Clean energy investment hit $61bn in Q1

Global clean energy investment in the first quarter of this year hit $61.1bn, with China accounting for more than 40 per cent of the world total.

And developing countries played a large role in the total investment, with major projects reaching financial close in Morocco, Vietnam, Indonesia and Mexico.Clean energy investment hit $61bn in Q1

The latest quarterly figures from Bloomberg New Energy Finance (BNEF) show that the $61bn total was down 10 per cent on the same period a year earlier.

The quarter to the end of March saw solar investment slip 19 per cent to $37.4bn, which BNEF was due to weaker activity in some markets and by lower unit prices for photovoltaic systems.

BNEF estimates that benchmark global dollar capital costs per MW for utility-scale solar PV have fallen 7 per cent in the last year.

Jenny Chase, head of solar for BNEF, said: “We expect the world to install even more solar this year than last year’s record of 98 GW. Two of the main drivers are the ongoing boom in China for both utility-scale and smaller, local PV systems, and the financing of very large solar parks in other developing countries as cost-competitiveness continues to improve.”

The biggest solar project reaching financial close in the early months of 2018 was the 800 MW Noor Midelt portfolio in Morocco, made up of a mix of PV panels and solar thermal systems with storage. Development banks including KfW of Germany and the European Investment Bank have agreed to fund the complex, which is likely to cost around $2.4bn.

The largest conventional PV installations financed in the first quarter were the 709 MW NLC Tangedco portfolio in India, at an estimated $660m, and the 404 MW Acciona and Tuto Puerto Libertad project in Mexico, at $493m.

Wind investment showed a rise of 10 per cent in the first quarter to $18.9bn, while biomass and waste-to-energy declined 29 per cent to $679m. Geothermal rose 39 per cent to $1bn and small hydro-electric projects of less than 50 MW attracted $538m, down 32 per cent.

Companies specializing in energy-smart technologies such as smart meters, energy storage and electric vehicles attracted $2bn, down 8 per cent.

Biofuels staged a recovery, with investment up 519 per cent year-on-year to $748m, thanks to the financing of two US ethanol plants.

China dominated yet again, investing $26bn in clean energy in the first quarter, although this was down 27 per cent from a hectic first quarter last year.

The US saw investment of $10.7bn, up 16 per cent, while Europe suffered a 17 per cent decline to $6bn, reflecting an absence of German or UK offshore wind deals.

India saw investment rise 9 per cent year-on-year to $3.6bn, while Japanese outlays fell 54 per cent to $1.4bn.Clean energy investment hit $61bn in Q1

BNEF highlighted three countries in particular: Vietnam, where the financing of wind projects helped its first quarter investment tally to $1.1bn, a quarterly record; Mexico, where continuing activity in both solar and wind pushed up its total by 3 per cent year-on-year to $1.3bn; and the financial close on a 91 MW geothermal project in Indonesia helped that country’s tally to $757 million in 1Q 2018.

Abraham Louw, clean energy investment analyst at BNEF, said: “The global first quarter figures are the lowest for any quarter since 3Q 2016, but it’s too early to predict a fall in annual investment this year. For instance, we expect to see the financing of a number of big-ticket offshore wind projects in UK, Belgian, Dutch and Danish waters during the months ahead.”

Breaking investment down by type, BNEF said the first quarter saw a 16 per cent fall in the asset finance of utility-scale renewable energy projects worldwide, to $44.3bn, but there was a 16 per cent rise to $14.3bn in the funding of small solar systems of less than 1 MW.

Public markets investment in specialist clean energy companies plunged 75 per cent to $509m, the lowest in any quarter for two years. Venture capital and private equity investment was much more impressive, climbing 65 per cent to $2.4bn, its highest since the third quarter of 2016.

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