Global renewables spending climbs in 2019 amid offshore wind uptake

Renewables investment in the US hit a new high in 2019, while China, the world’s largest investor in the sector, reached the lowest level in five years in spite of the push made by offshore wind developers ahead of the expiry of a major support scheme, BloombergNEF (BNEF) said.

In its latest report dedicated to clean energy investment, published on Thursday, the analyst said that the global renewables industry spent USD 282.2 billion (EUR 253.4bn) in 2019, or 1% more than a year back, reflecting the falling capital costs in wind and solar. Wind was a major driver, with investments leading the way with a total of USD 138.2 billion, up 6% year-on-year, while investment in the solar sector declined by 3% to USD 131.1 billion.

While keeping the crown as the top country in terms of renewables spending, China witnessed an 8% year-on-year drop in investment to USD 83.4 billion, the lowest since 2013. More than half of this was in the wind segment, USD 55 billion, which climbed by 10% as developers dashed to beat a scheduled expiry of that country’s feed-in tariff (FiT) programme. Solar investment, meanwhile, marked a 33% drop to USD 25.7 billion.

The US, the second largest investor in renewables, set a new record by spending USD 55.5 billion, up 28% on the year, as wind and solar developers rushed to beat deadlines for the full value of federal incentives that are scheduled for scale-back in 2020.

“It’s notable that in this third year of the Trump presidency, which has not been particularly supportive of renewables, US clean energy investment set a new record by a country mile,” said Ethan Zindler, head of Americas for BNEF.

Technology-wise, BNEF highlighted key offshore wind projects that reached financial close in the last trimester of 2019 -- the 432-MW Neart na Gaoithe off Scotland (USD 3.4 billion), the 376-MW Formosa II in Taiwan (USD 2 billion) and the 500-MW Fuzhou Changle C in the East China Sea (USD 1.5 billion). The increased financing activity in this quarter helped bring the overall offshore wind investment to USD 29.9 billion, up 19% in annual terms.

“We expect the sector’s global momentum to continue in 2020, with the focus on gigawatt-scale projects in the British North Sea and the first commercial arrays off the US East Coast,” commented Tom Harries, head of wind research at BNEF.

INVESTMENT CATEGORY

According to BNEF’s figures, global clean energy spending rose to USD 363.3 billion in 2019 from USD 362.5 billion in 2018.

Public markets investment in specialist clean energy companies declined by 13% to USD 9.3 billion, while venture capital (VC) and private equity (PE) investors spent USD 10.5 billion in clean energy, or 6% more than a year back. The most prominent transactions in both categories were made by electric vehicle manufacturers Tesla (USD 862.5 million) and Rivian Automotive (USD 1.3 billion).

Corporate and government research and development in wider-definition clean energy stood at USD 45.7 billion, inching up 1% on the year.

(USD 1.0 = EUR 0.898)

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