Oklahoma 2GW 'megaproject' boosts Q3 investment

WORLDWIDE: Seven wind projects, each costing between $600 million and $4.5 billion, helped clean global energy investment to jump 40% year-on-year in the third quarter, according to the latest figures by Bloomberg New Energy Finance (BNEF).

The 2GW Wind Catcher site will use 800 of GE's 2.5MW turbines

Financing the seven projects in the United States, UK, Germany, China, Mexico and Australia, which have a combined capacity of more than 5GW, helped push global investment in the clean energy sector to $66.9 billion in Q3 2017.

This figure is up from $64.9 billion in the second quarter of this year and $47.8 billion in the Q3 of 2016, according to BNEF.

The seventh most expensive wind farm investment in the quarter was $171 million more than the most expensive investment in a solar project, BNEF found.

Investment in 2017 so far is running 2% above that in the first three quarters of last year, suggesting that the annual total is likely to finish up close to, or a little ahead of, 2016’s figure of $287.5 billion.

This year looks highly unlikely, however, to beat the record of $348.5 billion reached in 2015, BNEF stated.

Bloomberg’s analysts highlighted seven large investments in wind farms totalling more than $13 billion for the rise in overall funding.

American Electric Power’s $4.5 billion investment in Invenergy’s 2GW Wind Catcher project in Oklahoma, United States was the quarter’s stand-out move, BNEF said.

The site will comprise 800 of GE’s 2.5MW turbines and a 563-kilometre single-circuit 765kV power line between Guymon and Tulsa, Oklahoma, and two new substations, according to Windpower Intelligence, the research and data division of Windpower Monthly. It is due to be completed in 2020.

The other top investments were Dong Energy’s decision to proceed with the near-1.4GW Hornsea Two offshore wind project off the east coast of England at a cost of $3.7 billion by the time of completion in 2022-23, and Northland Power’s financing of the 252MW Deutsche Bucht array in German waters, at $1.6 billion.

Dong secured a contract for difference (CfD) deal worth £57.50/MWh (€64.10/MWh) for the 1,386MW offshore project in the UK’s second auction round in September.

Northland Power acquired the North Sea site for the Deutsche Bucht project from Highland Group Holdings in August.

Two Chinese offshore wind farms — the 302MW phase three of Guohua’s Dongtai project and Zhoushan’s 250MW Putuo site at an estimated $2.1 billion — Zuma Energia’s 123-turbine 143MW Reynosa III onshore wind farm in Mexico for an estimated $657 million, and Australia’s largest wind project, the 450MW Coopers Gap site in Queensland at $631 million also contributed to the investment total.

A total $13.18 billion was invested in these seven projects in Q3 2017.

By comparison, the biggest solar project financing was an estimated $460 million for First Solar’s 381MW California Flats PV park in the United States — $171 million less than in the seventh most expensive wind farm investment in the quarter.

Types of investment

Asset finance of utility-scale renewable energy projects globally — such as those listed above — jumped 72% compared to the same quarter of last year, reaching $54.3 billion.

Small-scale project investment (solar systems of less than 1MW) came to $10.8 billion in the latest quarter, up 9%, according to BNEF’s analysis.

BNEF also tracks quarterly venture capital and private equity investment in specialist clean energy companies and equity-raising on public markets by quoted companies in the sector — both of which had subdued activity in the third quarter.

Venture capital and private equity investment was down 79% to $662 million in Q3 — the weakest quarter for this type of investment since 2005.

Investment in public markets was also subdued, down 63% year-on-year ay $1.4 billion — its lowest quarterly result since Q1 2016.

Taking all the categories of investment (asset finance, small-scale projects, VC/PE, public markets, and an adjustment for re-invested equity) together, country-level results for the third quarter included:

Country Investment in Q3 % of Q3 2016 % of Q2 2017
China $23.8 billion +35% -8%
US $14.8 billion +45% +8%
UK  $4.6 billion  +57%  +900% 
Mexico $2.8 billion n/a +84%
Germany $2.4 billion -5% -26%
Japan $2.2 billion -32% -17%
Australia $1.8 billion  +388%  -10% 
Brazil $1.7 billion +32% -4%
Argentina  $1.2 billion n/a  +151% 
India $1.1 billion -49% -60%
Chile  $1 billion  +134%  +306% 
Turkey  $796 million  n/a  +312% 
France  $631 million  +109%  -21% 
South Korea  $593 million  +143%  +85% 

Source: BNEF