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solar power

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A combination of high electricity tariffs, falling PV prices and a lack of reliability in the grid is spurring sales of on-site solar to business customers in Sub-Saharan Africa. This is the conclusion of a new report by research company BloombergNEF (BNEF), commissioned by responsAbility Investments AG, assessing the potential of commercial and industrial solar opportunities in the region.

The report entitled “Solar for Businesses in Sub-Saharan Africa” finds that the commercial and industrial (C&I) solar sector in Sub-Saharan Africa is growing not because of regulatory support – as has been the case in many developed economies – but because of economics. On-site solar power is cheaper than the electricity tariffs paid by commercial or industrial clients in 7 out of 15 markets in Sub-Saharan Africa (excluding South Africa) studied by BNEF.

While the market is still small, it has great potential. An immense energy deficit and crumbling infrastructure makes Sub-Saharan Africa fertile ground for solar. As of November 2018, developers built a record number of 74 MW serving business customers directly, offering them cheaper power than the grid. Kenya, Nigeria, and Ghana installed 15 MW, 20 MW, and 7 MW respectively as of November 2018.

BNEF_AFRICA

According to the authors, the financial sector has yet to take on a major role in providing funding for C&I solar systems. So far, most business customers have bought systems for cash, without using third-party finance. There are, however, big opportunities for specialized financiers in the region to do more.

responsAbility-managed funds have financed the off-grid solar sector in Sub-Saharan Africa for five years, focusing primarily on residential customers. The company expects solar to be increasingly deployed on C&I sites, where it often complements diesel power generation.

Electricity outages are commonplace across most of Sub-Saharan Africa. When the grid is out, customers must either shoulder high opportunity costs from lost sales or manufacturing output, or resort to much costlier backup power, usually from diesel. This is where financing solar installations can contribute to climate change mitigation by replacing fossil fuel.

responsAbility, in cooperation with the dedicated climate fund it manages, and the Swiss State Secretariat for Economic Affairs (SECO), commissioned BNEF to identify and assess potential target markets for C&I solar in Sub-Saharan Africa. Following a desk-based regional study that identified three high-priority markets, BNEF conducted interviews with 36 stakeholders in those markets. Overall, stakeholders are optimistic about the future and BNEF expects 2019 to be a record year for the C&I industry.

Source: BloombergNEF

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aventron has signed with Solarpack Corporacion Tecnologica general contractor agreements for the turnkey construction of two PV plants in Spain with a capacity of 50 MW each. Both projects have already passed the required environmental impact assessments and the final building permits are expected at the beginning of 2019. The development partner is the Spanish company Synergia Energy Solutions SL.

The two ground-mounted systems in the Toledo and Murcia regions are among the first major solar projects in Europe to be implemented and operated without subsidies or other direct government support instruments. Each individual park will cover an area of around 90 hectares and is expected to generate around 95 million kilowatt hours of electricity per year. The total amount of energy generated thus corresponds to the annual requirements of a city with around 55,000 inhabitants.

aventron is currently in advanced negotiations on the power purchase agreements for the energy generated in the projects and is structuring the necessary external financing on this basis. Financial close and start of construction is expected in the second quarter of 2019.

The two solar park projects Bargas and Algibicos are a milestone in the implementation of aventron’s growth strategy. On the one hand, aventron exceeds the short-term target of 500 MW for portfolio expansion earlier than planned and on the other hand, its solar production segment will be substantially strengthened. aventron’s next step is to achieve an installed capacity of 600 MW in its core areas of wind, water and sun by the end of 2020.

Source: aventron

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The municipality of Talaván in Cáceres will be home to one of Spain’s largest solar photovoltaic power plants, and one of the first in the country to be financed outside renewable energy auctions. The European Investment Bank (EIB) is financing this project with a EUR 70m Juncker Plan loan with the aim of helping to combat climate change. When it starts operating in 2020, this new plant will prevent the release of 263 000 tonnes of CO2 into the atmosphere a year by generating electricity using solar energy.

The EIB is granting this EUR 70m in financing to Talasol Solar via a project finance arrangement making it possible to build and operate the new facility. The solar plant will have a capacity of 300 MW.

