Clean Energy Investment Jumps 16% on China’s Support for Solar

(Bloomberg) — Clean energy investment rose for the first
time in three years in 2014 as China’s support for solar power
and record spending on wind farms overcame a slump in oil prices
that unsettled the outlook for the industry.

New funds for wind, solar, biofuels and other low-carbon
energy technologies gained 16 percent to $310 billion last year,
according to data compiled by Bloomberg New Energy Finance. It
was the first growth since 2011, erasing the impact of lower
solar-panel prices and falling subsides in the U.S. and Europe
that hurt the industry in previous years.

“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.
“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.”

The findings ease concerns that the oil price rout that
began in the middle of last year would lead to a sharp reduction
in funding for low-carbon energy supplies that are more costly
than fossil fuels. The WilderHill New Energy Global Innovation
Index
tracking 105 clean-energy equities tumbled almost 19
percent since March as oil depressed natural gas in the U.S. and
Asia.

Cheap Oil

Electric car sales probably will be first to feel the
impact of cheaper oil, which has reduced the cost of gasoline
and made conventional cars more economical. Investment in
biofuels, which are blended with gasoline to help cut emissions,
was one of the few clean-energy segments to suffer a decline,
dropping 7 percent to $5.1 billion.

Almost half of investment went for solar, which rose 25
percent to $149.6 billion in 2014, its highest share of the
total ever. Funding for wind power grew 11 percent to $99.5
billion, a record, largely because of support for multibillion
pound offshore projects.

What BNEF calls energy smart technologies, including power
storage, efficiency products and electric cars, rose 10 percent
to $37 billion last year.

China was the biggest single contributor among the major
markets for renewable energy, increasing its investment 32
percent to $89.5 billion. The nation has become the top market
for solar power and one of the largest for wind after ladling
out support for the industries to diversify its energy supplies.

U.S. Investments

The U.S. boosted its investment 8 percent to $51.8 billion,
the most since 2012. Japan, which has become the second-biggest
market for solar power, lifted funding for renewables 12 percent
to $41.3 billion. In Europe, which led the industry in
installations in the first decade of this century, investment
grew 1 percent to $66 billion despite funding for offshore wind.

Reflecting a shift away from large, centralized power
stations to smaller, local facilities, investment in so-called
distributed power swelled 34 percent to $73.5 billion. 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.

New equity raised for clean energy companies on the public
markets grew 52 percent to $18.7 billion driven by a succession
of U.S. and U.K.-listed “yieldcos” and project funds.

To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Alex Devine

About Bloomberg New Energy Finance

Bloomberg New Energy Finance (BNEF) is an industry research firm focused on helping energy professionals generate opportunities. With a team of 200 experts spread across six continents, BNEF provides independent analysis and insight, enabling decision-makers to navigate change in an evolving energy economy.
 
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