China solar power boom drives worldwide clean energy investment

World clean energy investment totaled $333.5 billion last year

Jan 16th, 2018
Content Dam Elp Online Articles 2018 01 Solar Power January 9 Elp

An extraordinary boom in photovoltaic installations made 2017 a record year for China’s investment in clean energy.

This over-shadowed changes elsewhere, including jumps in investment in Australia and Mexico, and declines in Japan, the U.K. and Germany.

Annual figures from Bloomberg New Energy Finance (BNEF), based on its database of projects and deals, show that global investment in renewable energy and energy-smart technologies reached $333.5 billion last year, up 3 percent from a revised $324.6 billion in 2016, and only 7 percent short of the record figure of $360.3 billion, reached in 2015.

Jon Moore, chief executive of BNEF, commented: “The 2017 total is all the more remarkable when you consider that capital costs for the leading technology – solar – continue to fall sharply. Typical utility-scale PV systems were about 25 percent cheaper per megawatt last year than they were two years earlier.”

Solar investment globally amounted to $160.8 billion in 2017, up 18 percent on the previous year despite these cost reductions. Just over half of that world total, or $86.5 billion, was spent in China. This was 58 percent higher than in 2016, with an estimated 53GW of PV capacity installed – up from 30 GW in 2016.

Justin Wu, head of Asia-Pacific for BNEF, said: “China installed about 20GW more solar capacity in 2017 than we forecast. This happened for two main reasons: first, despite a growing subsidy burden and worsening power curtailment, China's regulators, under pressure from the industry, were slow to curb build of utility-scale projects outside allocated government quotas. Developers of these projects are assuming they will be allocated subsidy in future years.

“Second, the cost of solar continues to fall in China, and more projects are being deployed on rooftops, in industrial parks or at other distributed locales. These systems are not limited by the government quota. Large energy consumers in China are now installing solar panels to meet their own demand, with a minimal premium subsidy.”

Overall, Chinese investment in all the clean energy technologies was $132.6 billion, up 24 percent setting a new record. The next biggest investing country was the U.S., at $56.9 billion, up 1 percent on 2016 despite the less friendly tone towards renewables adopted by the Trump administration.

Large wind and solar project financings pushed Australia up 150 percent to a record $9 billion, and Mexico up 516 percent to $6.2 billion. On the downside, Japan saw investment decline by 16 percent in 2017, to $23.4 billion, while Germany slipped 26 percent to $14.6 billion and the U.K. 56 percent to $10.3 billion in the face of changes in policy support. Europe as a whole invested $57.4 billion, down 26 percent year-on-year.

Below are the 2017 totals for other countries investing $1 billion-plus in clean energy:

· India $11 billion, down 20 percent compared to 2016

· Brazil $6.2 billion, up 10 percent

· France $5 billion, up 15 percent

· Sweden $4 billion, up 109 percent

· Netherlands $3.5 billion, up 30 percent

· Canada $3.3 billion, up 45 percent

· South Korea $2.9 billion, up 14 percent

· Egypt $2.6 billion, up 495 percent

· Italy $2.5 billion, up 15 percent

· Turkey $2.3 billion, down 8 percent

· United Arab Emirates $2.2 billion, up 23-fold

· Norway $2 billion, down 12 percent

· Argentina $1.8 billion, up 777 percent

· Switzerland $1.7 billion, down 10 percent

· Chile $1.5 billion, up 55 percent

· Austria $1.2 billion, up 4 percent

· Spain $1.1 billion, up 36 percent

· Taiwan $1 billion, down 6 percent

· Indonesia $1 billion, up 71 percent

Solar led the way, as mentioned above, attracting $160.8 billion – equivalent to 48 percent of the global total for all of clean energy investment. The two biggest solar projects of all to get the go-ahead last year were both in the United Arab Emirates: the 1.2GW Marubeni JinkoSolar and Adwea Sweihan plant, at $899 million, and the 800 MW Sheikh Mohammed Bin Rashid Al Maktoum III installation, at an estimated $968 million.

Wind was the second-biggest sector for investment in 2017, at $107.2 billion. This was down 12 percent on 2016 levels, but there were record-breaking projects financed both onshore and offshore. Onshore, American Electric Power said it would back the 2 GW Oklahoma Wind Catcher project in the U.S., at $2.9 billion excluding transmission. Offshore, Ørsted said it had reached ‘final investment decision’ on the 1.4GW Hornsea 2 project in the U.K. North Sea, at an estimated $4.8 billion. There were also 13 Chinese offshore wind projects financed last year, with total capacity of 3.7 GW, and estimated investment of $10.8 billion.

The third-biggest sector was energy-smart technologies, where asset finance of smart meters and battery storage, and equity-raising by specialist companies in smart grid, efficiency, storage and electric vehicles, reached $48.8 billion in 2017, up 7 percent on the previous year and the highest ever.

The remaining sectors lagged far behind, with biomass and waste-to-energy down 36 percent at $4.7 billion, biofuels down 3 percent at $2 billion, small hydro 14 percent lower at $3.4 billion, low-carbon services 4 percent down at $4.8 billion, geothermal down 34 percent at $1.6 billion, and marine energy down 14 percent at just $156 million.

The clean energy investment total excludes hydro-electric projects of more than 50 MW. However, for comparison, final investment decisions in large hydro are likely to have been worth $40-50 billion in 2017.

BNEF’s preliminary estimates are that a record 160 GW of clean energy generating capacity (excluding large hydro) were commissioned in 2017, with solar providing 98 GW of that, wind 56 GW, biomass and waste-to-energy 3 GW, small hydro 2.7GW, geothermal 700 MW and marine less than 10 MW.

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