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Frankfurt School-UNEP Centre/BNEF. 2016.
Global Trends in Renewable Energy Investment 2016 , (Frankfurt am Main)

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ACKNOWLEDGEMENTS ...................................................................................................................................... X
FOREWORD FROM BAN KI-MOON ..................................................................................................................... X
LIST OF FIGURES .................................................................................................................................................. X
METHODOLOGY AND DEFINITIONS................................................................................................................... X
KEY FINDINGS...................................................................................................................................................... X
EXECUTIVE SUMMARY ...................................................................................................................................... X
- Developing world ahead
- Energy abundant, competition on costs

1. INVESTMENT BY TYPE OF ECONOMY .................................................................................................... X
- Developed versus developing countries
- The leading 10 countries
- Developed economies
- China, India, Brazil
- Other developing economies
2. PUTTING SUSTAINABLE ENERGY INTO PERSPECTIVE ............................................................................ X
- Renewables versus fossil
- The ageing process
- The emissions outlook and renewables
- Box on electric vehicles
3. FOCUS CHAPTER: RENEWABLES AND STORAGE ................................................................................... X
- The need for balancing
- The storage landscape
- Behind-the-meter storage
- Policy push
4. INVESTMENT SOURCES ........................................................................................................................... X
- Debt
- Equity
- Box on innovations in 2015
5. ASSET FINANCE ........................................................................................................................................ X
- Box on large hydro-electric projects
6. SMALL DISTRIBUTED CAPACITY .............................................................................................................. X
- Box on emerging markets and small PV
7. PUBLIC MARKETS ..................................................................................................................................... X
- Yieldco rollercoaster
8. VENTURE CAPITAL AND PRIVATE EQUITY .............................................................................................. X

9. RESEARCH AND DEVELOPMENT ............................................................................................................. X

10. ACQUISITION ACTIVITY ........................................................................................................................... X

GLOSSARY ........................................................................................................................................................... X



This report was commissioned by UNEP’s Division of Technology, Industry and Economic (DTIE) in cooperation
with Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance and produced in
collaboration with Bloomberg New Energy Finance.

Angus McCrone (Lead Author, Chief Editor)
Ulf Moslener (Lead Editor)
Francoise Destais
Eric Usher
Christine Grüning

Joseph Byrne
Luke Mills
David Strahan
Rohan Boyle
Bryony Collins
Kieron Stopforth
Lisa Becker

Angus McCrone

The Bubblegate Company Limited

Moira O’Brien-Malone (UNEP)
Terry Collins
Jennifer MacDonald (Bloomberg)
Angelika Werner (Frankfurt School of Finance & Management)
Miriam Wolf (Frankfurt School of Finance & Management)

Jiwan Acharya, Michaela Pulkert, Wolfgang Mostert, Tobias Rinke, Barbara Buchner, Frederic Crampe, Tanja
Faller, Mark Fulton, Tom Thorsch Krader, Sabine Miltner, Martin Stadelmann, Federico Mazza, Valerio Micale,
Sean Kidney, Stan Dupré, Anton Eberhard, Miriam Gutzke, Rodney Boyd

Supported by the Federal Republic of Germany




... 2015............... $ per MWh and percentage change between periods... ................................................. 7 . 2015............................ $bn ..... Asset finance in renewable energy in Africa by sector....... $ per MWh ........................ 2015............. $bn ................................... 2013-2015............. $bn ...................... Average EV battery costs................... $bn ..... 2015. Figure 21......................... Figure 31....... Figure 6... and growth on 2014 ................... Figure 4....................... $bn.......................... Global average levelised cost of electricity for wind and solar. $bn .......... GW ............................................ $bn .................... Figure 28........................... Figure 22.................... Asset finance in renewable energy in Latin America (excluding Brazil) by sector........... Figure 8... Figure 19..................... 2015....... 2015................... and growth on 2014...................... Global new investment in renewable energy by region.... New investment in renewable energy by country and asset class............ 2004-2015....... and growth on 2014 ... Figure 13...................................................... Global new investment in renewable energy: developed v developing countries.................. Figure 32............................................... MW ......................................................... Global new investment in renewable energy: developed v developing countries............................. $bn................ 2004-2015............................................................ $bn............................. 2015......... Figure 23.... $bn.......................... 2015............................ Canada and Australia....... $bn ............. 2007-2015 .............................. Global new investment in renewable energy by region.... $bn .......... Figure 24.................. 2004-2015..................................................................... Figure 16................................... Global green bonds issued 2007-2015...... 2004-2015................................................ Figure 18.... $bn.................................. Figure 33.............. Asset finance in renewable energy in non-OECD Asia (excluding China and India) by sector..... Asset finance of renewable energy assets by country.......... Global Trends In Renewable Energy Investment 2016 data table........ and growth on 2014........................................... Figure 29............................................ Investment in power capacity – renewable.............................................. and growth on 2014.............................................................................................. Figure 20................. Equity raised by yieldcos and quoted project funds........................ and growth on 2014....... 2004-2015..................................................... 2015..... Renewable energy investment in the US by sector and type... VC/PE investment in renewable energy by sector........................... $bn ............. Figure 12... $bn . fossil-fuel and nuclear.. and growth on 2014 ........ Figure 34........... Renewable power generation and capacity as a share of global power.................... H2 2015 levelised cost of electricity by country and technology........................... Small distributed capacity investment by country...................... Global new investment in renewable energy: split by type of economy. $bn ......... Figure 30................... Asset finance and small distributed capacity investment by sector......... $bn .............................................................................. $bn..... Asset finance investment in renewable energy by region........... $bn ...... Figure 27. Announced energy storage projects worldwide............................ 2004-2015. 2015.................................................... Asset finance and small-scale investment by sector in China................. with storage (nominal $ per MWh) ............................................ Figure 35... $bn...... Q3 2009 to H2 2015................... and growth on 2014 ................................... Development bank finance for “broad” clean energy................. 2008-2015........... 2010 to H2 2015 ......................................... 2015......... Asset finance investment in renewable energy by type of security........... $bn........ $bn... Figure 26...... 2015................................ Net power generating capacity added in 2015 by main technology............ 2015.. $bn...... Renewable energy investment in Europe by sector.................................... Global new investment in renewable energy by sector.......................... and growth on 2014 ............................ 2015..................................................... Figure 11.... $bn ................................. 2011-2015.......................... Figure 10................................ Figure 2........... Public markets investment in renewable energy by sector... and growth on 2014............. 2015... Figure 9................. 2015.... Figure 15........ Global new investment in renewable energy by asset class.... Total electric vehicle (BEV and PHEV) sales........... Global transactions in renewable energy.................. Figure 14.............. 2015............... $bn ..................................... Figure 25... Figure 5................ $bn ...................................... and total growth on 2014........... thousands..................... India and Brazil. Figure 17....... Figure 7...... $bn................................................................... Figure 3.............. $bn ........ LIST OF FIGURES LIST OF FIGURES Figure 1.................... Asset finance and small-scale investment by sector in Japan................................

$bn .... January to December 2015 ........................... $bn .......................... Figure 55......................................................... $bn... $bn .......... VC/PE new investment in renewable energy by region............. R&D investment in renewable energy......................... Figure 53........................................ and growth on 2014.................................................. 8 ....... Figure 56.. Figure 42........................ VC/PE new investment in renewable energy by stage................. and trend in Chinese module prices ............................... 2004-2015.. $bn....... 2004-2015............................ Figure 51.......................... NYSE Bloomberg wind. $bn ........................ 2015............................... $bn .......... Figure 37.... and growth on 2014...... $bn .................................... Figure 48........ 2015.... Figure 39. by sub-sector.... NEX vs selected indices................................. $bn .................. Figure 59..................................... January to December 2015... Figure 40........................ Germany and California..... $bn ....... Figure 38...................................................... 2004-2015.................. $bn........... and growth on 2014.... Figure 57...... $bn ....... 2004-2015.......... $bn.................. 2003 to 2015 ............... 2015..................... Asset acquisitions and refinancings by region......................... 2004-2015............................ 2004-2015................ solar and EST indices.......... and growth on 2014...... 2004-2015.... VC/PE new investment in renewable energy by region....................... Public markets investment in renewable energy by sector................ 2015........................................ 2004-2015................................. Public markets investment in renewable energy by stage............ 2004-2015..................... NEX vs selected indices...... Figure 47......... 2015...... Public markets investment in renewable energy by sector.. $bn ....................................... and growth on 2014................ Figure 41. Figure 44.... $bn.................. VC/PE new investment in renewable energy by sector. Acquisition transactions in renewable energy by sector.......................... Figure 43.......................... Figure 46..................... Corporate and government renewable energy R&D by region......... Asset finance investment in renewable energy by sector.................................................. VC/PE new investment in renewable energy by sector...................... Figure 52............ 2015.. 2015. and growth on 2014... 2004-2015. $bn .. and growth on 2014.. Figure 50..... $bn ............. Small PV system cost in Japan................. 2004-2015............... 2015............................ $bn .... Figure 58........ $bn .............. Figure 49..LIST OF FIGURES LIST OF FIGURES Figure 36.............. Corporate and government renewable energy R&D by technology.... Acquisition transactions in renewable energy by type................ Public markets investment in renewable energy by company nationality.................. Small distributed capacity investment by country. Asset finance of wind and solar projects worldwide.......................... Small distributed capacity investment............ $bn .. VC/PE investment in renewable energy by stage....... 2004-2015... Figure 45.... and growth on 2014..... Figure 54....

