Turn around in investments in clean energy

Pilita Clark writes in the Financial Times about the growing global interest in clean energy after a lengthy period of decline.


Investment in clean energy rising after two years of decline

Investor interest in clean energy is starting to rise around the world after two years of decline largely thanks to growth in China and Japan.

But concern about the ratcheting back of renewable energy subsidies in Europe led investment there to sink to the lowest level in eight years, new figures show, notably in the UK and Italy where spending in the third quarter sank to less than half what it was in the same period one year ago.

Globally, just over $175bn was poured into solar plants, wind farms and other forms of green power in the first nine months of 2014, according to Bloomberg New Energy Finance, a research group.

That is 16 per cent more than in same period last year, with China’s solar boom accounting for the biggest single contribution to the increase.

The global rise in investment will be welcomed by the clean energy industry which has been buffeted by moves by governments in many countries to rein in subsidies.

“It is heartening to see investment heading for an up-year in 2014 after two down-years, thanks in large part to the greatly enhanced competitiveness of solar, and to some extent wind,” said Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance.

“However, there is no room for complacency because clean energy investment of between $200bn and $300bn a year is not large enough to herald the rapid transformation of the power system that experts say is required if the world is to see a peak in CO2 emissions around 2020. There is still too much policy instability holding back investor confidence.”

China set a new record in the third quarter of this year by investing $12bn in solar power, a big leap from the $7.5bn committed in the same period last year.

The large number of utility-scale photovoltaic projects being hooked up to China’s main transmission grid means its total solar installations are expected to reach about 14 gigawatts of generating capacity by the end of this year, or nearly a third of the world’s total.

Japanese clean energy investment in the third quarter reached $8.6bn, up 17 per cent compared with the same period last year, again because of the growth of solar plants.

In Europe, once a powerhouse of green energy, just $8.8bn was committed in the third quarter, down from $12.1bn one year ago. UK and Italian investment fell 74 per cent.

Global clean energy investment soared from $60bn in 2004 to $205bn in 2008, then hit a plateau during the financial crisis before rising to a peak of $317bn in 2011, the Bloomberg New Energy Finance figures show.

But it then sagged to $285bn in 2012 and $251bn in 2013, partly because of uncertainty about subsidies in Europe.

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