Clean power investment slumps 28% in quarter amid market turmoil
By Bloomberg
Global investment in clean energy slumped 28 percent in the second quarter as volatile financial markets damped funding deals, while the strong U.S. dollar drove down the value of projects in other regions.
A total of $53 billion was invested in wind, solar, biomass and other renewable sources of energy in the second quarter, compared with $73.6 billion in the same period last year, according to research released Friday by Bloomberg New Energy Finance.
The declining investment figures also show that renewable technologies are no longer considered risky alternatives, and are attracting less attention from venture capital and private equity companies, that are typically willing to place big, speculative bets in search of high returns. Backing from these investors fell 60 percent to $564 million, the lowest since the third quarter of 2005 and far below the peak of $4.2 billion in the third quarter of 2008.
The decline “reflects the fact that technologies such as wind and PV are now far more mature,” Luke Mills, a BNEF analyst, said in the statement.
China was the biggest market, with investment sliding 36 percent to $15.5 billion, including $6.4 billion for solar energy. The U.S. followed with $9.4 billion, down 21 percent, Japan with $8.1 billion, Germany at $8.3 billion and the U.K. with $2.7 billion.
Project Finance
Project financing for utility-scale power plants made up the bulk of investment in the quarter, with $30.9 billion.
Financing from public markets totaled $2.9 billion in the quarter. The biggest was SunEdison Inc.’s $900 million in convertible debt.
Financing for wind, solar and other clean energy sources has been climbing, with a revised 2014 total of $318 billion, up 19 percent from the prior year. As prices decline, BNEF expects renewables to draw about two-thirds of the forecasted $12.2 trillion in spending on new generating capacity through 2040.
“In the medium term, we expect investment to resume its strong growth,” Michael Liebreich, chairman of BNEF’s advisory board, said in a statement.
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