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Global clean energy investment: US$145bn

China’s investment in wind energy last year kept the world’s overall investment in clean energy to 6.5% below the 2008 record, despite the worst recession for 60 years.

Asia

Soaring investment in Asia for clean energy pushed the continent beyond the total of the Americas last year, reports Bloomberg New Energy Finance. Although total new investment slipped 6.5% from the peak of US$155 billionn in 2008, it declined by less than had appeared likely, the report explains.

The key reason for this resilience was the buoyant investment in Asia, particularly in the wind energy sector in China.

Last year, for the first time, total new financial investment in clean energy in Asia-Oceania reached US$37.3bn, ahead of the Americas at US$32bn.

Europe, Middle East and Africa continued to lead the world with US$42.2bn of clean energy investment but, while new financial investment fell 14% in the EMEA region in 2009, and dropped 25% in the Americas, it increased by 25% in Asia-Oceania and was driven mainly by the wind energy sector.

Type of clean energy investment

The largest single component of this US$145bn of new clean energy investment was US$92bn of asset finance, although this was down 5% from 2008 levels.

Among the renewable energy sectors that received asset financing last year, 83 deals in wind energy (including the 1 GW London Array) received US$13.9bn; 29 deals in biomass received US$3.3bn; 35 deals in solar were US$1.6bn; 11 deals in small hydro received US$1.1bn; three deals in geothermal received US$0.5bn and three deals in marine energy received US$0.1bn.

Clean energy investment via public markets totaled US$13bn, also down 5% from 2008, while investment in privately-owned companies by venture capital and private equity funds saw a larger decrease, with only US$6.6bn invested, down 44% from the previous year.

The balance of new funding in clean energy was invested by governments (US$11bn), companies (US$9bn) and property owners (US$20bn) which includes residential small-scale projects such as rooftop solar panels. Both government RD&D and small-scale clean energy projects increased in 2009, helping to offset the effect of the recession on the sector.

Europe and Americas hit by recession

Clean energy investment in both Europe and the Americas was adversely affected by the financial crisis, as commercial banks reduced the credit for renewable energy projects, leaving public sector institutions (such as the European Investment Bank) to make up the slack. Initial public offerings were scarce in the first half of 2009 before bouncing back, while venture capital investors slowed their strong investments in 2008 and have remained cautious since, according to the report.

“The 2009 global investment numbers are higher than we expected even just a few weeks ago,” explains Michael Liebreich of Bloomberg New Energy Finance. “Clean energy remains a sector with strong long-term growth fundamentals even during hard economic times, and Asia has arrived not just as a big consumer of energy, but also as a heavyweight investor in clean energy capacity.”

China

Clean energy investment in China surged last year, including a US$2.6bn IPO in December by wind developer China Longyuan Power. Asset finance was also active, with China investing in large-scale wind and solar projects sited far from population centres. Overall, China’s asset finance investment in new wind energy last year was US$21.8bn, up 27%, while investment in solar jumped 97% to US$1.9bn.

“China‘s focus until recently was mainly on building its domestic manufacturing base, particularly in wind and solar photovoltaics,” says Liebreich. “What changed in 2009 was the focus on scaling up Chinese generation capacity to meet demand, which has clearly been identified as one of the ways it will meet its new commitment to bring down its emissions as a proportion of GDP.”

Global clean energy investment

New global clean energy investment in the fourth quarter of 2009 was US$27bn, down from US$32.9bn in Q3 but slightly up from the US$26.3bn in Q4 2008. An unexpected development was the rebound in new public market fund-raisings, with US$4.9bn raised in Q4 2009 and US$4.6bn in Q3, compared with US$1.2bn in Q4 2008 and almost nothing in Q1 2009.

Bloomberg New Energy Finance

Bloomberg New Energy Finance is an independent provider of research in renewable energy, carbon markets, energy efficiency, biofuels, carbon capture and storage, and nuclear power. Bloomberg purchased New Energy Finance in December 2009, and renamed the company Bloomberg New Energy Finance.

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Energy efficiency  •  Energy infrastructure  •  Policy, investment and markets  •  Solar electricity  •  Wind power

 

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