The project is under development by Ellomay Capital Ltd. and is a major step forward for the renewable energy sector in Spain as it is being financed at market rates. The EIB is providing this loan under the Investment Plan for Europe, known as the Juncker Plan. This increases the EIB Group’s capacity to finance investment projects that, in line with the Plan’s criteria, involve activities which by their structure or nature make it possible to support objectives such as combating climate change and ensuring sustainable economic growth.

The new Talaván solar photovoltaic plant will create new economic opportunities in the Extremadura region. The project will necessitate the employment of 500 people during the implementation phase and 15 on a permanent basis once the plant is operational. It will also help achieve the objectives set by the National Renewable Energy Action Plan, which states that 20% of the energy used in Spain in 2020 must come from renewable sources.

The EIB and climate action

The EU bank is the multilateral institution that provides most finance for climate action worldwide. The EIB dedicates at least 25% of its total activities to this priority, a figure that increases to 35% for developing countries.

Source: EIB

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SolarPower Europe has launched its “Grid Intelligent Solar – Unleashing the Full Potential of Utility-Scale Solar Generation” report, which shows that solar is not only the lowest cost power source in many regions and crucial to meet EU climate targets, but also a reliable partner that helps to keep the grid stable and supports Europe’s security of supply.

Solar PV has transitioned from being a renewable energy option to the responsible energy option. This report points to the fact that utility-scale solar PV provides grid reliability and flexibility services that are even more effective than conventional power plants in some cases, if the project is designed inclusive of advanced plant controls.

SolarPower Europe anticipates in its Global Market Outlook 2018-2022 a 2-digit market growth in Europe in the coming years. Solar is ready to play a major role in the European Union meeting its 32% renewables target by 2030. In its New Energy Outlook 2018, Bloomberg NEF expects an 87% renewables scenario in 2050 in Europe, with 1,400 GW of solar installed, contributing to around 36% of total power generation. The bulk of solar, over two thirds, is expected to come from utility scale power plants.

Today’s leading EU solar markets have missed to tap the potential of utility-scale solar so far – tendered solar capacities are usually too small, regulatory frameworks are often inadequate to support the huge demand of corporate power sourcing from large-scale solar. This needs to be fixed to enable the over 1,100% solar capacity growth to 1,400 GW in 2050 forecasted by Bloomberg from 114 GW end of 2017 in Europe.

In order to prepare for large-scale adoption of solar power, advanced solar markets need to leave the solar 1.0 phase behind, when utility-scale PV plants have mostly been installed with the intention to maximise individual system yields. It is now about solar 2.0 – that’s grid flexible solar PV plants integrated into the energy system.

With the right market design, utility-scale solar is ready to support Europe’s security of supply, with a stronger accuracy than conventional generation assets – such as coal and gas.

While solar can already achieve significant grid penetration economically without storage, quickly decreasing stationary battery cost enables the solar 3.0 phase, where storage provides dispatchable solar capacity. The report provides case studies about the first utility-scale solar projects with battery storage that provide ancillary and other grid services.

Source: SolarPower Europe

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SENER, global engineering and technology group, together with its engineering, procurement and construction (EPC) partners, Emvelo and Cobra, announces that the Ilanga-1 Concentrated Solar Power (CSP) plant has been completed.

The EPC partners reached the certificate to initiate commercial operation of the turnkey solar thermal power plant project located at Karoshoek Solar Valley on 30 November 2018. This means the conclusion of construction, commissioning and testing of the 100 MWe Concentrated Solar Power plant. The plant has been handed over to the owner, Karoshoek Solar One (RF) Proprietary Limited. The plant will supply electricity to the national grid through Eskom, the South African electricity public utility.

“This is a historic moment in South Africa’s energy transition as another renewable energy powerplant that supplies clean, reliable, sustainable and dispatchable energy is successfully completed. We are particularly pleased that it was completed on time, within budget, within the required quality standards, in line with the contracted output performance and within acceptable safety standards. We are also pleased with the level of localization, BBBEE (Broad-Based Black Economic Empowerment), skills development and job creation that was achieved on the project. It is a clear indication of what is possible if the CSP industry can be nurtured and allowed to flourish in South Africa. SENER is proud of being a technology provider, engineering subcontractor and member of the EPC contractor on such a special project.” said Siyabonga Mbanjwa, Regional Managing Director for SENER Southern Africa.