energy-smart technologies such as smart grid. monitors investment in renewable energy. based on confirmed and disclosed included: all biomass and waste-to-energy. sector. This is or small distributed capacity. These figures are based on annual installation one million litres or more per year. geography coverage of large hydro in the Executive Summary and timing. and wind generation projects of more than 1MW. with those less than 1MW estimated Bloomberg New Energy Finance continuously separately and referred to as small-scale projects. electric vehicles and power storage – except for This 2016 report contains revisions to a number of investment figures published in the 2015 edition of Global Trends in Renewable Energy Investment. and all solar data. corporate entities. projects and investments for instance. projects. 9 . METHODOLOGY AND DEFINITIONS METHODOLOGY AND DEFINITIONS All figures in this report. meaning that renewable power and fuels and does not cover historical figures are constantly updated. Bloomberg providers. It covers many tens of thousands and in the box at the end of Chapter 5. projects and transactions in clean energy. However there is brief according to transaction type. collates all organisations. provided by industry associations and REN21. Deal values are rigorously back-checked and updated when METHODOLOGY further information is released about particular companies and projects. based on comparable transactions. and also new transactions in 2014 and before that have since come to light. all hydropower projects of between Annual investment is estimate for small-scale 1MW and 50MW. of organisations (including start-ups. banks and other investors). a dynamic process: as the sector’s visibility grows. all wave and tidal energy commercial and residential projects such as rooftop projects. venture capital and private equity Where deal values are not disclosed. The statistics used are The following renewable energy projects are historic figures. geothermal. wind or solar. Revisions reflect improvements made by Bloomberg New Energy Finance to its data during the course of the last 12 months. unless otherwise credited. information flow improves. since this technology has been mature for decades The Bloomberg New Energy Finance Desktop and is at a very different stage of its roll-out than. the box on EVs at the end of Chapter 2 and the are based on the output of the Desktop database of discussion of renewables and storage in Chapter 3. large hydro-electric projects of more than 50MW. Bloomberg New Energy Finance – an online portal to the world’s most comprehensive database of The main body of the report also does not cover investors. New deals come to The 2015 Global Trends report concentrates on light and existing data are refined. in this report. all biofuel projects with a capacity of solar. investment. projects and New Energy Finance assigns an estimated value transactions.

REN21’s annual Renewables Global Status Report (GSR) was first released in 2005. for the first time. existing equity and debt purchased by new Investment in companies setting up generating corporate buyers. in companies developing capacity through special purpose vehicles is renewable energy technology or operating counted in the asset financing figure. from R&D funding and generation. and its latest edition will be released in June 2016. 10 . Investment categories are energy generation projects (excluding large hydro). money invested by venture capital and private equity funds in the equity of specialist companies Mergers and acquisitions (M&A): the value of developing renewable energy technology. It grew out of an effort to capture comprehensively. defined as follows: whether from internal company balance sheets. or from equity capital. in parallel with tremendous advances in renewable energy markets and industries. Over the years. hundreds of reports and other documents. renewable power and fuel projects. and personal communications with experts from around the world. This excludes Venture capital and private equity (VC/PE): all refinancings. The report has become a major production that involves the amalgamation of thousands of data points. the full status of renewable energy worldwide. venture capital for technology and early-stage companies. from loans. through to asset finance of utility-scale Asset finance: all money invested in renewable generation projects. the GSR has expanded in scope and depth.METHODOLOGY AND DEFINITIONS DEFINITIONS Public markets: all money invested in the equity of specialist publicly quoted companies developing Bloomberg New Energy Finance tracks deals across renewable energy technology and clean power the financing continuum. The Global Status Report is the sister publication to UNEP Global Trends in Renewable Energy Investment.

The developing world including China. The record of $278. as Chapter 2 shows. 11 . the global emission trend n Policy support for renewables remains fickle. which lifted its investment by to solar and wind projects and to small-scale PV 17% to $102. allocations to new fossil fuel power. The of convertibles. Announced projects reached 1.6% in 2015.1 billion. and despite sharp falls in oil. exceeding the previous of offshore wind. The 2015 figure was unusually accounted for just over 10% of world electricity last lopsided. 2014’s 95GW. In 2015. at $17 billion.5 billion achieved in 2011.9 billion. the sky is far from entirely blue. It is estimated to have been $43 billion in 2015. renewable energy. down from $143 in H2 2014. systems. and late 2020s.8 billion.2 billion. however. up 11%. at the earliest. clean technologies only the years since 2008. down 21% on the weight of conventional generation capacity already previous year’s figure but close to the average for built meant that new. down 8%. The list of developing countries investing more grid. Overall. generating capacity added in wind and solar last year particularly in solar photovoltaics. in both developed countries joined it in the list of the top 10 investing countries in and remote developing country locations off the 2015. Japan attracted $36. is this year’s Focus topic and is discussed in than $500 million last year also included Morocco. the century. In the second came to 118GW. was more than double dollar a contract in January 2015 at just $58.2 billion. Chapter 3. other developing countries also raised (excluding pumped hydro and lead-acid batteries) their game – India saw its commitments rise 22% to were installed worldwide. and US manufacturer n Even though 2015 produced a record for overall and project developer SunEdison issuing $2 billion investment. coal and total. far above the next highest annual half of 2015. oil and gas India and Brazil committed a total of $156 billion. However. Mexico ($4 for storage to help balance variable renewable billion. up 151%) all electricity generation. the huge totalled $12. the Philippines. It is also economies. the global average levelised cost of figure. almost the same gas prices that protected the competitive position of as in 2014. renewables excluding electricity for crystalline silicon PV was $122 per large hydro made up 53.8 billion in 2015. 1 Investment in large hydro-electric dams is not included in that figure. as energy-related emissions are less friendly turn by the new UK government after currently rising and not forecast to peak until the the May 2015 election has been one example. up from 160MW in 2014. up 329%). However.1 billion. in line with to act for zero net emissions in the second half of the US S&P500 index. this did prevent and European quoted project funds accounting for the emission of some 1. clean unprecedented agreement among 195 countries energy shares edged down 0. while developed countries invested relying on fossil-fuel capacity for longer. down 10%). The US yieldco equity raising spree United Nations climate change conference in Paris came to an almost complete halt after July as a in December 2015. to renewables excluding large hydro-electric projects despite that continent’s record year for financings rose 5% to $285. produced an result of a sharp share price correction. which was an n Public market investment in renewable energy estimated $130 billion in 2015. Specific projects of all technologies installed in 2015.2GW. up 105%) and Chile ($3. KEY FINDINGS KEY FINDINGS n 2015 produced a new record for global investment in Uruguay.5 gigatonnes of CO2 in 2015. n Even more striking was that the amount of n Renewable generation costs continue to fall. The amount of money committed n Investment in Europe slipped 21% to $48. known as COP21. the first time it are going ahead at tariffs well below that – the has represented a majority. record-breaker so far being a 200MW plant in Dubai n Global investment in renewable power capacity1. awarded at $265. or 36% of the world total. scale PV. possible that the recent big fall in coal. The potential South Africa ($4. depressed the dollar value of investments in other with solar accounting for just over two thirds of that currency zones.9 billion. A large element in this n There is rising interest in battery storage as an adjunct turnaround was China.8 billion. thanks to its continuing boom in small- fossil fuel generation. while Brazil ($7. its highest since 2011. This record US enjoyed a 19% bounce in renewable energy was achieved despite exchange rate shifts that commitments to $44.4 billion.6% of the gigawatt capacity MWh. being built by ACWA Power International. Nevertheless. prices may tempt some developing countries to keep up 19% on 2014. Overall.9 billion of share sales.50 per MWh. $6. A remains worrying. another may be the US Supreme Court’s decision in n Last year was also notable as the first in which February 2016 to allow all legal objections to the investment in renewables excluding large hydro in Environmental Protection Agency’s Clean Power Plan developing countries outweighed that in developed to be heard before it can be implemented. $130 billion. $10.5 billion. Pakistan and Honduras. with North American ‘yieldcos’ year. some 250MW of electricity storage n However.

