February 3 - According to a Bloomberg New Energy Finance (BNEF) report, new investment in clean energy worldwide fell by 18 percent last year to USD287.5 billion despite a record year for offshore wind finance.
According to BNEF, the 2016 setback in global investment partly reflected further sharp falls in equipment prices, particularly in the solar power industry. BNEF added that there was also a marked cooling in two key markets - China and Japan - with clean energy investment down 26 percent and 43 percent, respectively.
"After years of record-breaking investment driven by some of the world's most generous feed-in tariffs, China and Japan are cutting back on building new large-scale projects and shifting towards digesting the capacity they have already put in place," said Justin Wu, head of Asia for BNEF.
Offshore wind was the brightest spot in the global clean energy investment picture in 2016, noted BNEF, with capital spending commitments to this technology hitting USD29.9 billion last year - up 40 percent compared with 2015 - as developers took advantage of improved economics, resulting from bigger turbines and better construction know-how.
Last year's record offshore wind tally included the go-ahead for the largest ever project, Dong Energy's 1.2 GW Hornsea array off the UK coast, at a cost of USD5.7 billion, plus 14 other parks of more than 100 MW in British, German, Belgian, Danish and Chinese waters.
Jon Moore, chief executive of BNEF, commented: "The offshore wind record last year shows that this technology has made huge strides in terms of cost-effectiveness, and in proving its reliability and performance. Europe saw USD25.8 billion of offshore wind investment, but there was also USD4.1 billion in China, and new markets are set to open up in North America and Taiwan."
Even though overall investment in clean energy was down in 2016, the total capacity installed was not. Estimates from BNEF's analysis teams suggest that a record 70 GW of solar was added last year, up from 56 GW in 2015, plus 56.5 GW of wind, down from 63 GW.
Clean energy investment in the USA slipped 7 percent year-on-year to USD58.6 billion as developers took time to progress wind and solar projects eligible for the tax credits. Investment in Canada was also down by 46 percent.
Investment in the whole Asia-Pacific region including India and China fell 26 percent; while clean energy investment in Europe grew by 3 percent year-on-year, which BNEF attributed to offshore wind demand and the biggest onshore wind project ever financed.
Meanwhile investment in South Africa fell 76 percent to USD914 million, while Chilean investment dropped by a huge 80 percent. Mexico also fell 59 percent to USD1 billion and Uruguay saw a 74 percent decrease in investment.
BNEF noted that one of the only emerging markets to show an increase in clean energy investment was Jordan, which saw a 147 percent year-on-year increase at USD1.2 billion in 2016.
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