Clean energy investment down 10%; China leads with over 40% share

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Clean energy investment was $61.1 billion in the first quarter of 2018, down 10 percent year-on-year, says the latest report from Bloomberg New Energy Finance (BNEF).

However, developing countries accounted for more clean energy investments in the first three months of 2018, with China once again accounting for more than 40 percent of the world total.

The quarter to the end of March saw solar investment slip 19 percent to $37.4 billion, affected both by 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 percent in the last year.

According to BNEF, solar investment is likely to rise this year driven by 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 800MW Noor Midelt portfolio in Morocco, made up of a mix of PV panels and solar thermal systems with storage.

The largest conventional PV installations financed in 1Q were the 709MW NLC Tangedco portfolio in India, at an estimated $660 million, and the 404MW Acciona and Tuto Puerto Libertad project in Mexico, at $493 million.

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

Companies specializing in energy-smart technologies such as smart meters, energy storage and electric vehicles attracted $2 billion, down 8 percent. Biofuels staged a recovery, with investment up 519 percent year-on-year to $748 million, thanks to the financing of two U.S. ethanol plants.

Looking at the geographical split, China dominated yet again, investing $26 billion in clean energy in 1Q, although this was down 27 percent from a hectic first quarter last year.

The U.S. saw investment of $10.7 billion, up 16 percent, while Europe suffered a 17 percent decline to $6 billion, reflecting an absence of German or U.K. offshore wind deals. India saw investment rise 9 percent year-on-year to $3.6 billion, while Japanese outlays fell 54 percent to $1.4 billion.

In Vietnam, the financing of wind projects helped its 1Q investment tally to $1.1 billion, a quarterly record.

In Mexico, continuing activity in both solar and wind pushed up its total by 3 percent year-on-year to $1.3 billion.

The financial close on a 91MW geothermal project in Indonesia helped that country’s tally to $757 million in 1Q 2018.

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

Public markets investment in specialist clean energy companies plunged 75 percent to $509 million, the lowest in any quarter for two years. Venture capital and private equity investment was much more impressive, climbing 65 percent to $2.4 billion, the highest since 3Q 2016.

The VC/PE deals in the latest quarter were led by $475 million and $348 million Series B rounds for Chinese electric car companies Beijing CHJ Information Technology and Guangzhou Xiaopeng Motors, and a $224 million private equity expansion capital round for Enerkem, the Canadian biofuel technology developer.

editor@greentechlead.com