At the left edge of the chart are the categories relating to the backing of early-stage companies and technology. the drivers of investment in renewables. record figures and sharply up from their 2014 additions of 49GW and 46GW respectively.9 billion. See later in the Executive Summary and the Box at the end of Chapter 5 for discussion of large hydro in 2015. Figure 2 shows the make-up of the record investment figure in 2015. and solar photovoltaics 56GW. Last year saw global investment in renewables1 rise for six years now. equivalent to some FIGURE 1. $BN capacity completed in that year – the first time it has represented a majority. of the ‘green stimulus’ programmes and the German More impressive in a way than the new dollar and Italian rooftop solar booms.6% of all power generation ASSET CLASS. Total values include estimates for undisclosed deals in 2008. In 2015. Bloomberg New Energy Finance and government research and 1 Excluding large hydro-electric projects of more than 50MW. coal and gas – plummeted. causing distress to many companies involved in the hydrocarbon sector. 2004-2015.3 record of $278. So far. All this happened in a year in which prices of fossil fuel commodities – oil. 12 . Of the renewables total.3 billion last year.5 billion reached in 2011 at the peak trillion. taking it above the previous chart.EXECUTIVE SUMMARY EXECUTIVE SUMMARY Renewable energy set new records in 2015 for dollar investment. Next along is corporate Source: UNEP.2 billion *Asset finance volume adjusts for re-invested equity. GLOBAL NEW INVESTMENT IN RENEWABLE ENERGY BY 53. and that investment in renewables has 134GW of renewables excluding large hydro were been running at more than $200 billion per year commissioned. the amount of new capacity added and the relative importance of developing countries in that growth. Venture capital investment in renewables was $1. up 36% but still far behind its peak level of $3. have been more than sufficient to enable renewables to keep growing their share of world electricity generation at the expense of carbon-emitting sources. wind accounted for 62GW installed. Over the 12 years shown on the 5% to $285. the total amount committed has reached $2. some set in 2004. Figure 1 shows that investment record set last year was the result in the 2015 total was more than six times the figure terms of gigawatts of capacity added. including climate change policies and improving cost-competitiveness.

EXECUTIVE SUMMARY development spending on renewables. refinancings. also an adjustment of $5. on the right of Figure 2 is expansion capital was $2. The biggest components of investment in 2015 were asset finance of utility-scale projects such as wind farms and solar parks. There is SDC = small distributed capacity. down 21% on the previous 12 months but close to its average over the last eight years. The former was raised in the categories on the left of Figure was up 3% on the previous year at $4.4 billion. Bloomberg New Energy Finance 13 . Private equity small projects). and spending on small distributed capacity – local and rooftop solar projects of less than 1MW capacity – which was up 12% at $67. corporate level funding is equity raising by specialist renewable FIGURE 2. up 32% acquisition activity of $93. and buy-outs. GLOBAL TRANSACTIONS IN RENEWABLE ENERGY.7 billion and 2 that then ended up going into asset finance or the latter down 3% at $4. Total values include estimates for undisclosed deals.4 billion. The last part of that technology/ mergers and takeovers. at $199 billion. up 7%.8 billion last year. for reinvested equity (money that Source: UNEP. This is on 2014 but less than a third of the peak.1 billion in 2015. energy companies on the public $BN markets. 2008 figure a mix of asset acquisitions. 2015. This was $12.7 billion.9 billion. some 6% above the previous year. corporate of $6. due to rounding. Finally.8 billion Figures may not add up exactly to totals.

down 8% and their lowest development in South Africa and Morocco. were South Africa.5 billion as a affordable only in the richer parts of the world. Much more detail on the regional and excluding China. Even on a simple OECD versus non-OECD countries comparison. programme reached financial close. the latter would still have invested more than the former in 2015. $BN New investment volume adjusts for re-invested equity.5 billion. wave of projects winning contracts in its auction This has been an inaccurate view for a long time. and in tally since 2009. up 329% at $4.1 billion.2 billion.2 Developed countries invested Africa. some 12 times their figure for 2004. Investment that country has been the single biggest reason fell 10% to $7. Total values include estimates for undisclosed deals. it was not at $12. up 58% at $12. helped by project $130 billion in 2015. Mexico. some 36% $156 billion last year. investment by 30% last year to an all-time high of $36 billion.EXECUTIVE SUMMARY FIGURE 3.6 billion. up 22% at $10. of $9 billion. However. 14 . in Middle East and 2004. and was also slightly for the near-unbroken uptrend for the developing lower in the Americas excluding the US and Brazil. Renewable energy technologies such as wind and those putting the largest sums into clean power solar used to be seen by some critics as a luxury. world as a whole since 2004.8 billion. some 19% up on 2014 and of the global total. DEVELOPING WORLD AHEAD Among those “other developing” economies. it fell in Europe by 28% to $48.8 billion. GLOBAL TRENDS IN RENEWABLE ENERGY INVESTMENT 2016 DATA TABLE. Investment also increased in a remarkable 17 times the equivalent figure for the US. which Figure 4 shows that the developing world invested lifted its outlays by 17% to $102. that continent’s A large part of the record-breaking investment in lowest figure for nine years – despite record developing countries took place in China. largely due to a weaker Canadian just China – India also raised its commitment to figure. Chile and Turkey. However. 105% but 2015 was the first year in which investment in higher at $4 billion. Source: UNEP. Bloomberg New Energy Finance The regional split of investment in 2015 is shown in renewables excluding large hydro was higher in Figure 3. Indeed commitments to offshore wind projects. and developing countries $47. at renewables in 2015.1 billion in Brazil. helped by funding from 2 The definition of developing world used in this report is all non-OECD countries plus Mexico. The stand-out contribution to the rise in developing economies than in developed countries. investment to a new record came from China. and in Asia excluding China and India. India and Brazil lifted their country trends can be found in Chapter 1.9 billion. India. up 19% at $44.

151% higher at $3.3 for undisclosed deals. Chinese wind and solar projects are typically at the low end of the global cost range. 15 . GLOBAL NEW INVESTMENT IN RENEWABLE ENERGY: Investment in the developed world DEVELOPED V DEVELOPING COUNTRIES. Romania and several other countries. where there was a rush of investment in 2011 as projects and companies tried to catch the Treasury grant and Federal Loan Guarantee programmes before they expired. A third was the growing share of China in overall investment. biofuels (the and Chile. Bloomberg New Energy Finance Biomass and waste-to-energy suffered a 42% fall to $6 billion.4 billion. although not by as huge a margin as their New investment volume adjusts for re-invested equity.6 billion – both records. EXECUTIVE SUMMARY FIGURE 4. and in 2015 this process continued. more or less consistently. renewables have become more and more dominated by wind and solar. which depressed dollar figures for projects in euro. Total values include estimates in southern Europe that made for undisclosed deals. Developed volumes are based on OECD countries excluding Mexico. 2015. where allocations fell by 60% between 2011 and 2015. the fading of solar booms in Germany and Italy. when it peaked at $191 billion. since 2011. and wind a 4% boost to $109. One was the rise in the US currency. GLOBAL NEW INVESTMENT IN RENEWABLE ENERGY BY years. Solar saw a 12% increase to $161 billion. and marine (wave and tidal) a $1 billion barrier in 2015. $BN the opposite (positive) direction in Europe in recent years have been strong investment in the UK. geothermal a 23% Turkey and Uruguay also saw investment beat the setback to $2 billion. AND GROWTH ON 2014.9 billion. That big drop reflected a mix of factors including retroactive cuts in support for existing projects in Spain. $BN has been on a downward trend. and Turkey. A second was lower costs per MW in solar. The two factors pushing in SECTOR. Chile. Source: UNEP. an economic downturn New investment volume adjusts for re-invested equity. Over recent years. and the growth of the offshore wind sector in the North Sea. some 47% higher than the 2015 outturn. on the back second-biggest sector behind wind back in 2006) of a jump in solar project financings. and the big fall in the cost of PV panels over recent FIGURE 5. with the smaller sectors losing relative importance. Figure 5 shows the sector split for global investment. Bloomberg New Energy Finance issue. Morocco. 50MW a 29% decline to $3. 42% slip to just $215 million. Total values include estimates gigawatt installation figures. yen. electricity bills more of a political Source: UNEP.1 billion. 2004-2015. 3 There are several reasons why GW installations grew more quickly than dollar investment in 2015 for wind and solar. a 35% drop to $3. yuan and other currency zones. This decline has been a little to do with the US. small hydro projects of less than development bank Nafin for nine wind projects. but much more to do with Europe.

