Financial support for installations of offshore wind projects helped investment in renewable energy capacity hit a record high in 2019, according to data from research company BloombergNEF (BNEF) released Jan. 16.
The group said worldwide investment in renewables was $282.2 billion last year, up 1% from $280.2 billion in 2018. Financing of offshore wind projects, particularly in Europe and China, hit $29.9 billion, a 19% increase from the prior year and $2 billion more than the previous high in 2016.
“Offshore wind developers in China brought forward 15 projects to beat a scheduled expiry of that country’s feed-in tariff,” said Tom Harries, head of wind research at BNEF, in his comments Thursday about the report. “We expect the sector’s global momentum to continue in 2020, with the focus on gigawatt-scale projects in the British North Sea and the first commercial arrays off the U.S. East Coast.”
The U.S. projects include Dominion Energy’s proposed 2.64-GW Virginia Offshore Wind installation. A major project off Connecticut also was finalized late last year. BNEF said other multi-billion-dollar deals made in 2019 include projects off the coasts of mainland China and Taiwan, and in waters off Britain, France, and the Netherlands.
Several Deals in 4Q
The report said several deals were finalized in the fourth quarter of 2019, including the 432-MW Neart na Gaoithe array off the Scottish coast at $3.4 billion; the 376-MW Formosa II Miaoli project off Taiwan at $2 billion; and the 500-MW Fuzhou Changle C installation in the East China Sea at $1.5 billion.
France’s first offshore wind project, the 480-MW Saint Nazaire, received $2.5 billion in funding in the third quarter of the year.
Wind power, both onshore and offshore, led all renewable investment worldwide at $138.2 billion, up 6% year-over-year. Investment in solar power fell 3% in 2019 versus 2018, dropping to $131.1 billion. BNEF said wind and solar generation capacity combined grew about 180 GW in 2019, up about 20 GW from 2018.
The report noted that biomass and waste-to-energy projects saw $9.7 billion of capacity investment in 2019, up 9%. Geothermal, though, drew just $1 billion of investment, off 56% year-over-year. Biofuels were down 43% at an estimated $500 million, and small hydro fell 3% to $1.7 billion.
China Leads Global Investment
China led global investment at $83.4 billion in 2019, off 8% from 2018 to its lowest level since 2013. China invested 10% more in wind power capacity, at $55 billion, but invested a full one-third less in solar power, at $25.7 billion. That level was less than a third of what China invested in solar power in its top year, 2017.
The U.S. was the second-largest investing country in renewable energy capacity, at $55.5 billion, up 28% from 2018. The report noted developers hurried to get projects on the board in order to qualify for federal tax credits that are being scaled back in 2020.
“It’s notable that in this third year of the Trump presidency, which has not been particularly supportive of renewables, U.S. clean energy investment set a new record by a country mile,” said Ethan Zindler, head of Americas for BNEF. Zindler said the second-highest year for U.S. investment in renewables, some $45.7 billion, came in Trump’s first year, 2017. “These technologies are more cost-competitive than ever, and the fact that there was a tax credit step-down on the horizon made the market particularly busy in 2019.”
European Investment Falls
Europe slipped behind the U.S. in 2019, investing $54.3 billion in renewables capacity, down 7%. Spain led European countries at $8.4 billion, up 25% from the year earlier, and the highest annual figure for that country since 2011.
“The $6 billion of solar investment in Spain in 2019 is impressive because these projects are going ahead at record-low costs per megawatt,” said Pietro Radoia, senior associate for solar at BNEF. “Developers are building PV [photovoltaic] parks on the back of low tariffs agreed in government-run auctions or, increasingly, without any subsidy support at all.”
The UK invested $5.3 billion in 2019, down 40% from 2018, and its lowest total since 2007. Germany was down 30% at $4.4 billion, its lowest since 2004, and Sweden was down 19% at $3.7 billion. The Netherlands, though, jumped 25% to $5.5 billion. France was 3% higher at $4.4 billion, and Ukraine increased its investment 56% to $3.4 billion.
Japan invested $16.5 billion in renewable capacity, mostly solar power, last year, a 10% drop from 2018. Australia committed $5.6 billion, down 40%. India financed $9.3 billion of renewable energy projects, off 14% year-over-year. The United Arab Emirates invested a record $4.5 billion, nearly all of that for the 950-MW Al Maktoum IV solar thermal and photovoltaic complex in Dubai.
Some Latin America countries increased their investments in 2019. Brazil saw a 74% increase, to $6.5 billion. Mexico, even as its new president began rolling back some energy reform measures, committed $4.3 billion, up 17%. Chilean investment rose to $4.9 billion. Argentina, however, saw an 18% drop in financing, to $2 billion.
BNEF also compiled data from what it considers total clean energy investment, which includes money in support of research and development, and into specialist companies via public market share issues, and venture capital and private equity deals. The group said those investments totaled $363.3 billion in 2019, a slight rise from a revised $362.5 billion in 2018.
BNEF data showed public markets invested $9.3 billion in clean energy, 13% less than in 2018, while venture capital and private equity investors put in $10.5 billion, a 6% increase from 2018, and their highest total since 2010. U.S. electric vehicle companies accounted for the biggest deals in both categories, according to BNEF, as Tesla had an $862.5 million public market secondary issue, and Rivian Automotive, a lesser-known company headquartered in Plymouth, Michigan, had a $1.3 billion private equity round.
—Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).