Investors pour $1.5bn into Australian solar and wind energy in Q2

Australia has recorded a significant “bounce-back” in renewable energy investment in the second quarter of 2017, with $1.5 billion poured into big solar and wind projects from April to June, a 77 per cent year-on-year increase.

The Australian up-tick in investment is one of a number highlighted in Bloomberg New Energy Finance’s round-up of Q2, 2017 data; part of a general recovery in global clean energy investment to $64.8 billion in the second quarter of this year, the highest for any quarter since 2Q 2016.

And BNEF says these the dollar-per-megawatt data would be even more impressive if not for the sharp reductions in capital costs for solar and wind – 15 per cent and 14 per cent respectively in the last 12 months – in response to “fierce competition” in manufacturing, and technology improvements.

“The $64.8 billion investment total in 2Q was quite firm given that backdrop of falling costs,” said BNEF analyst Abraham Louw.

“There was also a good spread of big projects financed in different countries, and less reliance on European offshore wind than in some recent quarters.”

Of the two major renewable energy technologies, big solar was the star of the quarter, BNEF says, underpinned by two huge PV projects in the United Arab Emirates: the 800MW Sheikh Mohammed Bin Rashid Al-Maktoum III plant in Dubai; and the 1.2GW Marubeni JinkoSolar and Adwea Sweihan project in Abu Dhabi.

Those two projects alone – the largest in the UAE to date – contributed $1.9 billion between them to the global solar investment total of $35.6 billion, up 19 per cent year-on-year and 20 per cent quarter-on-quarter.

BNEF’s head of policy for Europe, the Middle East and Africa, Victoria Cuming, said the UAE deals showed that the Emirates auction programs were attracting the commitment of hard cash by banks and equity providers.

“They also signal that oil-producing countries are warming to renewables as part of moves to diversify their economies,” Cuming said.

Wind energy, meanwhile, had a weaker three months, with investment slipping 29 per cent year-on-year to $26.2 billion, although up by 43 per cent on the first quarter of this year.

Only two large offshore wind arrays were financed in Europe in 2Q – the 200MW Borkum West II and 112MW Albatros projects in German waters, at $918 million and $532 million.

Other top deals from the quarter included two Chinese 300MW offshore wind arrays, Three Gorges Dafeng and Three Gorges Zhuanghe, costing an estimated $1.8 billion in total.

In Mexico, the 396MW Juchitan de Zaragoza onshore wind farm, at $721 million, and the 400MW Avangrid La Joya onshore wind park in the US at an estimated $620 million.

Elsewhere, biomass and waste-to-energy had investment of $387 million, down 76 per cent year-on-year; small hydro $595 million, down 20 per cent; geothermal $423 million, down 24 per cent; and investment in energy smart technology companies (in areas such as smart grid, energy storage and electric vehicles) was $1.5 billion, down 50 per cent year-on-year, BNEF said.

Country-level results for the second quarter included:

China $23.3 billion, down 16% compared to 2Q 2016, up 32% from 1Q 2017.
The U.S. $14.7 billion, up 6% year-on-year, up 51% quarter-on-quarter.
Europe $8.8 billion, down 49% year-on-year, up 10% quarter-on-quarter.
Germany $3.2 billion, down 34% year-on-year, down 7% quarter-on-quarter.
Japan $2.9 billion, up 12% year-on-year, down 11% quarter-on-quarter.
India $2.6 billion, up 11% year-on-year, down 4% quarter-on-quarter.
U.A.E. $2.1 billion, up from almost nothing in 2Q 2016 and 1Q 2017.
Brazil $1.9 billion, down 1% year-on-year, up 10% quarter-on-quarter.
Mexico $1.8 billion, up 261% year-on-year, down 10% quarter-on-quarter.
Australia $1.5 billion, up 77% year-on-year, down 29% quarter-on-quarter.
Sweden $887 million, up 213% year-on-year, and up from almost nothing in 1Q.
France $845 million, up 43% year-on-year, down 1% quarter-on-quarter.
Egypt $805 million, up from almost nothing in 2Q 2016 and 1Q 2017.
Argentina $464 million, up from almost nothing in 2Q 2016 and 1Q 2017.
The U.K. $407 million, down 93% year-on-year, down 60% quarter-on-quarter.