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Clean energy investments in 2015 hit a new record of $329bn

Clean energy investments in 2015 hit a new record of $329bn


The total new investment in clean energy jumped to a record $329bn in 2015, with the Asia-Pacific region accounting for over half the investment, according to Bloomberg New Energy Finance numbers released last week. China remained the largest clean energy investor, accounting for $111bn, while solar attracted the largest chunk of funding.

“These figures are a stunning riposte to all those who expected clean energy investment to stall on falling oil and gas prices,” said Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance. “They highlight the improving cost-competitiveness of solar and wind power, driven in part by the move by many countries to reverse-auction new capacity rather than providing advantageous tariffs, a shift that has put producers under continuing price pressure,” he said.

China is likely to include further actions to steer the country away from coal towards less polluting options in its 13th five year plan (2016-20), to be unveiled in March 2016. A national carbon emission trading programme – the world’s largest – is set to be launched, covering nearly 10,000 companies emitting 3-4bn tonnes of CO2.

Meanwhile, solar and wind tariffs for new plants were reduced from 1 January 2016. Bloomberg New Energy Finance expects new PV build in China to be 18-20GW in 2016. For wind, it forecasts 20-23GW in 2016 and 2017, and 19-20GW in 2018-20. The note China cuts tariffs for PV, wind and coal provides more details of these forecasts.

A country that could join the renewables high-growth list soon is Iran, which is aiming for an “economic leap” after the lifting of sanctions. It already has a generous feed-in tariff programme for renewables, and a fairly strong pipeline of projects. BNEF expects the country’s non-hydro renewables capacity to increase from 400MW at the end of 2015 to 5.6GW by 2020, led by wind (3.9GW) and solar (1.4GW). Details of projects and developers in the country can be found in the recent note The wind blows Iran’s way.

The European Investment Bank announced that it would lend EUR 100bn ($109bn) for climate action over the next five years. The Luxembourg-based development bank provided a record EUR 20.6bn to green projects in 2015, it said in an e-mailed statement. It targets 25% of its total lending towards climate action, a proportion that was surpassed last year.

China National Building Materials signed a GBP 1.1bn ($1.6bn) agreement with a UK unit of Hong Kong-based Welink Global to develop solar power projects and energy-efficient housing in the UK.

In Turkey, the European Bank for Reconstruction and Development and the Clean Technology Fund formed a programme to lend $125m to develop geothermal in Turkey. The goal is to develop five geothermal power plants with a combined capacity of at least 60MW, the London-based development bank said in a statement.

The Development Bank of Japan and Japan Wind Development announced the creation of the nation’s first fund for wind power. They aim to introduce the JPY 50bn ($423m) joint fund in April.

There were also some announcements last week on expansion of manufacturing capacity: LG Electronics said it plans to invest as much as $435m to build six high-efficiency solar manufacturing lines in South Korea and Yingli Green Energy said it will build its first overseas factory in Thailand as it seeks to grow outside China.

Activity in the green bonds universe picked up in the last quarter, though the total issues for the year were limited to $46bn, compared to $39bn in 2014.

Q&A of the week
Floating offshore wind cost level with fixed by 2025, says Statoil
“Towards 2025, we expect floating offshore wind to be competitive with fixed-bottom developments,” Stephen Bull, senior vice president for offshore wind at Statoil, told Clean Energy and Carbon Brief in an interview: “The industrialisation process – larger turbines, fewer cabling arrays and better technology will contribute to the cost reduction.”

The spar buoy technology to be used in Hywind, Scotland’s first floating wind farm, can be more easily industrialised than competing alternatives, according to project developer Statoil, due to its existing application in deep-sea drilling. “Industrialisation of floating wind is a key opportunity for companies with skillsets from the oil and gas business,” said Bull, speaking from the new energy solutions unit of the Oslo-based oil and gas company.

The Hywind pilot park will have a capacity of 30MW and is expected to be operational and producing power by the end of 2017, according to Statoil. The company is investing some NOK 2bn ($225m) in the project, to be located approximately 25 to 30km off the coast of Peterhead in Aberdeenshire. Financial close was reached in November last year.

The five floating turbines will be kept stable in waters of 100 metres in depth with spar buoys – a type of foundation commonly used in the oil and gas industry, involving a sealed steel tube and mooring lines with drag anchors.

Statoil has chosen to use a 6-MW turbine made by Siemens for Hywind, but as more opportunities open up for floating wind in favorable regions such as Japan, Australia and the US, it will be possible to use turbines at a higher capacity, provided that balance is maintained with the sub-structure, said Bull.

“Scotland has the potential to be an early global leader in floating wind,” with the capability to build a distinct skillset to export internationally, he said. Scotland’s provision for offshore wind pilot projects under the Renewables Obligation indicates that the technology is a contender for a role in the country’s program to diversify its electricity supply and strengthen its energy industry.

The following is an extract from the Q&A with Stephen Bull, senior VP for offshore wind at Statoil, published in yesterday’s Clean Energy and Carbon Brief.

Q: Assembly of the Hywind project on the west coast of Norway is scheduled for 2017. Can you outline the proposed timeline to completion?

A: We expect to have the project operational and producing power by the end of 2017, and the marine operations will kick in from this year. We are still in the process of awarding a lot of the contracts. So far we have awarded Siemens the turbine contract, Navantia will build substructures, Scottish Isleburn will fabricate anchors and MacGregor, part of Cargotec Oyj, is responsible for the mooring system.

Q: Statoil has invested EUR 214m (NOK 2bn) –representing a 60-70% cost reduction on the earlier Hywind demo project. How has this been achieved?

A: More efficient marine operations are a part of it, and we are also using a larger, 6-MW turbine as opposed to the 2.3-MW turbine we used in the demo, so from a levelised cost of energy point of view it will be more efficient. It’s also been about putting into practice some of our installation learning and measuring efficiency, use, and power yield curves from our existing operations using the 2.3-MW – thinking about its relevance in the case of a 6-MW.

Q: Does Statoil have a levelised cost of energy target for floating wind?

A: Yes, we have a clear LCOE roadmap, both for fixed and floating wind. Towards 2025, we expect floating to be competitive with fixed-bottom developments. This takes into account that fixed-bottom turbines have been through a distinct cost reduction curve of late – at least about 25% down in the past 4 years if you look at some of the projects in Europe, and particularly the UK.

The industrialisation process – larger turbines, fewer cabling arrays and better technology such as high-performance parallel and distributed computing technology [often used in managing industry clusters] will contribute to reducing cost..

Anand Gupta Editor - EQ Int'l Media Network


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