H1 clean energy investment drops 23% y/y to USD 116.4bn

Global clean energy investment in the first half (H1) of 2016 stood at USD 116.4 billion (EUR 104.6bn), down by 23% on a year ago due to a slowdown in all major markets but Europe and Brazil, and cheaper solar.

The latest report by Bloomberg New Energy Finance (BNEF) shows a 4% increase in clean energy investment in Europe to USD 33.5 billion, and a 36% rise in Brazil to USD 3.7 billion. However, there was a 34% year-on-year drop in China to USD 33.7 billion as a result of weak electricity demand and policy changes. In the US investments inched down by 5% to USD 23.1 billion, while Asia Pacific experienced a 47% fall to USD 12.1 billion.

BNEF pointed out that one of the factors contributing to the drop in H1 2016 is the falling cost of solar energy. Photovoltaic (PV) panels and project construction have become cheaper in many markets. There is also a shift from the more-expensive small-scale projects to utility-scale projects.

“It is now looking almost certain that the global investment total for this year will fail to match 2015’s runaway record,” said Michael Liebreich, chairman of the advisory board at BNEF. Investment in 2015 was actually higher than previously reported, the independent research house said, revising its estimate up to USD 348.5 billion.

In H1 2016 the main category of investment, as usual, was asset finance of renewable energy projects with USD 92 billion recorded globally, down 19% on the year. The biggest deal in the second quarter was the USD-3.9-billion final investment decision on the 588-MW Beatrice offshore wind project in the UK.

Public markets investment in clean energy companies plunged by 56% to USD 3.8 billion in the first half of 2016. The biggest transaction in that category in the second quarter was a USD-1.7-billion secondary share issue by Tesla Motors (NASDAQ:TSLA).

Clean energy venture capital and private equity investments inched up by 2% to USD 2.8 billion. The USD-230-million capital raise by India’s Greenko Energy Holdings was the top deal for the second quarter.

(USD 1 = EUR 0.899)

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