BNEF: Q3 Clean Energy Investments Plunge as Offshore Wind Investors Take the Summer Off

Global clean energy investment had its weakest quarter since 2013 between July and September this year, under the impact of a summer lull in offshore wind financings in Europe and a further stage in the slowdown seen this year in project funding in China and Japan, according to Bloomberg New Energy Finance.

Investment in renewable energy and energy smart technologies worldwide totalled USD 42.4 blllion in the third quarter of 2016, down 31% from the second quarter and a striking 43% from the equivalent three-month period of 2015, according to the latest authoritative data from BNEF.

The weakness of Q3 2016 was concentrated in particular areas – asset finance of utility-scale renewable energy projects was down 49% year-on-year at USD 28.8bn, with wind down 32%.

Abraham Louw, analyst for energy economics at BNEF, said: “There is one special factor here, in the timing of offshore wind financings in Europe – these totalled $20.1bn in the first six months of 2016, a runaway record. But there was then a summer lull, with just $2.4bn in July to September.”

The global Q3 investment figures could be revised upwards in due course, if more transactions come to light. However, with the Q1 and Q2 data an average of 23% down on the equivalent quarters of 2015, it looks certain that clean energy investment in 2016 will end up well below last year’s record of USD 348.5bn, BNEF said.

The third-quarter investment total of USD 42.4bn was the weakest in any quarter since the USD 41.8bn of Q1 2013. The highest quarterly total ever was USD 90bn, in Q2 2015.

China was, as usual, the largest investing country in clean energy in Q3. However, its total of USD 14.4bn was no less than 51% lower than it was in the same quarter of 2015 – reflecting a hiatus after last year’s rush to take advantage of incentives that were about to expire. The US was the second biggest market, with investment of USD 9.5bn, down 40% on Q3 last year.

Europe saw clean energy investment of USD 7.7bn in Q3, down 5% on a year earlier, with the two main contributors being the UK at USD 2.7bn, down 12%, and Germany at USD 2.6bn, up 31%. Japan had investment of USD 3.5bn, down 56%, while Brazil was down 40% at USD .3bn and India down 26% at USD 2bn.

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