Global Clean Energy Investments Decline

Worldwide investment in clean energy totaled $56.6 billion in the third quarter of 2012, down 5 percent on the previous quarter and 20 percent below Q3 of last year, but on-site installations have remained strong, according to research company Bloomberg New Energy Finance.

The latest numbers suggest that 2012 clean energy investment will fail to match last year’s record $280 billion, and it is likely that full-year investment will fall for the first time in at least eight years.

Bloomberg says the Q3 numbers can be partially explained by weaker investment in the US and India, as well as slowed spending on wind. The US, UK and Italy continue to face policy uncertainty, and clean energy faces low share prices, affecting stock markets and venture capital. Costs have also come down sharply for wind and solar photovoltaic, meaning that the same size capacity additions result in significantly fewer investment dollars.

The Q3 figures demonstrate a geographical shift, as newer markets in South America, Asia and Africa begin to pick up slack from established markets in the US, Europe and China. Investment in the US in Q3 was $7.3 billion, down 28 percent on Q2, and 62 percent on Q3 2011.

But small-scale project installations, such as rooftop solar, have kept up a good pace in the US, China, Japan and the UK. Such projects accounted for about $21.3 billion worldwide in Q3 2012, close to levels for the previous quarter and up 11 percent on Q3 2011.

Looking across clean energy investment by sector, solar led the way in the past quarter with $33.8 billion, up 1 percent on Q2 but down 22 percent on Q3 2011; wind came second with $15.5 billion, down 26 percent on Q2 and 23 percent year-on-year; and small hydro (projects of 50 MW or less) came third with $3.5 billion. Biomass and waste were fourth at $2 billion.

These sectors were followed by energy-smart technologies at $800 million, and biofuels at $700 million.

The top three projects receiving a “financial go-ahead” in the past quarter were phase one of Morocco’s Masen Ouarzazate solar thermal plant, at 160 MW and $1.2 billion; the 300 MW Nareva and International Power Tarfaya wind farm, also in Morocco, at $563 million; and Brazil’s 258 MW Verace wind portfolio, at $497 million.

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