Global clean energy investment jumped to $63.6 billion in the second quarter of this year (Q2'14), up 33% compared to Q1'14 and 9% compared to Q2'13, according to a new report from Bloomberg New Energy Finance (BNEF).
The report says Q2'14 was the strongest quarter for investment since Q2'12, which reached $69.6 billion, and was down only $14.4 billion from the quarterly record of $78 billion in Q2'11. Last quarter's strong figures were driven by a combination of big financings for wind and solar projects sized in the hundreds of megawatts, as well as busy activity in the installation of small-scale rooftop photovoltaics.
According to BNEF, the stand-out deal of the quarter was the $3.8 billion financing of the 600 MW Gemini offshore wind farm in the North Sea – the largest investment decision ever in renewable energy (excluding large hydroelectric). Signed in May, the transaction involved the developer – Canada's Northland Power – plus three other equity investor groups; 12 European, Canadian and Japanese commercial banks; the European Investment Bank; a Danish pension fund; and three export credit agencies.
However, the report notes Gemini was only one of the highlights. Also looming large were the $818 million financing of the 121 MW Ashalim I Sun Negev solar thermal project in Israel, and the $647 million investment go-ahead for the 252 MW Cemex Ventika wind farm in Mexico.
Geographically, the report says the biggest contributions to the bounce in clean energy investment in Q2'14 came from China, which committed $19.3 billion, more than double the Q1'14 figure and up 16% on the same quarter a year ago; the U.S., which invested $10.6 billion, up 34% from Q1'14 and 2% above another strong figure in Q2'13; and Europe, which invested $14 billion, up 26% on Q1'14 and 47% on a weak Q2 last year.
"The past two years have seen investment decline by over 20 percent from its 2011 peak, driven equally by the European fiscal crisis, policy uncertainty and plummeting costs for renewable energy equipment," explains Michael Liebreich, chairman of the advisory board at BNEF. "Now, what we are seeing is the new competitiveness of renewable energy winning through, driving a surge in demand."
"We are expecting the full-year figures for 2014 to show a clear rebound in global investment in clean energy," Liebreich continues. "The debt-and-policy-fuelled bubble years of 2007 to 2010 were inevitably going to be followed by a period of consolidation; that period now definitely looks to be over, and the industry is gathering momentum once again."