Global new renewable power capacity grew in 2016 even as global new investment in renewables dropped, according to a report commissioned by the United Nations Environment Program out April 6.
The Global Trends in Renewable Energy Investment 2017 report found that global investment in renewables—excluding large hydro—fell in 2016 by 23% to $241.6 billion. That total represented the lowest global investment since 2013.
Global renewable power capacity grew 8% in 2016. “Wind, solar, biomass and waste-to-energy, geothermal, small hydro and marine sources between them added 138.5GW, up from 127.5GW in the previous year,” according to the report.
The reason for the drop in investment is twofold, the report says. “One was lower costs, with average dollar capital expenditure per MW down by more than 10% for solar photovoltaics, onshore wind and offshore wind, improving the competitiveness of those technologies,” according to the report. “The other was not so positive – there was a marked slowdown in financings in China, Japan and some emerging markets during the course of the year. “
Renewable energy investment in China plummeted 32% in 2016 to $78.3 billion. The downturn comes after 11-years of increasing investment.
Much of the rest of the developing world fared no better. “Mexico, Chile, Uruguay, South Africa and Morocco all saw falls in investment of 60% or more, on a mixture of scheduled pauses and delays with auction programmes and financings,” according to the report.
In total, renewable energy investments in developing countries fell 30% to $116.6 billion.
Investment in developed countries in 2016 was a mixed bag. The U.S. saw a 10% decrease to $46.4 billion, while Europe saw a 3% increase to $59.8 billion. Japan’s investments fell 56% to just $14.4 billion.
However, 2016 also saw record low prices and increased competitiveness of renewables. The report notes several cases in which solar and wind projects won bids in auctions at prices that would have been unbelievably low in the recent past. “The records set last year were $29.10 per MWh for solar in Chile and $30 per MWh for onshore wind in Morocco, but there were other eye-catchingly low outcomes to auctions from Dubai to India, and Zambia to Mexico and Peru,” the report says.
Overall, investments in solar fell 34% in 2016 to $113.7 billion. Wind investments totaled $112.5 billion, down 9% from 2015 levels.
—Abby L. Harvey is a POWER reporter.