EXECUTIVE SUMMARY The split was somewhat different FIGURE 6. $BN equity funding specifically. rather than the more mature ones. many of which own projects in both solar and wind. Bloomberg New Energy Finance the sector split for their fundraisings is somewhat arbitrary. 2015. the public market figures were heavily influenced last year by equity issuance from North American ‘yieldcos’ and European quoted project funds.1 billion in Figure 7. up 58%. VC/PE NEW INVESTMENT IN RENEWABLE ENERGY BY for venture capital and private SECTOR.4 billion last year. 16 . so Source: UNEP. at $10. and biofuels – particularly second- generation based on non-food crops – come second with $523 million. Solar also took the lion’s share of public market investment in 2015. down 3%. down 69%. up 21%. However. so it is no surprise in Figure 6 to see solar dominating with $2. This type of money tends to go to the newer technologies. with wind second at $2 billion.

$BN wind and solar and the smaller clean energy sectors. Some $43 billion of large hydro-electric projects of more than 50MW are estimated to have reached the ‘final investment decision’ stage in 2015.9 billion. up 12% on the year before. up 3%. much bigger than that of wind and solar (671GW The really big financial flows to renewable energy combined). PUBLIC MARKETS NEW INVESTMENT IN RENEWABLE solar photovoltaic projects on lakes ENERGY BY SECTOR. mostly in the single- digit MW range. Perhaps more interesting was the sub-sector split with onshore wind garnering $86. plus hydro-electric dams is still. FIGURE 8.4 billion. 2015. See Chapter 5 for Source: UNEP. and just 29% of the size of solar. up 39% compared to 2014. EXECUTIVE SUMMARY FIGURE 7. reaching $148. investment comparison between ANDGROWTH ON 2014. Figure 8 shows that solar (utility-scale and small-scale) was by far the largest sector for capacity investment. while offshore wind attracted a record $23. rather than the technology development stage. at Source: UNEP. with eight of them having estimated project costs of between $1 billion and $2. down 7% on the previous year. the largest of which was biomass and waste- to-energy at $5. although of course prior decades of development mean that the installed base of 50MW- Total values include estimates for undisclosed deals.3 billion. mostly in Europe but also including a first wave of Chinese sea-based projects. RENEWABLE ENERGY ASSET FINANCE AND SMALL Figure 8 also shows the capacity DISTRIBUTED CAPACITY INVESTMENT BY SECTOR. in 2015 came as the roll-out stage. 2015. Bloomberg New Energy Finance around 925GW. The offshore wind arrays financed worldwide last year were more than 20 in number. and also between all of those and large hydro.2 billion.2 billion. This would put large hydro at 40% the size of wind in terms of new investment last year. Bloomberg New Energy Finance details. Last year saw the financing of a number of floating 17 . $BN and reservoirs. Commitments for new wind capacity rose 9% to $107 billion.

Gas does compete more directly per MWh in late 2015. and in remote regions using $96 per MWh in the third quarter of 2009 to $83 diesel generators. LCOEs vary greatly by country. The figures used here are global averages. water. as fired plants may be more difficult to finance than measured by the Brent crude contract. except technologies over a six-year period. and nuclear even longer. construction and financing. solar that has been unfolding since its high of $135 in parks in three-to-six months. depending on the resource. fell in those of cleaner technologies.71-a-barrel on 19 June concern about exposure to stranded assets and the of that year. intensifying a downward trend Wind farms can be built in nine months or so. renewables and especially solar have However. around $4. COMPETITION ON COSTS as with gas. but while gas prices in Europe equivalent for offshore wind actually increased for and Asia have fallen. whereas coal and gas 2011. renewables have their own advantages. The with wind and solar. decision-makers are unlikely to make power station choices on the basis of short-term The global energy sector has changed out of spot commodity prices. 18 .30 on Meanwhile. decline of 76%. cheaper fossil fuels have not materially also been getting more competitive. Coal also competes with renewables but.50 per MMBtu in June 2014 to $1.91 in So developing countries in a hurry for new capacity mid-February 2016. new coal- all recognition since the summer of 2014. Onshore wind in a few crude-producing countries that burn oil has seen its average global LCOE decline from to make electricity. a reduction of 14%. In addition. And. Competition between fossil fuels and renewables Figure 9 shows the change in levelised costs of is rarely a simple one-or-other choice. damaged prospects for renewables so far. but have started to come down more 4 Levelised costs of electricity include not just running costs but also the costs of development. a climate priorities of development banks.10 on 20 January 2016. as projects moved out into deeper levels. The US Henry Hub natural gas price slid from plants take several years. to $27. while fossil fuel costs have been falling. 17 February 2016. may opt for speed. The ARA coal contract dropped from $84-a-tonne on 28 April 2014 to $36.EXECUTIVE SUMMARY ENERGY ABUNDANT. Oil does not electricity4 for four different renewable power compete directly with renewable power. Oil. they remain far above US several years. given rising investor price from a high of $115.

renewables difficult to develop. technologies are explored in Chapter 3). or are resistant to. the first Contract-for-Difference auction. balance-of. In some countries. . even if the natural 16 that have seen solar projects win capacity with resource is good – small-scale solar in Turkey being bids of $64 per MWh (Fortum Finnsuurya Energy one of the many examples. There are depressed wholesale electricity prices in many The spectacular mover has been solar photovoltaics. EXECUTIVE SUMMARY FIGURE 9. plant. far from it. Two contracts for offshore wind were awarded at 14% and 18% below the officially-set strike price. and auctions in India in winter 2015. In South Africa. variable wind and solar generation. Average costs were around $174 per variable generation can be balanced. in Rajasthan) and $68 (SunEdison and Softbank in Andhra Pradesh). None of this means that all obstacles for renewables have gone away. local is an advance guard of projects taking place in financing options are plentiful.50-per-MWh tariff in some jurisdictions have local regulations that make January 2015. developed countries that are making it difficult to the biggest single sub-sector in renewables. GLOBAL AVERAGE LEVELISED COST OF ELECTRICITY FOR for onshore wind at 11% below WIND AND SOLAR. the second PV auction in 2015 awarded contracts 7. In the UK. in others they are particular countries now at much lower figures – few and far between – the sources of finance for examples including the ACWA installation in Dubai renewable energy are discussed in Chapter 4. a drop of 61%. There is a lack of silicon PV has plummeted from $315 per MWh investor confidence in a number of significant in Q3 2009 to $122 in late 2015. from Ukraine to Spain. for instance. countries because of past political events or reflecting deflation in module prices. Many governments in developed and developing countries are moving towards auctions as a way of awarding capacity to renewable energy developers at relatively keen prices – continuing a trend that was discussed in last year’s Global Trends report. Q3 2009 TO H2 2015.5% below the previous feed-in tariff level. and how it MWh in the second half of last year. make a return on investing in any new generating The average global levelised cost for crystalline. energy policy decisions. back in 2011. the 2015 auctions awarded contracts to onshore wind at 41% less in local currency terms than the first auctions. plant costs and installation expenses. And that went ahead with a $58. renewable or otherwise. Source: Bloomberg New Energy Finance Then there are concerns in many developed economies about how recently. held in February 2015. And there and Argentina to Greece. The LCOE for can be guaranteed that the lights will stay on (the solar thermal parabolic trough plants has hardly subject of balancing and the potential of storage changed and remains around $275 per MWh. In Germany. Challenges include national electricity monopolies in some developing countries that are not familiar with. saw winning bids 19 . $ PER MWH what was available under the preceding green certificate regime.

