China cements themselves as global leader on clean energy

Tour of BYD Co. Headquarters and Facilities

A worker walks past a rooftop solar farm at the BYD Co. headquarters in Shenzhen, China. Photo credit: Qilai Shen / Bloomberg.

By Anders Lorenzen

New data from Bloomberg New Energy Finance (BNEF) states that primarily due to China, global investments in clean energy sources continue to grow. BNEF said that across the world clean energy investment reached $333.5 billion in 2017, up 3% from 2016 and the second highest annual figure ever, taking cumulative investment since 2010 to a staggering $2.5 trillion.

China, whilst having the world’s second-largest economy and the largest clean energy market, had a record year of investments thanks to an extraordinary boom in solar PV installations.

This overshadowed somewhat negative developments elsewhere, such as declining clean energy investment in Japan, the UK and Germany, and compounded positives elsewhere, including increased investment in Australia, Brazil and Mexico. However, these new figures are still 7% short of the $360.3 billion record reached in 2015.

Global new investment in clean energy by sector, $ billion

 

Global new investment in clean energy by sector.png

Credit: Bloomberg New Energy Finance. Clean energy covers renewable energy excluding large hydro, plus energy-smart technologies such as efficiency, demand response, storage and electric vehicles.

 

Solar the leader

However, it is important to note that these data reflect only investment sums and not energy capacity added. Jon Moore, chief executive of BNEF said that these numbers are even more impressive taking into consideration the rapidly falling cost of many clean energy technologies, in particular solar. He said: “The 2017 total is all the more remarkable when you consider that capital costs for the leading technology – solar – continue to fall sharply. Typical utility-scale PV systems were about 25% cheaper per megawatt last year than they were two years earlier.”

The report also showed that solar investments continue to be the most rapidly growing of the clean energy technologies, accounting for nearly half (48%) at $160.8 billion – this is up a whole 18% on the previous year and has happened despite the mentioned cost reductions.

The two biggest solar projects to get the go-ahead last year were both in the United Arab Emirates: the 1.2GW Marubeni JinkoSolar and Adwea Sweihan plant, costing $899 million, and the 800MW Sheikh Mohammed Bin Rashid Al Maktoum III installation, at an estimated $968 million.

And the rest

The wind power sector stayed somewhat steady and accounted for nearly a third of all investments, amounting to $107.2 billion. However, this was down 12% compared to 2016, though on the plus side there were record-breaking projects financed both offshore and onshore.

In the hugely expanding and innovative field of offshore wind, Ørsted, who in 2017 changed its name from DONG to make it 100% focusing on renewables said it had reached a ‘final investment decision’ on the 1.4GW Hornsea 2 project in the U.K. North Sea, at an estimated $4.8 billion.

Energy-smart technologies was the third-biggest sector, which relates to the asset financing of smart meters and battery storage, equity-raising by specialist companies in the smart grid, efficiency, storage and electric vehicles – and attracted investments of $48.8 billion in 2017, this was up 7% from the previous year, and is the highest it has ever reached.

Far behind we had the remaining sectors which had all seen steady declines: biomass and waste-to-energy down 36% at $4.7 billion, biofuels down 3% at $2 billion, small hydro 14% lower at $3.4 billion, low-carbon services 4% down at $4.8 billion, geothermal down 34% at $1.6 billion, and marine energy down 14% at just $156 million.

 

Global new investment in clean energy by countries

Credit: Bloomberg New Energy Finance.

 

China continues to set the trend

When it comes to solar investments China is storming ahead of everyone else. Just over half of the world total, or $86.5 billion, was spent in China. This was 58% higher than in 2016, with an estimated 53GW of PV capacity installed – up from 30GW in 2016.

Justin Wu, head of Asia-Pacific for BNEF, offered some insight: “The cost of solar continues to fall in China, and more projects are being deployed on rooftops, in industrial parks or at other distributed locales. These systems are not limited by the government quota. Large energy consumers in China are now installing solar panels to meet their own demand, with a minimal premium subsidy.”

There were also 13 Chinese offshore wind projects financed last year, with a total capacity of 3.7GW, and estimated investments of $10.8 billion.

Overall, Chinese investments in all new clean energy technologies were up 24% at $132.6 billion, setting a new record high in the country.

Despite Trump clean energy momentum continues in the US

The US still remains a key player in clean energy investment and remains the second biggest market globally. And at $56.9 billion investments increased by 1%, in spite of the aggression towards renewables by the Trump administration.

Onshore, American Electric Power said it would back the 2GW Oklahoma Wind Catcher project in the US, at $2.9 billion excluding transmission.

And outside the US large wind and solar project financings pushed investments in Australia up 150% to a record $9 billion, and Mexico saw rises of 516% to $6.2 billion. On the downside, Japan saw investments decline by 16% in 2017, to $23.4 billion, while Germany slipped 26% to $14.6 billion and the U.K. 56% to $10.3 billion in the face of changes in policy support. Europe as a whole invested $57.4 billion, down 26% year-on-year.

The clean energy investment total excludes hydro-electric projects of more than 50MW.

 

 

 

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