Renewable energy investment triples fossil fuel-based investment by 2018

Financing in biomass and waste use increased 54% in 2018

In 2018 global investment in renewable energy reached US$ 288.9 billion and funding for new capacity was almost three times higher than in the coal and gas sector, according to data from BloombergNEF published in the Global State of Renewables Report 2019.

20/06/2019

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Although the total amount was 11% lower than the previous year, 2018 was the ninth consecutive year in which it exceeded US$ 200 billion and the fifth consecutive year in excess of US$ 250 billion. The figure does not include investments in hydropower facilities greater than 50 MW, which received additional investments of US$ 16 billion, also much less than in 2017, when US$ 40 billion was invested.

The fall in 2018 can be attributed to a slowdown in the deployment of solar energy in China and, in part, to cheaper photovoltaic technology, meaning that solar capacity could be expanded at a lower cost.

Globally, solar remains the biggest investment focus, with US$ 139.7 billion in 2018, 22% less than last year. Meanwhile, investment in wind energy increased 2% in 2018 to US$134.1 billion. The other sectors lagged far behind, although financing in biomass and waste management increased 54% to US$ 8.7 billion.

The amount earmarked for new renewable energy capacity was US$272.3 billion (excluding large hydroelectric plants), much more than for new coal and gas generation capacity, which received US$95 billion.

“Global trends continue to indicate that investing in renewable energy is investing in a profitable future. Investments in renewable energy in 2018 were three times higher than the amount earmarked for new coal and gas generators,” noted Inger Andersen, Executive Director of the United Nations Environment Programme.

“While this is encouraging, we must accelerate the pace significantly if we are to achieve the global climate and development goals,” Andersen added.

“When overall investment falls, it’s easy to think we’re falling back, but that’s not the case. Renewable energy is becoming less expensive and we are seeing an expansion of wind and solar investment activity in more countries in Asia, Eastern Europe, the Middle East and Africa,” said Angus McCrone, editor-in-chief of BloombergNEF.

China leads, Europe and developing countries recover

China led the field for the seventh consecutive year, with US$ 91.2 billion, 37% less than in 2017. This is due to a number of factors including the mid-year change in official feed-in tariff policy, which affected investment in solar energy.

China accounted for 32% of total global investment, followed by Europe with 21%, the United States with 17% and Asia-Oceania (excluding China and India) with 15%. The smallest fractions were in India (5%), the Middle East and Africa (5%), the Americas (excluding Brazil and the United States) (3%) and Brazil (1%).

Excluding China, investment in renewable energy in the developing world increased 6% to US$ 61.6 billion, a record.

Investment in Europe rose 39% to $61.2 billion, the highest level in two years, driven largely by large wind investments.

In the United States, investment increased 1% to US$ 48.5 billion, the highest level since 2011, also driven by an increase in wind energy financing.

Investment in the Asia-Pacific region (excluding China and India) increased 6% to US$ 44.2 billion, the highest level in three years, while the Middle East and Africa saw an investment jump of 57% to a record US$ 15.4 billion. In the Americas (excluding Brazil and the United States), investment declined 23% (excluding large hydro) to US$ 9.8 billion.

“It’s reassuring to see investment grow in the U.S.,” said Dr. Nils Stieglitz, president of the Frankfurt School of Finance and Management, which was involved in preparing the report. “This increase in investment can in part be driven by projects that rush to qualify under the current fiscal support plan, which will expire in a few years and whose extension possibilities are quite low,” he added.

More detailed information on global investment in renewable energy financing in 2018 will be shared in the Global Trends in Renewable Energy Investment report, which will be released in September ahead of the UN Secretary-General’s Climate Action Summit. The report has been published every year since 2007. This year’s edition is co-financed by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. It will have a retrospective on investment in renewable energy over the last decade.