Clean energy investments across the globe rose by 3% in 2017, as the fall in capital costs for solar technology led to more investment in China, according to the latest report by Bloomberg New Energy Finance (BNEF).
BNEF said the amount pumped into clean energy rose to $333.5bn (€272bn) last year from the previous year’s $324.6bn.
BNEF’s clean energy covers renewable energy but excludes hydro-electric projects of more than 50MW. Large hydro is estimated to add around $40bn to 50bn in 2017, it said.
“An extraordinary boom in photovoltaic installations made 2017 a record year for China’s investment in clean energy,” the report said.
Worldwide solar investment rose 18% in 2017 to $160.8bn from 2016, with around $86.5bn of the amount spent in China, the report showed.
In 2017, Chinese investment in all the clean energy technologies rose 24% to $132.6bn from 2016.
Jon Moore, chief executive of BNEF, said: “The 2017 total is all the more remarkable when you consider that capital costs for the leading technology – solar – continue to fall sharply.
“Typical utility-scale PV systems were about 25% cheaper per megawatt last year than they were two years earlier.”
The US was second at $56.9bn, up 1% on 2016 “despite the less friendly tone towards renewables adopted by the Trump administration,” the report said.
Large wind and solar project financings pushed Australia up 150% to a record $9bn and the UK saw a 56% drop to $10.3bn.
Europe, a region which called for the promotion of green investments, recorded a 26% drop in 2017 to $57.4bn from 2016.
Last October, a resolution passed by the European Parliament states that pension funds should commit to divesting from fossil fuels. The resolution called for the phasing out of export credits for fossil fuel investments and the promotion of green investment the issuing of green bonds.
BNEF said the two biggest solar projects last year were both in the United Arab Emirates.
Wind was the second-biggest sector for investment in 2017, at $107.2bn, which fell 12% from 2016.
Major deals include American Electric Power’s plan to back the 2GW Oklahoma Wind Catcher project in the US, at $2.9bn and Danish energy firm Ørsted agreeing on the 1.4GW Hornsea 2 project in the UK North Sea, at an estimated $4.8bn.
BNEF’s report showed that equity-raising by specialist clean energy companies on public markets was down 26% in 2017 to $8.7bn.
It revealed that venture capital and private equity investment in clean energy also fell 38% in 2017 to $4.1bn when compared with 2016.
The public market investor mergers and acquisition deals fell to 8% to $7.4bn, whereas private equity buy-outs “reached an all-time high of $15.8bn, up sixfold on the previous year.”
The largest acquisition transaction of the year was the purchase of a 51% stake in TerraForm Power by Brookfield Asset Management for $4.7bn.
Abraham Louw, an analyst at BNEF’s clean energy economics, said: “It is notable that acquisition activity in clean energy has been in excess of $100bn in each of the last three years.
“The fact that generating assets, in particular, are in growing demand from buyers is a sign of a maturing sector.”
