Cash & Liquidity ManagementInvestment & FundingCapital MarketsChina and the US Drive Renewable Energy Investment

China and the US Drive Renewable Energy Investment

Declining oil prices during 2014 appear not to have reduced enthusiasm for cleaner energy, with global investment totalling US$310bn, a 16% increase over 2013 according to data published by Bloomberg New Energy Finance.

China led the surge, with a 32% increase to US$89.5bn, while US investment grew 8% to US$51.8bn – which was up on 2013 but still below the previous year. Japan, Canada and Brazil also recorded strong growth.

By contrast the European market was relatively sluggish, edging up just 1% to US$66bn despite several major offshore wind deals. In Australia, where developers are awaiting a government review of the renewable energy target (RET), investment fell by 35% to US$3.7bn, the lowest level since 2009.

“These figures have exceeded our expectations,” said Michael Liebreich, chairman of Bloomberg New Energy Finance. “Healthy investment in clean energy may surprise some commentators, who have been predicting trouble for renewables as a result of the oil price collapse since last summer.

“Our answer is that 2014 was too early to see any noticeable effect on investment, and anyway the impact of cheaper crude will be felt much more in road transport than in electricity generation.”

Solar energy, where costs have been reduced over the past five years, made up nearly half the total. Major projects included the 250 megawatts (MW) Setouchi Mega PV project in Japan and the Xina Solar One 100MW solar thermal plant in South Africa, each costing around US$1bn.

Rooftop solar also boomed, with investment in power generation projects of less than 1MW increasing by a third to US$73.5bn.

A separate analysis found US$38 billion worth of so-called ‘green bonds’ were issued in 2014, more than double the previous year’s total. These investments offer fixed annual returns and fund energy efficiency, public transport and other climate-friendly projects.

Growth was driven by a fivefold increase in corporate bonds, with energy companies, consumer goods firms and banks responding to high demand. The international, non-profit body
Climate Bonds Initiative
predicts a further US$100bn will be issued in 2015, as the market scales up.

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