developing countries are generally those with fast-rising electricity demand New investment volume adjusts for re-invested equity.4 billion. Mexico doubling to $4 billion.9 billion.2 billion. and India on $10. Commitments by the developing world amounted to $155. the “big three” of China. India and Brazil saw investment rise 16% to $120. Germany recorded $8. up from $131. DEVELOPED VERSUS DEVELOPING FIGURE 10. Total values include estimates for undisclosed deals. n Three “new markets” completed the top 10 investors – South Africa up 309% to $4. and Turkey. with the dollar commitment at $155. followed at a distance by the UK with $22. up 22%. up 19%.5 billion. new generating capacity.5 billion.1 billion. Developed volumes are based on OECD countries excluding Mexico.CHAPTER 1 INVESTMENT BY TYPE OF ECONOMY n Developing economies jumped ahead of developed countries for the first time in 2015 in terms of total new renewable energy investment.2 billion. representing well over a third of the global total. for the first time. while those by the developed world slipped 8% to $130. 2004-2015. GLOBAL NEW INVESTMENT IN RENEWABLE ENERGY: ECONOMIES SPLIT BY TYPE OF ECONOMY. Bloomberg New Energy Finance hand. and Brazil $7.2 billion. this shift is unsurprising – after all.1 billion. its $36.9 billion. investment in developing economies out-weighed investment in developed countries. while “other developing” economies enjoyed a 30% bounce to $36. down 47%. $BN Last year was a signal year for renewable energy because. The US was a distant second. compared to $141.2 billion.1 billion. On the other Source: UNEP. n Within the developing-economy category. down 11%. In one way. and therefore likely to need the most Chile.1 billion (see Figure 4 and discussion in the Executive Summary). its $102. n The share of global investment accounted for by developing countries rose from 49% in 2014 to 55% in 2015. up 25%. level with 2014.1 billion.9 billion for 2015. Developed economies invested $130. non-hydro renewables have been 20 . n China was by far the largest investing country for renewables excluding large hydro. and Chile rising 143% to $3. as its auction programme crystallised into financed projects. n Japan was a clear third in the ranks of investing nations.6 billion in 2014. with $44. up 19% to a new record. up 17%.5 billion the previous year.

and mainly thanks to China (see below). or CSP. right up to 2014. Includes estimates for small distributed capacity. Germany and nations also dominated last year.9 billion the US. Finally. at $2.1 billion in developing developing world in recent years. Figure 11 as Indonesia and Kenya. down to less than $1 billion. Bloomberg New Energy Finance growing in importance too. The gap reached countries. Chile. India and Brazil. but also in the US. The the “big three” saw investment rise 16% to $120. while the wealthier countries have in many cases rowed back on subsidy support for renewables out of concern over the effect on electricity bills. 21 . What has changed in the last couple of years is that the much reduced cost of solar and wind technology has made projects viable in resource- rich emerging economies. in to some extent solar thermal. continuing a pattern seen in recent years. and the corporate and government research and development spending in biofuels. with $3. although the former are a huge part Chile. investment in biofuels company. there was reduced investment generally but most of what there was took the form of On the other technologies. while “other developing” The US and Europe have recently taken most of the economies enjoyed a 30% bounce to $36. as China. deployment. with the chart showing $67. such and Japan. There was asset finance of projects in $25. and Turkey. $BN subsidy support for deployment. Italy that had seen big financings in previous years. developing countries continued to be dominant. Brazil and India.2 billion in 2015. 2015. Wind. the developing world is split into two – the “big three” of China. India. the developed developed countries such as Denmark. with developed economies dominating with asset investment in those developing countries the successive small-scale booms in Germany. the latter are Source: UNEP. to just over double that in developing nations in 2014. against $42. New investment volume adjusts for re-invested equity. Figure 11 examines the investment comparison by technology. originally pioneered in In biomass and waste-to-energy. funding for second-generation ethanol companies also a record. GLOBAL NEW INVESTMENT IN RENEWABLE ENERGY: the last 30 years or so. In Figure 10. corporate and developing” countries. the gap between developed and developing countries on solar investment was In small hydro projects of less than 50MW. Developed countries were even more dominant in geothermal in 2015. shows that in 2015.1 billion.2 billion in developed nations.1 billion. It shows that government R&D. and “other Total values include estimates for undisclosed deals. marine. There was a pause in solar. and the billion of commitments in developing countries largest chunk of project spending was in Europe. with the largest project An even more striking change has happened in financing being in Turkey. South Africa and other nations ramped up PV. amounted Europe and Australia.4 China. Developed volumes are based on OECD countries excluding Mexico. and some of DEVELOPED V DEVELOPING COUNTRIES. However. has seen a preponderance of activity in the of investment versus $2.2 billion in 2015.and project-level fundings in northwest in developed economies. Figures 10 and 11 look at the developing versus developed country split in two different ways. of global investment. AND TOTAL those nations provided generous GROWTH ON 2014. CHAPTER 1 pioneered in richer countries over FIGURE 11.

And India REGION. Oceania excluding China and India saw investment reach $47. Total values include estimates for undisclosed deals. to a record investment in dollar terms back in 2011. Bloomberg New Energy Finance Figures 12 and 13 highlight the different Of the remaining large geographical areas in Figure trajectories of renewable energy investment by 12. Source: UNEP. the US saw investment pick up in the last two region in the 2004-15 period.5 billion in 2015. 2015. which invested just $3 billion owed most to solar – both utility-scale and rooftop. The strongest and years to reach its highest since the peak of “green most consistent upswing in dollar commitments stimulus” spending in 2011. but behind this has been a general upward trend in Spanish-speaking Latin America and volatile year-on-year figures from Canada.CHAPTER 1 FIGURE 12. recorded its biggest year for another two and half times by 2015. The Americas excluding the US and Brazil have seen investment bobbing around the $10 billion to $13 billion range since 2010. The Middle East and Africa saw investment gather pace from less than $1 billion in 2004 to a record $12. $BN New investment volume adjusts for re-invested equity.3 billion.9 billion. Other regions have not trodden seen sharp falls since then. The latest spurt has has come in China. then multiplied this 13-fold by 2010 and Europe. This was slightly less than the previous year’s $48. $BN enjoyed a second-successive year of increasing investment. New investment volume adjusts for re-invested equity. with 2015 the lowest quite such a consistent upward path. thanks partly to South Africa’s successful auction programme. in 2004. GLOBAL NEW INVESTMENT IN RENEWABLE ENERGY BY REGION. and has $102.8 billion but far FIGURE 13. Total values include estimates for undisclosed deals. Bloomberg New Energy Finance 22 . figure since 2006. GLOBAL NEW INVESTMENT IN RENEWABLE ENERGY BY above 2004’s $7. Source: UNEP. meanwhile. although Asia. breaching the $10 billion for the first time since 2011.6 billion in 2015 (largely thanks to Japan). 2004-2015.