“Ilanga 1 will provide on-demand power to South Africans for the next 20 years, in the same manner as conventional power generation projects. It has no fuel costs nor harmful emissions and has created employment for many people in the area of Upington. Ilanga 1 is an important step in South Africa’s energy future, procuring on-demand power from an efficient and accountable source with no resource risk and a controlled tariff. We as Grupo Cobra look forward to the continued growth of the local energy sector and will continue to provide world class development, construction and operations services to the South African market” said Jose Minguillon, CEO of Cobra South Africa.

“This is the first CSP plant in the history of the South African Renewable Energy Independent Power Producer Program (REIPPPP) that was conceived and developed by a 100% black owned South African entity. This demonstrates that Black Industrialists can lead in the development and execution of large renewable energy infrastructure projects. With a 550MWe pipeline of projects that are shovel ready at Karoshoek Solar Valley, the potential to localize, create jobs and provide business opportunities to new youth and women led SMMEs is colossal and what is required is for government to ensure that CSP remains a part of its energy mix policy and is included in the Draft IRP” said Pancho Ndebele, founder of Emvelo.

The joint venture between SENER, Cobra and Emvelo was appointed by Karoshoek Solar One (RF) Proprietary Limited to provide engineering, procurement and construction services as well as operation and maintenance for the project. The Ilanga-1 CSP plant, made up of 266 SENERtrough® loops, with approximately 870,000 square metres of curved mirrors, is equipped with a molten salt storage system (SENER proprietary technology) that allows 5 hours of thermal energy storage to extend the operational capacity of the plant to continue producing electricity in absence of solar radiation. This is a unique characteristic of CSP that radically changes the role of renewable sources in the global power supply. SENERtrough® collectors, a parabolic trough technology, are also specifically designed and patented by SENER, aimed at improving the efficiency of the plant.

In line with government’s four accords, emanating from the New Growth Path (NGP); namely basic education, skills development, local procurement and the green economy, approximately 1,500 jobs were created during the construction phase. Recently, a technical training course for 50 prospective employees at the plant, located in Karoshoek almost 30km east of Upington, were completed and further local socio-economic development was done by the EPC consortium, in the nearby communities located a stones throw away from the plant. It is estimated that Ilanga-1 will supply clean and dispatchable energy to around 100,000 homes and save 90,000 tons of CO2 per year over a period of 20 years.

Source: SENER

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Photo: SolarPOwer Europe

On 6 November 2018, at the 3rd Meeting of the European Commission’s Platform for Coal and Carbon-Intensive Regions in Transition, SolarPower Europe outlined how solar can help ensure a just energy transition in former coal regions in Europe.

James Watson, CEO of SolarPower Europe said “Across Europe former coal mines are being transformed into solar farms. This is hugely positive as solar can create new jobs, innovation and investments in these local communities, diversifying their local economies. In fact, a recent Joint Research Centre study
found solar to be particularly suitable for employing former coal workers and to help drive regional development. It is crucial that no regions or communities are left behind in the energy transition. Solar can play a massive part in ensuring a just transition for all.”

“Solar is ideal to place on former coal mine sites because the land is often no longer suitable for farming. Moreover, coal mines often leave behind large lakes with high levels of sulfate, these polluted lakes can easily be converted into floating solar farms. Solar presents a huge opportunity for new industry, jobs and as a source of clean, affordable energy in regions affected by the decline of coal. We look forward to working with the European Commission to further explore solar’s role in delivering a just transition in former coal regions,” said Watson.

Over the past few decades the production and consumption of coal in the EU has been in steady decline, due to the closure of coal mines and the phasing out of coal use for power generation. The Coal Regions in Transition Initiative is designed by the European Commission to help regions reap the benefits of the clean energy transition by bringing more focus to social fairness, better jobs, new skills, structural transformation, and financing for the real economy.

From coal mines to solar farms

In 2015, Hungarian power plant company Matrai Eromu, opened a solar power plant in Visonta in Hungary, which is situated on top of a lignite mine dump site and generates 16 megawatts of solar power.

Other 4-MW solar farm was built on the surface of a former coal mine in Saarland (Grube Warndt). The area was categorized as conversion area, which then was eligible under the German FiT at that time. This project dates back to 2012 and was developed by BayWa r.e.

