Chinese drop in clean energy investment dampens global performance in 2019
Energize Weekly, July 17, 2019
Chinese renewable energy investment dropped 39 percent in the first half of 2019 to $28.8 billion when compared with the same period in 2018, according to Bloomberg New Energy Finance (BNEF).
The 2019 six-month figure was the lowest since 2013 and is the result of a shift this year away from feed-in tariffs to auctions for wind and solar capacity. The feed-in tariffs paid for each kilowatt-hour renewable projects put on the grid.
The decline in Chinese investment was key in the 14 percent global decline in 2019 renewable investment to $117.6 billion, when compared with the first half of 2018.
“The slowdown in investment in China is real, but the figures for first-half 2019 probably overstate its severity,” Justin Wu, head of Asia-Pacific for BNEF, said in a statement.
“We expect a nationwide solar auction happening now to lead to a rush of new PV [photovoltaic] project financings,” Wu said. “We could also see several big deals in offshore wind in the second half.”
Among the big investments that were made in the first half of 2019 were a 950-megawatt solar thermal and photovoltaic complex in Dubai, estimated to cost $4.2 billion, and two offshore wind facilities on the coast of Taiwan with a $5.7 billion price tag.
The Dubai deal for the Mohammed bin Rashid Al Maktoum IV project is the biggest financing ever seen in the solar sector, BNEF said.
“Al Maktoum IV is an unusual one in combining three different types of solar – the thermal technologies of parabolic trough and tower, with conventional PV – but it is also a strong signal of the appetite for solar electricity on the part of both Middle Eastern countries and international financiers,” Jenny Chase, head of solar analysis for BNEF, said in a statement.
U.S. clean energy investment was also down about 6 percent to $23.6 billion, and European clean energy investment in the first half of 2019 was down 4 percent to $22.2 billion compared to the first half of 2018.
In Europe, gains in some countries were offset by declines in others. Spain posted $3.7 billion in investment in the first half of 2019, a 235 percent increase from the previous year. Sweden also saw its investments triple to $2.5 billion, and United Kingdom investment was up 35 percent to $2.5 billion.
But investment drops in the Netherlands, Germany and France tempered overall European performance. French investment was down 75 percent to $567 million.
Japanese 2019 investment was up 3 percent from the first half of 2018 at $8.7 billion.
Investment in India increased 10 percent to $5.9 billion, as the country continued its push to add 175 gigawatts of renewable capacity by 2022. Brazil saw investment of $1.4 billion for the first six months of 2019, a 19 percent year-over-year.