2015. and FIGURE 15. and Japan for small-scale PV funding. and Chile appears in the big league for the first time. China heads the list for asset finance. while South Africa re- entered the top 10 at ninth. SMALL DISTRIBUTED CAPACITY INVESTMENT BY but remained at less than half peak COUNTRY. Details of many of these shifts at the country level are explored in the next section. which saw a sharp fall in investment (see section below). Includes corporate and government R&D position it took for the first time Source: UNEP. Brazil maintained COUNTRY. NEW INVESTMENT IN RENEWABLE ENERGY BY COUNTRY AND ASSET CLASS. AND GROWTH ON 2014. and with asset finance and small-scale projects (in its case. Bloomberg New Energy Finance 23 . $BN eighth place. *Asset finance Italy and Spain. The next largest investing nations last year were the US and Japan. where it recovered a little in 2015 FIGURE 16. has shrunk to a fraction of its level Source: UNEP. Top 10 countries. Top 10 countries. AND GROWTH ON 2014. India moved up above Germany. where investment volume adjusts for re-invested equity. accounting for more than a third of global commitments. Bloomberg New Energy Finance a few years ago. where investment slipped back last year. after dropping out in 2014. Figures 15 and 16 identify the top countries in terms of asset finance and small-scale project investment. *Asset finance volume adjusts for re-invested equity. Bloomberg New Energy Finance in 2014. ASSET FINANCE OF RENEWABLE ENERGY ASSETS BY into fifth place. $BN The top 10 investing countries in renewable energy excluding large hydro are displayed in Figure 14. with the UK maintaining the fourth Top 10 countries. and Australia. Notable countries that failed to make the top 10 in 2015 but had featured there in previous years included Canada and France. Total values include estimates for undisclosed deals. AND GROWTH ON 2014. Represents investments in solar PV projects with capacities below 1MW Source: UNEP. distribution- grid-connected solar rather than rooftop PV) the two main types of investment. 2015. $BN (2011) levels. China led the list for 2015 by a large margin. with a 10th place slot. 2015. CHAPTER 1 THE LEADING 10 COUNTRIES FIGURE 14.

Bloomberg New Energy Finance DEVELOPED ECONOMIES The US has not been the largest investing country Prairie wind farm in Nebraska. RENEWABLE ENERGY INVESTMENT IN THE US BY SECTOR AND TYPE. a deal Power. Figure 17 shows that venture capital The main factor behind the timing of US renewable and private equity finance for renewables in that power plant investment has been. at an estimated in renewable energy in any year since 2011. and were reinstated for just two weeks in Taking a high profile among the large deals in these mid-December 2014. but $560 million. its highest for two years. because of the opposition assets (see discussion in Chapter 4). and wind seeing a 24% gain to $10. perhaps ever. 24 .6 billion.2 billion. could lead to an incremental $73 billion in wind and solar investment in the 2016-21 period. The incentives lapsed at the end of 2013. the highest since 2011.7 billion in 2015.4 billion via a secondary share issue. 21 December 2015.4 billion in 2015. it remains the biggest in terms of company-level funding. TerraForm Global. the solar manufacturer and project developer. and not expected to set up to own operating-stage renewable energy be revived. the for specialist companies on public markets rose by Production Tax Credit for wind and the Investment the same percentage to $9.1 The other big issuer of equity last year in the US was SunEdison. sharp downgrading of yieldco share prices in the and a bigger jump in utility-scale solar investment. The that raised a total of $5 billion on the stock market on-off saga on the tax credits during 2014 helped in the first seven months of 2015. Bloomberg New Energy Finance has fundraising to just $300 million in the last five estimated that the latest. for many years. It raised a total of $2. TerraForm of many politicians in Congress. costing an estimated $744 million. and this reduced their additional of 37%. convertible issues and some private equity capital for a subsidiary specialising in small-scale PV installation. with solar seeing a 37% increase to $13 billion. $BN Source: UNEP.CHAPTER 1 FIGURE 17. NRG Yield. for almost the whole of 2015. country rose 41% to $2. Tax Credit for solar. Pattern Energy and in December 2015 surprisingly included a clause NextEra Energy Partners were among the yieldcos extending the PTC and ITC for a full five years. Among the big projects getting money last year were 294MW Silver State South PV plant in Nevada. However. 8Point3 Energy Partners. and the 400MW Grande 1 Bloomberg New Energy Finance: Tax extensions for US wind and solar. 2015. third quarter. five-year extensions months of the year. Abengoa on general government funding on Capitol Hill Yield. Asset finance of utility-scale renewable energy projects in the US rose 31% to 24. while share issues the state of play on the two key tax incentives. There was a drive a 24% rebound in wind asset finance in 2015. Then they were unavailable categories were equity issues by US “yieldcos”.


2015, $BN

Source: UNEP, Bloomberg New Energy Finance

Europe kept ahead of the US in terms of renewable offshore wind financings, of $2.1 billion for the
energy investment in 2015, but only by a nose. A 402MW Veja Mate project, and $1.3 billion for
breakdown of its $48.8 billion total, down 21% on the 332MW Nordsee 1. Onshore wind saw a sharp
the previous year, is shown in Figure 18. Nearly half fall in commitments, reflecting a tightening in
of the continent’s tally last year ($22.2 billion, up planning rules, and uncertainty ahead of a move in
25%) came in just one country – the UK. 2017 from guaranteed tariffs to auctions.

2015 was a bumper year for UK offshore wind The only other European markets to see
‘final investment decisions’, with the 580MW investment of more than $1 billion in 2015 were
Race Bank project, the 336MW Galloper array, France, down 63% at $2 billion, Turkey included
the 400MW E.ON Rampion project and the two in the developing country total, up 46% at $1.9
330MW parts of Walney Island Extension all billion, and Netherlands, down 82% at $1.1
reaching that milestone. Together, they amounted billion. The drop in French investment last year
to an estimated $10.5 billion of capital spending, was a function partly of the sector waiting for the
this flurry reflecting in part the impending expiry energy transition law, which was promulgated at
of the UK’s Renewable Obligation support scheme the end of 2015, and partly of residual uncertainty
in 2017. The fact that a majority Conservative over the onshore wind feed-in tariff, not cleared
government was elected in May 2015 may also have up until a decree by the European Commission
convinced some developers to get on with their in July. Finally, the existing tariff system for solar
projects rather than relying on future auctions that incorporated a ‘degression’ mechanism that led to
might or might not happen. sharp reductions in support for new projects not
taking part in the auction programme.
Offshore wind was not the only focus of activity in
the UK, however. There were significant projects Turkish wind investment was $941 million,
in onshore wind, such as the 239MW Kilgallioch some 19% less than in 2014, and there was one
installation in Scotland, costing $468 million; in large geothermal project financed, the 170MW
biomass with undertakings such as the 40MW Guris Efeler plant. Of the other large European
Tilbury Green Power plant, costing $263 million; countries, Italy saw renewable energy investment
and in utility-scale solar, one notable example of just under $1 billion, down 21% on 2014 and
being the 85MW SunEdison UK PV portfolio. There far below the peak of $31.7 billion seen during
was also a continuation of the small-scale solar the PV boom of 2011. Retroactive cuts to feed-in
surge, with $1.8 billion of investment, up 29% on tariff support for solar helped to dampen investor
2014 – spurred on by the prospect of cuts in the interest in Italy last year. Spain, scene of particularly
feed-in tariff. painful retroactive revenue cuts imposed by the
government during the 2011-14 period, and the
Germany was the second biggest European market end of all support for new projects, saw investment
for investment in renewables in 2015, but its tally of just $573 million in 2014. This was marginally up
of $8.5 billion was the lowest for at least 12 years. on the previous year but miles below the $23.6
This would have been lower still but for two large




*Asset finance volume adjusts for re-invested equity
Source: UNEP, Bloomberg New Energy Finance

billion peak of 2008.

Among other developed economies, the markets CHINA, INDIA, BRAZIL
that attracted $1 billion or more of investment in
2015 were Japan, at $36.2 billion, level with the Figure 20 shows the detail of the increase in
previous year; Canada, at $3.1 billion, down 49%; capacity investment in 2015 in the three largest
Australia, at $2.4 billion, up 16%; and South Korea, developing economies – China, India and Brazil.
down 44% at $1 billion. A breakdown of asset The biggest jump in dollar terms came in China,
finance and small-scale project commitments for with $14.7 billion of additional asset finance and
the first three of these countries is shown in Figure $2.5 billion of extra small-scale project funding;
19. but both Brazil and India managed to post higher-
percentage gains, at 40% and 33% respectively
The mainstay of the Japanese renewable energy compared to China’s 20%.
push remains small-scale solar, typically ground-
mounted projects of less than 1MW. This type of Offshore wind finally had a breakthrough year in
investment rose 13% in 2015 to $31.7 billion, its China in 2015, with no fewer than eight projects
highest annual figure yet, helped by the country’s financed, for an estimated cost of $5.6 billion. They
relatively generous feed-in tariff. In October last were still on the small size compared to the bigger
year, the Ministry of Economy, Trade and Industry arrays being built in German, British, Belgian and
proposed several policy options to provide support Dutch waters of the North Sea, but they were
for PV in the future. These included a constant-rate significant enough to sit near the top of the list of
annual reduction in the tariff, a flexible reduction Chinese renewable energy financings of the year.
rate depending on the amount commissioned, and They included three 300MW projects, all with an
an auction programme. estimated capital cost of around $850 million –
the Longyuan Haian Jiangjiasha, the Datang and
Japan, Australia and Canada all saw a few Jiangsu Guoxin Binhai, and the Huaneng Rudong
significant asset finance deals in 2015. These H12 Baxianjiao.
included the 240MW, $390 million Ararat wind
farm in Victoria, the 96MW, $354 million Pacifico They may have been trumped marginally, in
Energy Miyazaki Hosoe PV plant in southwest terms of dollars committed, by one solar thermal
Japan, and the 184MW, $324 million Meikle wind project, the 200MW Qinghai Haixi Geermu
farm in British Columbia. Wutumeirenxiang Boliqi. But the greatest weight

ON 2014, $BN

*Asset finance volume adjusts for re-invested equity
Source: UNEP, Bloomberg New Energy Finance



of utility-scale financings continued to be in
onshore wind, with $42 billion secured, up 9% on
2014, and in PV, with $43 billion, up 18%. Notable
projects included the SDIC Hami Jingxia Number 5
wind farm, at 300MW, and the Dexin Taihe Dezhou
Lingxian Yongzhou PV plant, also at 300MW.

