Solar power drives renewable energy investment boom in 2014

Global clean energy investment leapt 16% in 2014 led by solar power surge in US and China - but Europe lags…

Global clean energy investment leapt 16% in 2014 led by solar power surge in US and China - but Europe lags behind.

Global investment in clean energy jumped 16% in 2014, boosted by fast-growing solar power in the US and China. Solar, whose costs have plummeted in recent years, attracted over half the total funding for the first time.

The green energy market has been gloomy in recent years and the rise in investment is the first since 2011. But despite strong growth in most regions, only a series of large offshore wind farms stopped Europe going into reverse, while the Australian government’s antipathy to renewables saw investment there tumble by 35%.

The new figures, from Bloomberg New Energy Finance (BNEF), show $310bn (£205bn) was ploughed into green energy last year, just short of the record $317bn in 2011. However, as green energy gets ever cheaper, the money invested in 2014 bought almost double the clean electricity capacity than in 2011.

“The investment bounce back in 2014 exceeded our expectations,” said Michael Liebreich, chairman of BNEF’s advisory board. “Solar was the biggest single contributor, thanks to the huge improvements in its cost-competitiveness over the last five years.”

Solar investment rose by 25% in 2014, while wind power rose 11% to comprise a third of all investment. Energy efficiency and electric vehicles rose 10%, including the $2.3bn Tesla Motors raised. But amid concerns over how green they actually are, biofuels investment fell 7% and biomass and incinerator projects attracted 10% less finance.

China was the clear national leader, with investment rising 32% to $90bn, with the US second, up 8% to $52bn, and Japan up 12% to $41bn. Canada, Brazil and India all saw significant rises too, to about $9bn. But in Europe, despite the flurry in offshore wind, investment edged just 1% higher to $66bn. In both the UK and Germany, investment rose 3% to about $15bn, while France jumped up 25% to $7bn, in part due to Europe’s biggest ever solar photovoltaic plant, the 300MW Cestas project.

Among the mega solar and onshore wind projects financed in 2014 were the $1bn Setouchi solar project in Japan, the $1bn Xina Solar One plant in South Africa, and the $860m Lake Turkana wind project in Kenya. There were also seven mega offshore wind projects, including the $2.6bn Dudgeon project in UK waters and the $3.8bn Gemini array off the Netherlands, which is the most valuable renewable energy investment ever made, excluding hydro-electric dams. Rooftop solar also had a strong year, up 34% to $74bn.

The falling price of oil has had little effect on clean energy investment, said Liebreich: “2014 was too early to see any noticeable effect on investment, and anyway the impact of cheaper crude will be felt much more in road transport than in electricity generation.”

Ed Davey, the UK’s energy and climate change secretary said: “Renewables are proving they can be cost competitive, which is why they are playing a key role in powering the economic recovery. We are transforming our electricity market [and] that’s why the UK is a leading destination for renewables and is number one for offshore wind. Since 2010, renewable electricity generation has almost trebled and renewable electricity investment has more than doubled.”

“The figures show that renewable energy is increasingly cost-competitive, with solar in particular rapidly approaching parity with fossil-fuel generation. They suggest also that investors are growing weary of increasingly volatile fossil fuel markets,” said Richard Black, director of the Energy and Climate Intelligence Unit. 

“Some developing countries have increased low-carbon investment hugely – a staggering 88% in the case of Brazil – and there is a danger that the UK, with its restrictive planning regulations for renewables, will find itself increasingly swimming against the global tide,” Black said.

“It’s encouraging to see the smart money in the world’s economic powerhouses is betting on clean energy,” said Doug Parr, Greenpeace UK’s chief scientist. “The only disappointment is that, save for offshore wind, the UK and the EU are now lagging behind. For all the whinging about UK ‘going it alone’ on clean energy, it is increasingly clear that the bigger economic risk is being left behind as the low-carbon jobs go where political leaders show genuine commitment to a clean energy future.”