Global clean energy investment falls 18% to $287.6bn

Global clean energy investment fell by 18% to $287.5 billion (€269.7bn) in 2016, dragged down by sharp falls in equipment prices and slowdown in key Asian markets.

According to a new report by Bloomberg New Energy Finance (BNEF), Chinese investment totalled at $87.8 billion, down 26% from the 2015 record high of $119.1 billion, while Japan invested a meagre $22.8 billion, marking a 43% decrease year on year.

“After years of record-breaking investment driven by some of the world’s most generous feed-in tariffs, China and Japan are cutting back on building new large-scale projects and shifting towards digesting the capacity they have already put in place,” Justin Wu, head of Asia for BNEF, said.

According to Wu, China is now facing a slowing power demand growing wind and solar curtailment as the Asian juggernaut’s government focuses on investing in grids and reforming the power market so that the renewables in place can generate to their full potential.

“In Japan, future growth will come not from utility-scale projects but from rooftop solar systems installed by consumers attracted by the increasingly favourable economics of self-consumption,” he concluded

Solar leading the way

Investment in the entire Asia Pacific region fell by 26% to $135 billion, making up roughly 47% of global investment.

India investments, nearly at the same level as in 2015 at $9.6 billion, were driven by several massive solar energy projects that were given the go-ahead.

In the US, clean energy investment decreased 7% to $58.6 billion, caused by developer progressing wind and solar projects eligible for the tax credits Congress extended back in December 2015.

Europe saw meagre growth at 3% from last year, totalling $70.9 billion and spearheaded by the UK for the third consecutive year.

 In the rest of the world, investments generally fell, often drastically as exemplified by the 80% drop in Chile, but Middle Eastern Jordan broke the bank by reaching $1 billion for the first time, marking 145% growth.

Despite the overall slump in investment, the total installed capacity increased with solar projects leading the way at a record-breaking 70GW of added capacity.

Solar energy also lead investments monetarily with $116 billion (down 32% from 2015), followed by wind at $110.3 billion (down 11%), smart technologies at $41.6 billion (up 29%), biomass level at $6.7 billion, and biofuels at $2.2 billion, marking a 37% drop.

Acquisition activity in the clean energy industry broke the $100 billion benchmark for the first time, increasing to $117.5 billion from $97 billion in 2015.

This article was written by Ilari Kauppila, deputy editor at Biofuels International

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