In onshore wind, China is estimated to have
commissioned a giant 25GW of capacity in
2015, as developers rushed to complete projects
in regions where the feed-in tariffs are being
reduced. The country, beset with the problem of
urban pollution, announced a record number of $5 billion-plus figures of 2010 and 2011. One of
pre-approved projects for commissioning in 2015- the largest projects financed was the Hero Andhra
18, and an upward revision in the government’s Pradesh project, at 150MW, but there were a
capacity target for 2020 is also expected. Grid sizeable number of others both sides of the 100MW
congestion may, however, slow the build-out mark. Project development times have been longer
somewhat compared to the bumper total added in than expected in India of late, and some wind
2015. developers have diversified into solar, perhaps
seeing a bigger opportunity there. There could
In PV, China is likely to have installed some 16GW be a rush in the wind sector in 2016, however, as
of new capacity in 2015. There was no cut in feed- accelerated depreciation and generation-based
in tariffs scheduled for the end of the year, so no incentives are due to expire in March 2017.
repetition of the late 2014 commissioning rush.
However, the National Development and Reform Brazil saw record wind asset finance, of $5.7 billion
Commission was reported to be considering new in 2015, up 46% on 2014. Meanwhile, solar project
tariff reductions in the run-in to 2020, and if so the financings came in at $657 million, the first year
approach of these could influence the future build- they have reached the hundreds of millions and
out rate. potentially marking the start of a big new market
for PV. Two of the largest projects receiving an
The highlight of India’s performance in 2015 was investment decision last year were the 260MW Enel
a jump in solar financings to $4.6 billion, up 75% Ituverava PV portfolio and the 144MW Eletrosul
on the previous year, albeit still a little below Chui wind portfolio. There was one significant
the 2011 record of $4.9 billion. Among the big financing in biomass, with Klabin expanding
projects getting the financial go-ahead were the its Ortiguera plant to 300MW as part of a $2.3
NTPC Kadiri PV plant phase one, at 250MW, and billion investment that also included a cellulose
the Adani Ramanathapuram PV installation, at production plant.
Some 2GW of new wind capacity are estimated
Capital costs for PV projects in India have fallen to to have been installed in Brazil in 2015. Delays in
among the cheapest in the world, at around $1.1 the building of new transmission links limited this
million per MW, and in January 2016, an auction in figure, and for the first time wind failed to win the
Rajasthan for 420MW of capacity produced winners majority of tariff contracts awarded in the country’s
at tariffs of just six US cents per kWh. The country auctions, losing that leadership to PV. In addition,
has a 2022 solar target of 100GW, equivalent to development bank BNDES reduced the debt
some 12GW per year, far above its 2015 installation percentage it is prepared to offer projects. This
level of around 3GW. It is pursuing this target via may force developers to look for other borrowing
auctions. options, including bonds. Solar should see a sharp
upswing in financings this year, as some 2.1GW of
In wind, the $4.1 billion of asset finance in 2015 auction-winning projects from 2015 secure debt
was 17% up on the previous year but below the and equity providers.




Africa is one of the most promising
markets for renewable energy
over the next 10-20 years, with its
growing population, urgent need
for new generating capacity, lack
of electricity access in remote areas,
and its natural resources in sunshine,
wind, biomass and geothermal.
Figure 21 shows, however, that the
march of utility-scale renewables is
happening unevenly so far.

By a big distance, the two biggest Investment volume adjusts for re-invested equity.
centres for asset financings in *Includes the Kashimbila small hydro plant whoes financing was confirmed after the
global investment totals had been compiled
2015 were South Africa, which saw Source: UNEP, Bloomberg New Energy Finance
investment rebound back up to
$4.5 billion from $1 billion in 2014, Corporation and Overseas Private Investment
although it remained below its $5 billion-plus Corporation of the US.
figures of 2012 and 2013; and Morocco, where
investment leapt to $2 billion from almost nothing Kenya attracted $357 million in 2015, well down on
in 2014, thanks largely to the 350MW NOORo solar the 2014 figure of $1.1 billion that was buoyed up
thermal portfolio. This made it a record year for by the financing of the Lake Turkana wind project.
the North African kingdom, beating its 2012 tally The only other countries beating the $100 million
of $1.8 billion. mark were Uganda, with a record $134 million,
and Ethiopia, recording exactly $100 million, well
In South Africa, much of investment last year below its record of $839 million in 2013.
happened in the first quarter, with the delayed
financial close of the remaining projects from One caveat should be added to the African
the Round 3 auctions. In June, the government investment figures. Figure 21 shows asset finance
in Pretoria launched a tender for an additional only, but there was also significant activity in small-
1.8GW for its renewables programme. One of the scale PV systems in 2015, with Kenya just one of the
signal deals later in the year was the financing in early movers. At the time Bloomberg New Energy
September of the 100MW Redstone solar thermal Finance’s 2015 data were collated, in January 2016,
project for an estimated $756m, helped by loans it was almost impossible to determine how much
from the World Bank’s International Finance was spent on small-scale PV in specific African
countries, although the research firm estimates
that it was several billion dollars for the Africa and
Middle East as a whole. So the total renewable
energy investment figures for particular African
countries may well be revised up in the months
ahead, as more information becomes available.

Figure 22 shows the leading countries in renewable
energy asset finance last year from Latin America
excluding Brazil. Three countries surpassed the
$1 billion barrier – Mexico, with asset finance up
109% at $3.9 billion, Chile with $3.4 billion, up


Costa Rica and Guatemala. AND down 27%. 2015. AND records: Mexico and Chile by a big GROWTH ON 2014. and Uruguay with $1. The country is by a large margin the leader in solar development in South America. GROWTH ON 2014. Chile’s auction in October for around 500MW of capacity saw PV project bids coming in below wind farm bids. 2015. $BN margin. $BN down 49%. including FIGURE 23. up 77% on the previous much lower asset finance totals than in some year. Desert Tech (180MW) of particular financings rather than a downward and China Zonergy (900MW). Among the investors years. The Source: UNEP. at $155 million. This could be a precursor to much larger earlier years.1 billion. Vietnam is the focus for both wind figures in the future. including the Investment volume adjusts for re-invested equity 73MW Energy Serve Tabkang 1. In Indonesia’s 29 . Some other countries failed to match Investment volume adjusts for re-invested equity Source: UNEP. and Panama. ASSET FINANCE IN RENEWABLE ENERGY IN ASIA Honduras. both attained of asset finance in 2015. Uruguay narrowly. FIGURE 22. $BN. CHAPTER 1 141%. $BN. Peru. all of which invested less than $100 million. down from figures of around half a billion each in 2014. given that country’s need for and solar project development. Thailand was the only country other than Japan to reach $1 billion in asset finance for renewables excluding large hydro (see Figure 23). which has become an active market for both wind and solar in recent projects of up to 1GW in size. Bloomberg New Energy Finance commitments to utility-scale projects achieved in earlier years. It saw the go-ahead last year on several PV projects either side of the $100 million mark. Thailand’s total of exactly that figure being 162% up on 2014. All three were AMERICA (EXCLUDING BRAZIL) BY COUNTRY. shift in its investment trend. but this did not new power capacity and the plans afoot for PV lead to large-scale financings in 2015. In Asia outside China and India. Bloomberg New Energy Finance Philippines. (EXCLUDING CHINA AND INDIA) BY COUNTRY. at $567 million in 2015. Some of the projects under way in Chile are linked to mining facilities in the north that have restricted or no access to main grids.3 billion of commitments to that technology in 2015. ASSET FINANCE IN RENEWABLE ENERGY IN LATIN up 25% on the year. saw a 41% dip in asset finance to $798 announcing specific project proposals last year million last year – more likely reflecting the timing were Scatec Solar (150MW). with $2. with asset finance of $248 Pakistan was the scene for a record $723 million million and less than $100 million. Vietnam and Indonesia.

