Developing markets take prominent spot in Q1 clean energy investment

The first quarter (Q1) of 2018 saw global clean energy investment decrease to USD 61.1 billion (EUR 49.4bn) as solar investments dipped, but was marked by prominent outgrowth in development markets, with several “eye-catching projects” reaching financial close there.

The January-March total was 10% lower in annual terms, show figures from Bloomberg New Energy Finance (BNEF) released on Wednesday. “The global first quarter figures are the lowest for any quarter since 3Q 2016, but it’s too early to predict a fall in annual investment this year,” said BNEF analyst Abraham Louw.

The weaker Q1 figures included a 19% year-on-year drop in solar investment to USD 37.4 billion due to decreased activity in some markets and lower prices of photovoltaic (PV) systems. According to BNEF, the benchmark global dollar capital costs per MW for utility-scale solar slipped by 7% in the past year and also contributed to the overall decline.

The quarter saw a rebound in investment in developing countries as several renewable energy projects in Morocco, Vietnam, Indonesia and Mexico reached financial close. The biggest one was the 800-MW Noor Midelt solar project in Morocco, estimated at around USD 2.4 billion.

Meanwhile, global investment in wind rose by 10% in the three months to USD 18.9 billion.

Investment in the biomass and waste-to-energy sectors fell by 29% to USD 679 million, small hydropower of up to 50 MW lured USD 538 million, down 32%, while spending on geothermal projects increased by 39% to USD 1 billion. Energy-smart technologies, including smart meters, energy storage and electric vehicles, got USD 2 billion in investment, down 8% on the year. Investment in biofuels surged by 519% to USD 748 million.

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Geographically, China was the top market in Q1, with clean energy investment of USD 26 billion. Thanks to the ongoing solar boom there, the Asian country accounted for over 40% of the overall investment, triggering hopes that global PV capacity additions will surpass last year’s record of 98 GW, noted Jenny Chase, head of solar for BNEF.

The US spent USD 10.7 billion, 16% more than a year ago, while investment in Europe fell by 17% to USD 6 billion as no German or UK offshore wind deals were registered in the period. Investment in India rose by 9% to USD 3.6 billion.

Asset finance of utility-scale renewable energy projects was down 16% to USD 44.3 billion.

Investment in small-scale solar projects of less than 1 MW improved by 16% to 14.3 billion.

Public markets investment in clean energy slumped by 75% to USD 509 million, whereas venture capital (VC) and private equity (PE) funding of clean energy companies jumped by 65% to record USD 2.4 billion.

(USD 1.0 = EUR 0.808)

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