Wind investments down but record H1 renewables spending – BloombergNEF

Spending on wind farms was down in the first half of 2021 due to cost reductions and policy changes, according to BloombergNEF

Finland was the top onshore wind market for investment, according to BloombergNEF (pic credit: Nordex)
Finland was the top onshore wind market for investment, according to BloombergNEF (pic credit: Nordex)

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Investments in wind farms slid nearly a third in the first half of the year, despite record amounts being spent in renewable energy and projects, according to new analysis.

Wind project investment fell from a record $85 billion in the first half of 2020 to $58 billion in the first six months of this year, according to analysts BloombergNEF.

This decrease was due to H1 2020 being a bumper period of financing for major offshore wind farms – which are typically more capital intensive than onshore wind farms – the analysts explained.

They also noted that cost reductions – especially in offshore wind – are driving investment down. Also, installations and investments surged in China and the US last year ahead of subsidies expiring.

However, overall spending in renewable energy projects and companies reached an all-time high of $174 billion in the first half of 2021, according to BloombergNEF.

This was supported by both record public market financing and record levels of venture capital and private equity commitments.

The $174 billion investment is the highest ever total recorded in the first half of any year and is up 1.8% from H1 2020, but down 7% on H2 2020.

Albert Cheung, head of analysis at BloombergNEF said: “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. 

“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.”

Promising trends

In the first half of 2021, $21 billion was invested in Chinese wind farms, according to BloombergNEF. This shows that developers are continuing to build projects without feed-in premiums, which expired for onshore wind farms at the end of 2020.

Meanwhile, 36% of investments were in Europe, the Middle East and Africa, with Finland the top onshore market in Europe.

BloombergNEF also noted that lower capital expenditure on projects could partly be explained by lower costs of wind. RWE reached financial close on its 1400MW Sofia (formerly Dogger Bank Teesside B) Sofia (formerly Dogger Bank Teesside B) (1400MW) Offshoreoff Yorkshire, UK, Europe Click to see full details offshore wind farm –  one of the cheapest projects in the UK at $2.9million/MW – in the first half of 2021.

Elsewhere, so-called ‘funds in circulation’ – which includes refinancing of renewable energy projects, mergers, acquisitions and buyouts – increased 18% to $68.3 billion in H1 2021.

Clean energy companies also raised a record $28.2 billion on public markets in the first half of the year, according to BloombergNEF. Many companies were able to issue new shares to finance growth amid market optimism at the start of the year.

Logan Goldie-Scot, head of clean power at BloombergNEF, said: “As the energy transition accelerates, investors are increasingly looking for ways to increase their portfolio exposure to renewable energy and related areas, such as energy storage and hydrogen. 

“This record first half for clean energy fundraising underlines the strength of appetite for sustainable investment opportunities aligned to a net-zero future.”

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