Askern Solar Farm developed by Anesco comprises 18,768 solar modules equating to 5 MW. The application site is approximately 14.53 hectares in size and comprises part of the former Askern Colliery site which has a total site area of around 95 hectares

LRM was the owner of the sludge pond in Heusden-Zolder. When coal was being mined here, this was where rubble and fly ash were dumped. It was very difficult to find a suitable use for this site so LRM decided to transform the decontaminated land into a solar power plant -and so an ostensibly lost site acquired a new use.

Groupe Renault, Morbihan Energie, Les Cars Bleus and Enedis have joined forces to create FlexMob’île, an innovative programme aimed at accompanying the energy transition on the French island of Belle-Île-en-Mer. This smart electric ecosystem is founded on three core activities, namely the sharing of electric vehicles, the stationary storage of solar energy and smart charging. FlexMob’île sees Groupe Renault continue to develop the principle of smart islands, the first of which was Portugal’s Porto Santo, which has been operational since last February.

For the next 24 months, Groupe Renault and its public and private partners will be developing a smart electric ecosystem that has been conceived to reduce the island’s carbon footprint and increase its energy independence.

From 2019, Belle-Île-en-Mer residents and visitors to the island will have access to a fleet of electric cars by means of a self-service hire programme featuring Renault ZOE and Kangoo Z.E. These vehicles will be powered thanks to a network of charging stations located close to the island’s main attractions.

This new carsharing service will take advantage of surplus energy produced by solar panels installed on the roofs of the island’s main public buildings. For instance, solar panels on the school’s rooftop provide heat and lighting for classrooms during the week, while the energy produced at weekends or during school holidays will be used to charge the cars.

By promoting the use of locally-produced renewable energy, FlexMob’île will offer the island’s economic stakeholders enhanced flexibility while at the same time promising substantial savings.

For example, Groupe Renault plans to provide second-life electric car batteries for the island’s largest holiday residences facility. These batteries will be used to store energy produced during the day by solar panels for use in the evening, chiefly to heat the bungalows. This should allow the centre to extend its season which until now has been restricted by central heating costs.

Source: Groupe Renault

A new report from Bloomberg NEF shows that corporations have already purchased 7.2 GW of clean energy globally in 2018 through July, shattering the previous record of 5.4 GW for the whole of 2017. Companies have now signed long-term contracts to purchase solar and wind in 28 markets, and the number of industries involved in clean energy purchasing continues to grow.

Many corporate sustainability plans promote actions that reduce or offset emissions internally and that incentivize the construction of new clean energy projects – two complementary goals realized through corporate power purchase agreements (PPA). But activity would not approach current levels if there were no opportunity for long-term savings. PV module costs are down 84% globally since 2010, while wind turbine costs are down 32% over the same period, Bloomberg NEF found in its recently published New Energy Outlook.

Taken together with efficiency improvements that have boosted running hours at renewable plants, these cost declines have made renewables cost-competitive with wholesale power prices and more traditional sources of electricity. As a result, we’re seeing corporations locking into fixed, long-term clean energy contracts, hedging against volatile prices in the wholesale market. This is known as the virtual PPA model, and remains the most common corporate procurement mechanism.

The United States and Nordics have made up just under 80% of corporate procurement activity in 2018. In the U.S., companies have grown more comfortable with the virtual PPA model, serving as the offtaker on several projects, but smaller companies are also increasingly pooling their electricity demand together to access the economies of scale achieved through larger solar and wind projects, known as aggregation.

In the Nordics – a market with a prevalence of corporations with high electricity demand and sustainability objectives – companies are attracted to strong wind resources and the Nordpool power market, which allows for electricity to be bought, delivered and sold between Sweden and Norway. Australia and Mexico remain two nascent markets where activity is beginning to pick up, due to expensive wholesale power prices and strong renewable resources.

Technology companies are the biggest buyers of clean energy, purchasing 1.8 GW so far in 2018. Facebook has been the biggest corporate buyer this year, working with regulated utilities in the U.S. and signing a wind PPA in Norway to bring its total clean energy purchases to 1.1GW in 2018.

Materials companies trail close behind, with 1.4GW purchased in 2018. This activity comes largely off the back of aluminum manufacturers Norsk Hydro and Alcoa in the Nordics, who are using low-carbon credentials to sell aluminum at a premium in some markets.

