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China EV funding tops clean energy deals in Q3

Equity raised by Chinese electric vehicle companies was the “conspicuous bright spot” in clean energy transactions in the third quarter of this year, which saw the total global deal value fall 6 per cent on 2017’s figure.

In fact, China dominated clean energy deals in July-September period, accounting for 26.7bn of a worldwide total of almost $68bn.

Figures out today from Bloomberg New Energy Finance reveal that three EV deals raised $1.9bn between them: a $1bn initial public offering by NIO; a $585m venture capital round by Guangzhou Xiaopeng Motors; and a $294m pre-IPO round by Zhejiang Dianka Automobile.

Colin McKerracher, head of advanced transport analysis at BNEF, said that there is a growing amount of money chasing China’s electric vehicle boom. “We’re seeing more companies raising funds as they look to make the jump from concept cars to high-volume manufacturing. But the market looks increasingly crowded and consolidation is likely,” he added.

Overall, the third quarter saw global clean energy investment stand at $67.8bn, down 6 per cent from the same period last year.

BNEF said today that the dip in the July-September quarter leaves investment for the year so far “running a modest 2 per cent below that in the first nine months of 2017 ” leaving open the possibility that 2018 as a whole will end up matching last year’s total, particularly if a few more multibillion-dollar offshore wind deals are concluded before Christmas”.

After the big wins for electric vehicles firms, asset finance of utility-scale renewable projects came to $49.3bn, down 15 per cent on the third quarter of 2017, while acquisitions of small-scale solar systems of less than 1MW totaled $13.5bn, up 9 per cent on a year earlier.

Public markets investment in clean energy jumped 120 per cent to $3.1 billion, helped by the NIO flotation but also by a $1.3bn convertible issue from waste-to-energy specialist China Everbright International and a $311m IPO by US fuel cell developer Bloom Energy.

The three biggest renewables asset financings were the 860 MW Triton Knoll offshore windfarm in the UK at an investment cost of $2.6bn, the Enel Green Power South Africa portfolio at $1.4bn for 706 MW, and the Guohua Dongtai offshore windfarm in China, which was an estimated $1.2bn for 30 0MW.

Europe as a whole invested $13.4bn in the third quarter, with Germany accounting for Germany $1.3bn, which was a significant 49 per cent drop on its investment at the same time in 2017. India stood at $1.5bn, up 14 per cent; Japan at $4bn, down 21 per cent; and The Netherlands was at $1.1bn, nearly a fourfold increase.

The biggest rise of all came in South Africa, which hit $2.6bn ” a 90-fold rise. The UK was down 46 per cent to $2.9bn and the US came in at $11.4bn, down 20 per cent compared to the third quarter of last year.


Tom Rowlands-Rees of Bloomberg New Energy Finance will be speaking about Future Energy Markets at European Utility Week in Vienna next month. Click here for details of the show and how to register