Climate

Renewable Energy Investment Surges, Nearly Surpassing 2011 High-Water Mark

CREDIT: shutterstock

Clean energy investment rose for the first time in three years in 2014, totaling $310 billion and nearly surpassing the all-time high set in 2011 of $318 billion. A report compiled by Bloomberg New Energy Finance found that investment in wind, solar, biofuels and other low-carbon energy technologies overcame the headwinds of dropping oil prices and regulatory indecision to grow 16 percent over the course of the year.

“Healthy investment in clean energy may surprise some commentators, who have been predicting trouble for renewables as a result of the oil price collapse,” said Michael Liebreich, chairman of the advisory board of the London-based researcher, in a statement. “Our answer is that 2014 was too early to see any noticeable effect on investment. The impact of cheaper crude will be felt much more in road transport than in electricity generation.”

According to Liebreich, BNEF was predicting that clean energy investment would rebound by at least 10 percent in 2014, but the actual figures exceeded expectations. This unanticipated rise was driven in large part by solar power investment, which made up nearly half of the total by increasing 25 percent to $149.6 billion in 2014. Wind power investment also achieved an all-time high of $99.5 billion, rising 11 percent mostly through large, offshore wind projects which accounted for around a fifth of that total.

The second largest investment category after large asset finance was small distributed capacity, which is made up of projects under one megawatt, primarily rooftop solar. Investment in this category expanded 34 percent to $73.5 billion, which BNEF says reflects “a shift away from large, centralized power stations to smaller, local facilities … that will weigh on utilities that are under pressure to replace fossil-fuel or nuclear power stations with more intermittent and smaller low-carbon facilities.”

From a country perspective, China was the biggest contributor, with $89.5 billion, a 32 percent year-over-year increase. The country has set ambitious solar targets and is growing the industry at a breakneck speed in an effort to increase energy supply while moving away from the heavily polluting fossil fuels that have made heavy smog a regular feature of many urban centers. In an effort to achieve this energy diversification, China has also started investing heavily in wind. In 2014, China was on track to install more solar domestically than the U.S. ever has. As of August, China had installed 23 gigawatts — 13 shy of the country’s goal of installing 35 GW by the end of 2015.

The U.S., which has over 12 GW of solar capacity installed, also saw its clean energy investments rise to $51.8 billion, an eight percent increase. Investment in wind power was down by over half to $5.9 billion due to the uncertainty of the federal Production Tax Credit, which has become highly politicized.

Clean energy investment rose across much of Europe, as well, with a notable 26 percent jump in France due in part to the financing of Europe’s largest ever solar PV plant, the 300 megawatt Cestas project. The Netherlands, following the trend of other Northern European countries quickly pursuing offshore wind power, saw an increase of 232 percent in investment to $6.7 billion.

Australia really was the down under country, seeing clean energy investment plummet 35 percent to $3.7 billion, the lowest since 2009. This dramatic fall has been a result of Prime Minister Tony Abbott’s across-the-board anti-climate and clean energy standpoint, which has left wind and solar developers, once keen on the country’s prospects, uncertain of the future of the industry.