Clean energy investment globally set for a drop in 2012 – BNEF figures

9 Oct 2012

Figures from analyst Bloomberg New Energy Finance (BNEF) out today suggest that global clean energy investment for 2012 is set to fall short of last year’s US$280bn figure, making it the first down-year for world investment in the sector for at least eight years.

According to BNEF, global investment in clean energy came to US$56.6bn in the third quarter of 2012, a 5pc slip on the second quarter and 20pc lower than this time last year.

The research agency cited weaker figures from the US and India, as well as a lull in wind-farm financings, as being reasons for the drop in investments.

It said that the full-year figure for clean-energy investment globally is likely to be below last year’s US$280bn figure. If this happens, BNEF said 2012 would be the first down-year for global investment in the sector for at least eight years.

Challenges, said BNEF, for the third quarter included policy uncertainty in key markets such as the US, the UK and Italy, as well as the effect of low sector share prices on public market and venture capital investment. It also referred to recent “sharp falls” in the costs of wind and solar photovoltaic technologies.

“The fact that 2012 looks like being a down-year is disappointing, but not surprising – indeed we predicted as much in January,” said Michael Liebreich, chief executive of BNEF.

However, he said that the figures should be put in context. “The third quarter figure was still well over US$50bn – roughly equivalent to investment in the whole of 2004.”

The third quarter figures also pointed to how asset finance of utility-scale projects such as wind farms, solar parks and biofuel plants dropped by 10pc to US$32.3bn.

Liebreich also spoke about how a shift is happening in terms of the siting of clean energy investments.

“The location of some of biggest projects financed in Q3 this year highlight the geographical shift that is taking place in clean energy, with established markets such as the US, Europe and China losing momentum while newer markets in South America, Asia and Africa pick up steam,” he said.

According to BNEF, the top three projects that got the financial go-ahead between July and September were phase one of the Masen Ouarzazate solar power plant in Morocco, the Nareva and International Power Tarfaya wind farm, also in Morocco, and the Verace wind portfolio in Brazil.

Carmel Doyle was a long-time reporter with Silicon Republic