Market volatility hits clean energy investment

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With a strong dollar and the share price volatility afflicting China the headline reasons cited by Bloomberg New Energy Finance (BNEF) for a fall in clean energy funding last quarter, there was some consolation amid the gloom for renewables supporters.

With venture capital funding plummeting 31 per cent on the first three months of the year – and a huge 60 per cent compared to April-June last year – BNEF clean energy economics analyst Luke Mills said that type of financing for green power will inevitably dwindle now PV and wind power have become mature technologies.

Entering the mainstream of energy production may not help the current investment picture but is another indication one of the long-held dreams of environmentalists has been achieved.

So much for the idealism. Meanwhile the $53 billion BNEF estimates was invested in clean energy in the second quarter of the year was down 3 per cent on the $54.4 billion committed from January to March, and 28 per cent lower than a bumper second quarter last year, which saw $76.3 billion ploughed into non-fossil fuel generation.

But there were reasons to be cheerful, with investment in small-scale renewables, chiefly residential solar, up 29 per cent on a year-to-year comparison, to $20.4 billion, as the U.S., Japan and China look to the rooftops.

That compares with a falls of 41 per cent, year-on-year, for both utility scale projects, to $30.9 billion, and stock market investments, to $2.9 billion.

China invested $6.4 billion of its total $15.5 billion clean energy cash in solar with a third of that figure thrown at rooftops, as price falls made household systems more competitive.

US the number two market

The second biggest clean energy market was the U.S., with $9.4 billion worth of investments, down 4 per cent from Q1 and 21 per cent year on year. Japan‘s figure of $8.1 billion – driven by a significant solar rooftop market – was down 12 per cent and 10 per cent, quarter-on-quarter and year-on-year, respectively, and number four market Germany, with $3.8 billion, was down 10 per cent on an annual comparison despite the second quarter having seen an 80 per cent leap in investment compared with the first three months of 2015.

The $2.7 billion invested in UK clean energy was down 9 per cent on Q1, and flat year-on-year, with Chile boasting the only wholly positive comparisons as its $1.3 billion of investment was up 56 per cent on the previous quarter and 40 per cent annually.

Those figures do not strip out solar and the rise of wind as a rival was indicated by the fact only one of the top four deals – the $744 million, 294 MW Silver State PV Plant, in Nevada – was solar, with the rest offshore wind projects.

Another crumb of comfort came with BNEF updating its investment figures for the last four years, a development which will harshen the comparative figures, although not enough to mask the effects of China’s rollercoaster stock exchanges.