraging more nations to transition to a cleaner energy future. Kazakhstan (37), Panama (38) and the Dominican Republic (39) have all entered the index for the first time.

Source: Ernst & Young

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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.

Upward revision

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.

Source: BNEF

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Coal and gas-fired electricity generation last year drew less than half the record investment made in solar, wind and other renewables capacity — one of several important firsts for green energy announced in a UN-backed report.

Global Trends in Renewable Energy Investment 2016, the 10th edition of UNEP’s annual report, launched by the Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance and Bloomberg New Energy Finance (BNEF), says the annual global investment in new renewables capacity, at $266 billion, was more than double the estimated $130 billion invested in coal and gas power stations in 2015.

All investments in renewables, including early-stage technology and R&D as well as spending on new capacity, totalled $286 billion in 2015, some 3% higher than the previous record in 2011. Since 2004, the world has invested $2.3 trillion in renewable energy (unadjusted for inflation). (All figures for renewables in this release include wind, solar, biomass and waste-to-energy, biofuels, geothermal, marine and small hydro, but exclude large hydro-electric projects of more than 50 megawatts).

Just as significantly, developing world investments in renewables topped those of developed nations for the first time in 2015. Helped by further falls in generating costs per megawatt-hour, particularly in solar photovoltaics, renewables excluding large hydro made up 54% of added gigawatt (GW) capacity of all technologies last year. It marks the first time new installed renewables have topped the capacity added from all conventional technologies.

The 134 gigawatts of renewable power added worldwide in 2015 compares to 106GW in 2014 and 87GW in 2013. Were it not for renewables excluding large hydro, annual global CO2 emissions would have been an estimated 1.5 gigatonnes higher in 2015.GTR_infogr-02-baja

UNEP Executive Director Achim Steiner said, “Renewables are becoming ever more central to our low-carbon lifestyles, and the record-setting investments in 2015 are further proof of this trend. Importantly, for the first time in 2015, renewables in investments were higher in developing countries than developed.”

“Access to clean, modern energy is of enormous value for all societies, but especially so in regions where reliable energy can offer profound improvements in quality of life, economic development and environmental sustainability. Continued and increased investment in renewables is not only good for people and planet, but will be a key element in achieving international targets on climate change and sustainable development. ”

“By adopting the Sustainable Development Goals last year, the world pledged to end poverty, promote sustainable development, and to ensure healthier lives and access to affordable, sustainable, clean energy for all. Continued and increased investment in renewables will be a significant part of delivering on that promise.”

Said Michael Liebreich, Chairman of the Advisory Board at BNEF:  “Global investment in renewables capacity hit a new record in 2015, far outpacing that in fossil fuel generating capacity despite falling oil, gas and coal prices. It has broadened out to a wider and wider array of developing countries, helped by sharply reduced costs and by the benefits of local power production over reliance on imported commodities.”inversion-anual-baja

As in previous years, the report shows the 2015 renewable energy market was dominated by solar photovoltaics and wind, which together added 118GW in generating capacity, far above the previous record of 94 GW set in 2014. Wind added 62GW and photovoltaics 56 GW. More modest amounts were provided by biomass and waste-to-power, geothermal, solar thermal and small hydro.

In 2015, more attention was drawn to battery storage as an adjunct to solar and wind projects and to small-scale PV systems.

Energy storage is of significant importance as it is one way of providing fast-responding balancing to the grid, whether to deal with demand spikes or variable renewable power generation from wind and solar. Last year, some 250MW of utility-scale electricity storage (excluding pumped hydro and lead-acid batteries) was installed worldwide, up from 160MW in 2014.

Developing countries on the rise led by China and India

In 2015, for the first time, investments in renewable energy in developing and emerging economy nations ($156 billion, up 19% compared to 2014) surpassed those in developed countries ($130 billion, down 8% from 2014).

Much of these record-breaking developing world investments took place in China (up 17% to $102.9 billion, or 36% of the world total).

Other developing countries showing increased investment included India (up 22% to $10.2 billioGTR_infogr-01-bajan), South Africa (up 329% to $4.5 billion), Mexico (up 105% to $4 billion) and Chile (up 151% to $3.4 billion).

Morocco, Turkey and Uruguay all joined the list of countries investing more than $1 billion. Overall developing country investments last year were 17-times higher than in 2004.

Among developed countries, investment in Europe was down 21%, from $62 billion in 2014 to $48.8 billion in 2015, the continent’s lowest figure for nine years despite record investments in offshore wind projects.

The United States was up 19% to $44.1 billion, and in Japan investment was much the same as the previous year at $36.2 billion.

The shift in investment towards developing countries and away from developed economies may be attributed to several  factors: China’s dash for wind and solar, fast-rising electricity demand in emerging countries, the reduced cost of choosing renewables to meet that demand, sluggish economic growth in the developed world and cutbacks in subsidy support in Europe.

Still a long way to go

That the power generation capacity added by renewables exceeded new capacity added from conventional sources in 2015 shows that structural change is under way.

Renewables, excluding large hydro, still represent a small minority of the world’s total installed power capacity (about onesixth, or 16.2%) but that figure continues to climb (up from 15.2% in 2014). Meanwhile actual electricity generated by those renewables was 10.3% of global generation in 2015 (up from 9.1% in 2014).potencia-mundial-baja

“Despite the ambitious signals from COP 21 in Paris and the growing capacity of new installed renewable energy, there is still a long way to go,” said Prof. Dr. Udo Steffens, President of the Frankfurt School of Finance & Management.

“Coal-fired power stations and other conventional power plants have long lifetimes. Without further policy interventions, climate altering emissions of carbon dioxide will increase for at least another decade.”

The recent big fall in coal, oil and gas prices makes conventional electricity generation more attractive, Dr. Steffens added. “However, the commitments made by all nations at the Paris climate summit in December, echoing statements from lastyear’s G7 summit, require a very low- or no-carbon electricity system.”

 

Photo Copyright: PATRICK PLEUL / AFP Reporters

 

Clean energy investment surged in China, Africa, the USA, Latin America and India in 2015, driving the world total to its highest ever figure, of US$329.3bn, up 4% on 2014’s revised figure of $315.9bn and beating the previous record, set in 2011, by 3%. 2015 was also the highest ever for installation of renewable capacity, with 64 GW of wind and 57 GW of solar PV commissioned during the year, an increase of nearly 30% over 2014. The latest figures from Bloomberg New Energy Finance show global investment growing in 2015 to nearly six times its 2004 total and a new record of one third of a trillion dollars, despite four influences that might have been expected to restrain it.

These influences were: further declines in the cost of solar PV power, meaning that more capacity could be installed for the same price; the strength of the US currency, reducing the dollar value of non-dollar investments; the continued weakness of the European economy, the former powerhouse of renewable energy investment; and, perhaps most significantly, the plunge in fossil fuel commodity prices.

Over the 18 months to the end of 2015, the price of Brent crude plunged 67% from $112.36 to $37.28 per barrel with international steam coal delivered to the NW Europe hub dropping 35% from $73.70 to $47.60 per tonne. Natural gas in the USA fell 48% on the Henry Hub index from $4.42 to $2.31 per million BTU. Read more…

Article published in: FuturENERGY January-February 2016

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