More money was invested in renewable energy in the first six months of 2021 than the first half of any other year as global spending hit a record high of $174 billion, according to tracking by BloombergNEF, a research firm that tracks clean energy investment by 34 of the world’s largest oil and gas producers and refiners.
The research company’s latest Renewable Energy Investment Tracker shows that this total investment, up by 1.8percent on the year, was driven by record public market financing, at $28.2 billion, and record levels of venture capital (VC) and private equity commitments at $5.7 billion.
Still, the overall investment is 7percent down compared to the figure registered in the second half of 2020.
BNEF notes that in January-June 2021 a decline in investment in new renewables was compensated for by a surge in equity offerings of sector players.
The sum raised by renewable energy and related companies on public markets represents a 509 percent surge from last year, with China Three Gorges Renewables alone securing $3.5 billion.
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When it comes to investments in wind projects, the figure surpassed $58 billion to match the levels recorded in 2018 and 2019, but still end up below the $85 billion registered in the same period of 2020. China alone saw $21 billion worth of spending on the wind in the first half of 2021.
As per solar, investments in such projects reached a record $78.9 billion, with China attracting $4.9 billion in the second quarter and $2.8 billion in the first quarter. The US, on the other hand, saw $6.4 billion worth of spending on large-scale solar projects in April-June after $5.3 billion in January-March 2021.
BNEF pointed out that the so-called “funds in circulation”, including renewables refinancing, mergers, acquisitions, and buyouts rose by nearly 18 percent the year to $68.3 billion.
In January-June 2021, investors spent $174 billion on renewable energy projects – an increase of 1.8 % compared to the same period a year earlier.
“Renewable energy investment has withstood the effects of the global pandemic, in contrast to other sectors of the energy economy, where we have seen unprecedented volatility,” said Albert Cheung, head of analysis at BloombergNEF.
He added, “however, a 1.8% year-on-year increase is nothing to write home about. An immediate acceleration in funding is needed if we are to get on track for global net zero.”
BloombergNEF’s analysis arrives two months after the 2021 edition of the International Energy Agency’s (IEA) World Energy Investment report. The report forecasts a 10percent year-on-year increase in global energy investments, bringing levels to almost pre-pandemic proportions.
Of the energy-related sectors, power generation will attract the largest sum, accounting for half of investment growth, after investment levels plateaued between 2019 and 2020.
Promisingly, the IEA believes that 70percent of the total amount that will go towards generation this year will go towards renewables. Solar and onshore wind are likely to be the most attractive options in most geographies, with average installation costs down by 10percent and 5percent respectively.
However, while $150billion was invested in clean energy in developing economies last year, the Agency believes this figure must hit $1 trillion by 2030 to deliver a net-zero world.
