Bloomberg New Energy Finance

As the oil price crumbles, renewables march on

Photo credit: Bloomberg New Energy Finance (BNEF)

By Anders Lorenzen

Solar and wind attracted a record amount of investment in 2015 while fossil fuel projects were cancelled due to the low oil price, new analysis finds.
In 2015, renewables attracted a record amount of $329.3 billions worth of investments. While ironically a staggering $380 billion of investments in oil have been delayed due to the low oil price. This shows that the real victim of lower oil prices is the oil industry itself, and not the renewable energy sector.
The low oil price is not impacting clean energy investments
Some claim that the low oil price could hurt investments in renewables and that the switch to cleaner vehicles would slow down as the price of petrol drops. But investors are becoming more worried about investing in a volatile oil market struggling with the low oil price. Last week the oil major BP confirmed that they are to cut 4,000 jobs. And if the price stays low, which experts predict, more jobs would be sure to go.
Renewables do not seem to have such problems. Their main challenge is the changing of government policies in some countries. But on a global level, investor confidence remains strong and is being led by developing countries such as China and India with their aggressive renewable energy plans. And on top of that, the market in Africa is really starting to open up.

Graph showing global clean energy investments 2014-15, $bn. Source: Bloomberg Clean Energy Finance (BNEF).


Impressive 2015 clean energy growth figures
The impressive renewable energy investment figures were released by the clean energy analysts Bloomberg New Energy Finance (BNEF). They found that clean energy investments had increased by 4% compared to 2014 figures. Their research found that the increase in new emerging markets,  as well as the continuing decline in the cost of renewable, was responsible.
The figures showed an increased investor confidence in Latin America, where both Mexico ($4.2 billion) and Chile ($3.5 billion) are committed to funding clean energy projects up with 114% & 157% retrospectively. And in Africa, South Africa ($4.5 billion) is also starting to emerge from the shadows, as investments increased by a staggering 329%. Undoubtedly, this figure demonstrates the move away from a heavy reliance on coal to cleaner energy sources.
But the real sunshine story in Africa is to be found in Morocco where investments increased from nearly zero in 2014 to $2 billion in 2015. This growth is coming mainly from two projects, the NOORo solar thermal power plant and the Jbel Sendoug Wind Farm, Luke Mills from BNEF told me.
China leads the pack
But of course, China was again the largest clean energy investor, increasing investments by 17%, to a staggering $110.5 billion in 2015. And the world’s largest economy, US, recorded just over half of that, £56billion, which represented an increase of 8%.
Due to 2015`s  impressive investment figures, 122 Gigawatts of wind and solar power were added to grids across the world and represented around 50% of all new energy generation capacity. Analysts also found that the low oil price had no impact on clean energy investments.
But the disappointing investment trends in Europe continued, which some might argue are due to changes in government policies. Across Europe investment fell by 18% to $58.5 billion, the lowest since 2006.
Strong clean energy outlook
The founder of BNEF, Michael Liebreich, responded to the findings stating: “these figures are a stunning riposte to all those who expected clean energy investment to stall on falling oil and gas prices. They highlight the improving cost-competitiveness of solar and wind power, driven in part by the move by many countries to reverse-auction new capacity rather than providing advantageous tariffs, a shift that has put producers under continuing price pressure.”
With the Paris Agreement adopted last month at COP21, it is anticipated that clean energy investor confidence will remain strong. It is also likely that the lifting of sanctions on Cuba and Iran could have a positive impact on clean energy investments. Already the Danish government has stated that they expect to increase their clean energy exports to Iran significantly as a result of the lifting of sanctions.
With Morocco hosting the COP22 later this year, their impressive clean energy investments could continue. Though the second and third phases of NOORo are still to be implemented and securing financing is still a major headache for that African country, BNEF`s Luke Mills told me “there is no denying however that the outlook for Morocco is one of the more exciting within the Middle East and Africa regions”.

5 replies »

  1. It's NOT “clean” or “green” to industrialize huge swaths of land (and ocean) and pretend that growing visual impact is trivial or non-existent. A common excuse is to claim that wind turbines only affect the land where the towers touch the earth, which is the same lie used to push ANWR drilling (see “2,000 acres myth”).

    The physically biggest invasion of landscapes this century is being done in the name of wind power and solar arrays. True environmentalists should recoil at the loss of priceless scenery and growing bird/bat deaths. You can't casually compare massive new blight to existing coal mines or drilling sites and hope nobody notices the new invaders. It's all cumulative and it's industrializing the last remnants of nature. How it came to be “green” to support an expanding network of giant towers, access roads and transmission lines is beyond comprehension. These are just airborne dams that don't even create natural looking features like hydro power. We do know what kind of green motivate$ a lot of people, and that's probably what lies behind the “clean energy” rhetoric. You invariably find that wind pushers are profiting from their spiel.

    Rooftop solar is the best hope for not ruining what remains of rural & wild scenery. The landscape and seascape are integral to the total environment and shouldn't be sacrificed for this intermittent, grotesque power source.


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