AT&T has spearheaded a recent push from telecom companies to buy clean energy. The company has purchased 820MW of wind generating capacity in 2018 – its first renewables purchases ever. T-Mobile also announced its second clean energy PPA in 2018 and a commitment to go 100% renewable.

Bloomberg NEF forecasts that the current 140 signatories of the RE100 (a pledge to offset 100% of electricity demand with renewables) will need to purchase an additional 197TWh of clean energy in 2030 to reach their targets. Were this shortfall to be met with long-term contracts for new solar and wind projects, it would lead to an additional 100GW of build – for context, this is slightly larger than California’s entire electricity grid today.

Meanwhile, the number of companies signed up to the RE100 continues to grow. As more multi-nationals establish renewables targets, we expect corporations to have an increasing impact on power market design around the world, opening up new avenues for companies to purchase clean energy.

Source: Bloomberg NEF

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As the platform for the European solar technology community from its early days, EU PVSEC is very glad to see that solar in Europe is starting to see a new growth phase. With our upcoming 35th event taking place from 24-28. September 2018 in Brussels – the heart of the European Union – several presentations in the EU PVSEC programme’s Topic 7 on ‘PV Economics, Markets and Policies’ will look at the drivers of solar demand. This is accompanied by several side events that deal with market demand related themes as well.

As of 2018, solar power demand will grow very strong in Europe over the next few years – and as SolarPower Europe outlines in its new Global Market Outlook 2018 – 2022, there are several reasons for this next PV growth phase:

EU 2020 targets: A number of EU governments, which still have some way to go to meet their individual RES targets, have been strengthening their support for solar as they have realized that the technology is very popular and one of the lowest- cost means to increase their renewables share and reduce CO2 emissions. Germany’s new government, for example, has announced to issue additional ‘special’ tenders for both solar and wind (2 x 2 GW each) in 2019/20.

Tenders: Solar tender tools have shown to the public the low cost of solar power and have been embraced by several European countries, substituting traditional uncapped feed-in tariff schemes. Moreover, solar has proven that it can win technology-neutral tenders even against on-shore wind power when the boundary conditions are properly set. While solar was awarded nearly 3/4 of the tender volume in the second Spanish renewables tender in 2017, a pilot solar/wind tender in Germany was won 100% by solar bidders in 2018.

Self-consumption: Solar is much cheaper than retail electricity in most European markets and will quickly continue to reduce in cost, which will be a key driver for people and companies to invest in on-site power generation. Moreover, in developed European PV markets consumers are more and more starting to understand that solar often makes economic sense even without high feed-in tariffs or other subsidy programmes. The quickly falling cost of battery energy storage combined with the benefits of digital and smart energy products supports the sales case for solar, as many consumers prefer to have better control over their energy bill.

Emerging & Re-awakening Markets: The low cost of solar is attracting European countries that haven’t been very active in the field in the past, like Belarus and Russia. European solar pioneers are turning to low-cost solar again, such as Spain.

Corporate sourcing: In a number of European markets, we are now starting to see direct bilateral PPAs with solar increasingly competing with wholesale power markets. This development will be seen primarily in those European countries with the widest spreads between solar and wholesale power prices. While there has been talk about pure PPA based projects for a while in Spain, in 2018 the first are being built. However, the pipeline for these projects has quickly ballooned to over 30 GW.

Regulation: The European Commission and national governments have been addressing the needs for a flexible renewable energy system, working on a new electricity market design framework and implementing new tools and regulations to overcome barriers that have inhibited solar’s growth possibilities in recent years.

How big will be the European Solar Market?

SolarPower Europe’s Medium Scenario expects strong growth for the EU-28 until 2020, as mentioned above, driven primarily by the 2020 EU renewables targets and the recent tender announcements. The drivers in non-EU countries are support programmes as well as the low cost of solar power. For 2018, SolarPower Europe sees in Europe (including Turkey) 34% annual solar growth to 12.3 GW; for 2019, it expects demand to surge by 45% to 17.8 GW (see graph).

If Europe fully embraces the enticing business case of low-cost solar, according to SolarPower Europe’s High Scenario, the European annual solar market could reach 39.1 GW in 2022, which would be nearly twice as big as in the record year of 2011 with 22.4 GW.

