Buoyed by Offshore Wind, Renewable Investments in 1H 2020 Climb 5%: BNEF

Renewable investments showed great resilience in the first half of 2020 against the economic slowdown due to the COVID-19, thanks to offshore wind energy.

Renewable energy capacity investments showed great resilience in the first half (1H) of 2020, in the face of the unprecedented economic shock caused by the coronavirus pandemic, according to the latest figures from research company BloombergNEF (BNEF). The data shows that one sub-sector of renewables – offshore wind – had by far its busiest half-year ever for final investment decisions, and this more than offset declines in investment in solar, onshore wind and biomass.

Offshore wind financings in 1H 2020 totalled USD 35 billion, up 319 percent year-on-year and in fact well above 2019’s record full-year figure (a revised USD 31.9 billion). The first half of this year saw investment decisions made on 28 sea-based wind farms, including the largest ever, the 1.5 GW Vattenfall Hollandse Zuid array off the coast of the Netherlands, costing an estimated USD 3.9 billion.

Other major offshore deals included the 1.1 GW SSE Seagreen project off the U.K., at an estimated USD 3.8 billion; the 600MW CIP Changfang Xidao array off Taiwan, at an estimated USD 3.6 billion; and the Fecamp and Saint-Brieuc projects in French waters, together totaling 993 MW and USD 5.4 billion. There were no fewer than 17 Chinese installations financed, led by the Guangdong Yudean Yangjiang Yangxi Shapaat 600 MW and USD 1.8 billion.

Albert Cheung, head of analysis at BNEF, said “we expected to see COVID-19 affecting renewable energy investment in the first half, via delays in the financing process and to some auction programs. There are signs of that in both solar and onshore wind, but the overall global figure has proved amazingly resilient – thanks to offshore wind.”

Overall investment in new renewable energy capacity (excluding large hydro-electric dams of more than 50 MW) was USD 132.4 billion in the first half of 2020, up 5 percent from a revised USD 125.8 billion in the same period of 2019. Onshore wind investment slipped 21 percent to USD 37.5 billion, while that for solar fell 12 percent to USD 54.7 billion.

Looking at the figures by location, China was the largest market yet again, investing USD 41.6 billion in 1H 2020, up 42 percent compared to the same period in 2019 thanks to its offshore wind boom. Europe secured USD 36.5 billion, up 50 percent, while the U.S. slipped 30 percent to USD 17.8 billion. Japan saw financings rise 14 percent to an estimated USD 10.8 billion, but India fell 49 percent to USD 2.7 billion and Brazil was down 26 percent at USD 2.5 billion. The Netherlands were up 231 percent at USD 6.9 billion, France up 306 percent at USD 6.2 billion, the U.K. 265 percent higher at USD 5.7 billion, Spain down 11 percent at USD 3.7 billion, and Germany up 20 percent at USD 3.6 billion.

Angus McCrone, chief editor at BNEF, said that a clearer picture of the impact of COVID-19 on green energy investment will come with the full-year 2020 figures. “Renewables have been helped by vastly improved competitiveness and by investor appetite for assets offering secure cash flows. However, project developers face the challenge that key people, whether at the permitting, financing, or construction stages, can’t meet face-to-face. And buyers of small-scale solar systems are sensitive to changes in consumer confidence.”

Overall clean energy investment, including renewables capacity financing and corporate-level equity deals, came to USD 137 billion in the first half of 2020, up 4 percent on 1H 2019’s USD 131.9 billion.