A record-breaking $3.8 billion deal to finance an offshore wind farm in the North Sea has helped to deliver the strongest quarter for clean energy investment in two years.
Global investment in renewable energy surged to $63.6 billion in Q2 of 2014, according to the latest data from Bloomberg New Energy Finance, a 33 per cent increase on quarter one.
BNEF says the quarter’s strong figures – which fell just $14.4 billion short of the quarterly record of $78 billion from Q2 2011 – were driven by a variety of big deals for solar and wind projects sized in the hundreds of megawatts, and strong activity in rooftop solar installation.
The $3.8 billion financing of the 600MW Gemini offshore wind farm off the coast of the Netherlands – the largest investment decision ever in renewable energy (excluding hydro) was sealed in May.
Led by Canada’s Northland Power, it also involved three other equity investor groups, 12 European, Canadian and Japanese commercial banks, the European Investment Bank, a Danish pension fund and three export-credit agencies.
Other highlights from the quarter included the $818 million 121MW Ashalim I Sun Negev solar thermal project in Israel, and the $647 million investment go-ahead for the 252MW Cemex Ventika wind farm in Mexico.
By asset class, finance of utility-scale projects such as wind farms, solar parks and small hydro dams totalled $38.2 billion in the second quarter of 2014, up from $22.8 billion in Q1, but down slightly from $38.5bn in Q2 2013.
Financing of rooftop solar and other small-scale PV capacity rose by 41 per cent on the same quarter a year earlier, to $21.2 billion.
China, was the biggest national contributor to the quarter’s investments, committing $19.3 billion to renewable energy projects – more than double the Q1 figure and a 16 per cent increase on the same quarter a year ago, says BNEF.
Europe, meanwhile, invested $14 billion – a 26 per cent improvement on Q1 – while the US features high on the most improved list, investing 34 per cent more in Q2 than Q1, at $10.6 billion.
Michael Liebreich, chairman of the BNEF advisory, said the rebound in clean energy investment – after two years of decline driven by the European fiscal crisis, policy uncertainty and plummeting costs of renewables – represented a shift in the market.
“What we are seeing is the new competitiveness of renewable energy winning through, driving a surge in demand,” he said.
“The new investment upswing is broad-based, with activity rising across wind and solar, large-scale and small-scale projects, and covering most of the big markets.
“Even venture capital and private equity, which have been depressed in prior quarters, have seen the green shoots of recovery in deal volume,” Liebreich said.
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