However, overall clean energy investment was steady in the first half of the year, thanks to a strong second quarter for wind power investment, led by the U.S. and China

A mixed picture for global clean energy investment in 2018 is emerging, with dollar investment in solar under pressure while commitments to wind power and energy smart technologies such as electric vehicles and batteries are running above last year’s levels.

The latest authoritative figures from research company Bloomberg NEF (BNEF), show world investment in clean energy in the first six months of 2018 at $138.2 billion, down just 1% from the same period in 2017. The second quarter, from April to June, actually saw a rise year-on-year – of 8% to $76.7 billion.

A sectoral split for the first half of 2018 shows solar investment down 19% compared to the same period last year at $71.6 billion, with wind up 33% at $57.2 billion. The slippage in solar reflects two main developments – significantly lower capital costs for photovoltaic projects, and therefore fewer dollars spent per megawatt installed; and a cooling-off in China’s solar boom. These trends are set to gather pace in the second half.

On June 1, the Chinese government released a policy document restricting new solar installations that require a national subsidy, with immediate effect. BNEF expects this to lead to sharp drop in installations in China this year, compared to 2017’s spectacular record of 53 GW.

It will also mean overcapacity in solar manufacturing globally, and yet steeper price falls. Before the Chinese announcement BNEF’s team was already expecting a 27% fall in PV module prices this year. Now they have revised that to a 34% drop, to an end-2018 global average of 24.4 U.S. cents per watt.

In the first half of 2018, China invested $35.1 billion in solar, down 29% from 1H 2017. However, BNEF expects the full extent of the government-ordered cutback to become clear only from the second half of the year onwards. Its analysts see a possibility that that world solar installations in 2018 could fall for the first time on record. In 2017, they totaled 98GW, far more than for any other technology, renewable or non-renewable.

bnef_inversion_eolica

The jump in wind power investment in the first half of 2018 came thanks to a stream of large project financings from the U.S. to Taiwan and from India to the Netherlands and Norway. The headline deals included $1.5 billion for the 731.5MW Borssele 3 and 4 offshore wind farm in Dutch waters, $1 billion for the 478MW Hale County onshore wind project in Texas, and $627 million for the 120MW Formosa 1 Miaoli project (the first offshore wind array to be financed in the sea off Taiwan).

U.S. wind investment stood out in the first half of 2018, reaching $17.5 billion, up by 121% on its figure in the same period of last year. Chinese wind investment was resilient, rising 4% to $17.6 billion in 1H. BNEF sees U.S. wind investment increasing in 2018-2019 as developers rush to finish projects in time to qualify for federal tax credits.

Wind was not the only strong sector in clean energy in the first half of 2018. Equity-raising by specialist companies in energy smart technologies saw a 64% increase year-on-year, to $5.2 billion. The top deals in the second quarter were a $852.5 million initial public offering by Chinese lithium-ion battery maker Contemporary Amperex Technology, or CATL, and a $795 million Series B venture capital round by Chinese electric vehicle company Youxia Motors. Another Chinese EV specialist, Future Mobility Corporation, raised $500 million in a Series B round of its own.

The smaller sectors of clean energy – biomass and waste, small hydro, geothermal and biofuels – each saw investment in the $0.7-1.2 billion range in 1H 2018. All apart from biofuels were down compared to the same period of 2017.

The overall investment figure for clean energy globally of $138.2 billion in the first half of 2018 featured the following country-level performances:

• China investment of $58.1 billion, down 15% compared to 1H 2017
• U.S. investment of $28.8 billion, up 31%
• Europe at $16 billion, up 8%
• India at $7.4 billion, up 22%
• Australia at $4.1 billion, down 1%
• Morocco at $2.5 billion, up 12-fold
• Netherlands at $2.3 billion, up 209%
• Japan at $2.2 billion, down 67%
• Vietnam at $2 billion, up 136-fold
• Mexico at $1.9 billion, down 20%
• South Africa at $1.7 billion, up 35-fold
• Spain at $1.5 billion, up 652%
• Ukraine at $1.4 billion, up 12-fold
• Germany at $1.3 billion, down 77%
• France at $1.3 billion, down 13%
• Norway at $1.1 billion, up 231%
• Canada at $862 million, up 4%
• The U.K. at $664 million, down 51%
• Brazil at $597 million, down 81%

Source: Bloomberg NEF

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