Clean-energy investment up 16% in 2014

According to numbers compiled by Bloomberg New Energy Finance, investment in clean energy and renewables rose for the first time in three years in 2014, increasing by 16% to reach $310bn compared with $270bn in 2013.


BNEF said that China invested the most in clean energy and renewables ($90bn), followed by the EU ($66bn), the US ($52bn), and Japan ($41bn). By technology/energy source, solar accounted for $150bn, wind for $100bn, and what BNEF calls “energy-smart technologies” (power storage, efficiency products, and electric vehicles) for $37bn.


BNEF said that it expected wind and solar installations to increase by a further 10% in 2015, but that the current weakness in oil prices would likely have a negative impact on investments in offshore wind and EVs in 2015.


Mark Lewis, senior analyst sustainability research of Kepler Cheuvreux, gives his opinion about this.


He says that,so far, the recent and ongoing precipitous drop in oil prices does not seem to have had a noticeable negative impact on investment in clean energy and renewables, but he thinks 2015 will be more of a challenge for the clean-energy space, especially – as BNEF points out – with regard to EVs.


That said, oil is not a direct competitor to renewables in the field of power generation (which is by far the largest use of renewable-energy technology), and most jurisdictions that are pushing renewables for power generation have price incentives in place (for example feed-in-tariffs) that protect investors from the indirect impact of fluctuations in oil prices in any case. Clearly, however, a prolonged period of low oil prices would likely have a significant negative impact on investments in EV technology, and potentially also – if it lasted beyond a period of perhaps 18 months – on the political will to support renewables more generally (at least in some jurisdictions).


For the time being, though, he remains of the view that oil prices are likely to start recovering in the second half of this year as lower prices squeeze US shale-oil producers and lead to stalling growth in shale-oil output from Q3.