Slowdown in China drags down H1 global clean energy spending 14% Y/Y

Global investment in renewable energy slipped by 14% on the year to USD 117.6 billion (EUR 104.3bn) in the first half of 2019 as spending in China was curbed by regulatory issues.

According to data by BloombergNEF (BNEF) released on Tuesday, China, the world’s largest market, saw renewable energy investment shrink by 39% in annual terms to USD 28.8 billion. This total was the lowest half-year figure for the country since 2013 and was a result of China’s transition from a feed-in-tariff (FiT) regime to auction mechanism for wind and solar.

Pointing out that the figures likely “overstate the severity” of the market condition in China, Justin Wu, head of Asia-Pacific for BNEF, said that an ongoing auction for solar power in China is expected to spur financing in the sector. Several big deals on the offshore wind market are expected in the second half of 2019, as well, he added.

First-half clean energy investment in the US also experienced a decline, falling 6% year-on-year to USD 23.6 billion.

Clean energy spending in Europe decreased by 4% to USD 22.2 billion. Of the total, USD 3.7 billion was spent in Spain, which enjoyed a 235% boost, while the UK and the Netherlands accounted for USD 2.5 billion and USD 2.2 billion, respectively.

The table below shows clean energy investments in major markets, as given by BNEF.

According to BNEF, a highlight in the period was the announced USD-4.2-billion financing of the 950-MW Noor Energy 1 project in Dubai, which combines solar photovoltaic (PV) and concentrated solar power (CSP) technologies.

In Taiwan, another “relatively new market,” financial close was achieved on Wpd AG’s 640-MW Yunlin offshore wind project. Denmark’s Ørsted A/S (CPH:ORSTED), in turn, took a final investment decision (FID) on the USD-5.7-billion Greater Changhua 1 and 2a offshore wind projects totalling 900 MW.

INVESTMENT CATEGORY

Among the three most prominent transactions in January-June was a deal in which Swedish battery cell maker Northvolt AB raised USD 1 billion in equity capital from investors led by automotive group Volkswagen AG (ETR:VOW3) and Goldman Sachs (NYSE:GS).

Asset finance of utility-scale renewable energy projects contracted by 24% on the year to USD 85.6 billion, mainly dragged down by the decreased spending in China.

Investment in small-scale solar projects of less than 1 MW climbed by 32% to USD 23.7 billion.

Public markets investment in specialist clean energy companies, meanwhile, grew by 37% to USD 5.6 billion, while venture capital (VC) and private equity (PE) funding of clean energy companies was down 2% to USD 4.7 billion.

(USD 1.0 = EUR 0.887)

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