the fact that most of the world’s power generation fleet consists of fossil fuel plants. n Its contribution to global electricity generated was lower.1% in 2014. at 10.3% of global of established power capacity last year. compared to 49% in 2014 and 40. The CO2 content of the atmosphere looks set to rise sharply beyond the 2015 average of 401 parts per million. means that the outlook for emissions and the climate remains worrying. EVs. However.2% in 2014. Capacity and generation based on Bloomberg New Energy Finance totals. n Leading forecasting organisations project that power sector emissions will grow more than 10% between now and 2040. solar and other renewable energy technologies made a much smaller impact on the mix of electricity Renewables figure excludes large hydro. n Improved figures for dollar investment show that renewables attracted more than double the $130 billion committed to new coal-. and that more of these are being added every year.6%. 2007-2015 % RENEWABLES VERSUS FOSSIL Renewable energy excluding large hydro accounted for the majority of gigawatts of new generating capacity installed in 2015 – for the first time ever. These jumped 60% in 2015 to a new record of 462. gas. FIGURE 24. Figure 24 also shows that the weight of the capacity already installed in fossil fuels meant that 2015’s additions of wind. Source: Bloomberg New Energy Finance Renewables excluding large hydro made up 16.6% of the new power generating capacity installed in 2015. This prevented the emission of an estimated 1. n One factor that could affect both emissions and electricity demand over the next 25 years is the growth of electric vehicle sales.2% in 2013. RENEWABLE POWER GENERATION AND CAPACITY AS A SHARE OF GLOBAL POWER. with no prospect of a peak being reached until the late 2020s at the earliest. They accounted for 10.3%. This was the largest differential in favour of renewables to date. via the recharging of their batteries. n Nevertheless. generated worldwide last year. the first time it has ever represented the majority of additions. Last year’s percentage was 53. up from electricity generation – the difference between 30 .CHAPTER 2 PUTTING RENEWABLE ENERGY INTO PERSPECTIVE n Renewable energy excluding large hydro made up 53.5 gigatonnes of CO2 last year. could also offer new opportunities for balancing renewables output. from 9.2% 15.000.and oil-fired power stations in 2015.

3% share of global generation means that use of specific country-level capital cost estimates renewables excluding large hydro prevented the for new coal and gas capacity. geothermal. geothermal and biomass. 3 Note that the 134GW of renewables excluding hydro shown in Figure 25 will not produce exactly the 53. This was far higher than the fossil fuel power figure of $130 billion gross investment. after taking into account closures. nuclear and large hydro) as the since the net amount being added is a fairly widely other 89. NET POWER GENERATING CAPACITY ADDED IN 2015 large hydro saw some 134GW BY MAIN TECHNOLOGY GW commissioned. Renewables excluding large hydro attracted $265. this means that the gross amount being added before closures must be lower. This is estimated using figures for total case of coal.8 billion of asset finance and small-scale project investment in 2015. Renewables excluding FIGURE 25. hydro. and 40GW of gas-fired generators. nuclear. extrapolated to 2015 years and has also got by some margin the lowest according to the IEA’s average 2013-20 average average capital cost per GW for new coal capacity.6% share of new capacity added shown in Figure 24. reflect two main improvements in methodology. CHAPTER 2 Figure 25 shows the comparison between the amounts invested in new capacity in the four main power technology categories. One is that the fossil fuel figures in this report make The 10.5 gigatonnes of CO2 equivalent average. drawing on a database of deals and projects. oil. annual growth rate. Note that the IEA’s report includes an estimate that renewables including large hydro “helped avoid” 3. with 62GW of that wind. which are bottom-up. which shrank in 2015.1 accepted figure. with hydro (large and small) responsible for about three quarters of this. Note that Bloomberg New Energy Finance has made substantial revisions to the estimates for those percentages reflecting the fact that wind gross investment in fossil fuel generation since the and solar generate power for a lower percentage 2015 edition of the Global Trends report. Another 22GW consisted of large hydro-electric projects.4 added last year is displayed in Figure 25. 2 Net figures. gas. oil. 4 The fossil fuel investment estimates are based on a top-down methodology. rather than a global emission of 1. More concerning in climate terms was that there were a net 42GW of coal- fired capacity installed last year. because China has been the largest power sector emissions from the International installer of coal-fired power stations for many Energy Agency for 2013. and More detail on the breakdown of the gigawatts hence gross investment must be lower. excluding the small amount going to biofuels. These of the year than other sources such as coal. and because Figure 25 does not show oil-fired capacity. gas. unlike the renewable energy investment figures in this report.7% of generation.1 gigatonnes of emissions in 2013. 56GW of photovoltaics and more modest amounts of biomass and waste-to-power.2 3 Source: Bloomberg New Energy Finance 1 Power sector emissions data are from IEA World Energy Outlook 2015. and assuming that – if that The second change is that the analysts involved renewables capacity did not exist – the equivalent have reduced their estimate for the amount of coal electricity would have been produced by the same and gas capacity going out of service each year – mix (coal. This is because of roundings to the nearest GW. solar thermal and small hydro. This makes a lot of difference in the last year. and there were an estimated 15GW of nuclear power added in 2015. 31 . See discussion in the section on “ageing process” below.

and that this had increased to around 1. $BN fossil fuel capacity investment is now only about half as high over the last three years as that for renewables excluding large hydro. a cost profile that is much more spread-out during project life. If many construction stage and. and that proportion – of world coal-fired power station for coal. assuming Of the other two generation sources in Figure 26.4GW of wind power capacity and the transport and handling of that feedstock. with the upfront capital cost a much TAccording to the Global Wind Energy Council. and that since then the former has been increasing its dominance. INVESTMENT IN POWER CAPACITY – RENEWABLE. This must mean that One of the major differences between the non. nuclear and hydro. not The age profile of fossil fuel power stations is more the dollars sunk over recent years in new capacity slippery. because of a shortage of data using the same methodology for years before that. there were just 17. But it would appear likely from the chart that there was an investment “crossover” between renewables excluding large hydro and fossil fuel in about 2008 or 2009. for modest during the operating stage – because instance.CHAPTER 2 The upshot of these changes is FIGURE 26. Source: Bloomberg New Energy Finance In one way. Well over half of the world’s wind fleet is less than six years old and. This will have an impact on the have 40-year lifetimes.9TW by 2015. it will influence the chances of heavily concentrated at the development and the world getting emissions under control. is the age of the capacity is less than 23 years old. As with the other installations worldwide is even more youthful. in place for decades. has ‘retirement’. has a large hydro took $43 billion of asset finance (see good 14 years left to operate – even excluding Box at the end of Chapter 5 for more discussion). however. the nuclear figure is the value of new projects getting the go-ahead last year. The fossil fuel line is only shown for the years since 2012. a turbine lifetime of at least 20 years. gas. by comparison. in the case and small hydro) have lifetime costs that are of fossil fuel plants. at least half – and possibly a significantly higher hydro renewables capacity in the world. 2008-2015. very hundreds of gigawatts of existing coal capacity. to 432GW by 2015. lower fraction of the total and the feedstock itself. since large amounts of capacity have been that came online during 2015. The age profile of PV investment decisions’ in 2015. The World Coal Association estimates that some 900GW of coal generation AGEING PROCESS were operating in 1992. but this had grown a much higher fraction of the total. it will be more difficult to curb emissions labour requirement is limited to monitoring and than if most of the coal plants are coming up for maintenance. Coal plants often established fleet. Renewable sources such as wind and solar (but also geothermal and has to be replaced by something and. have significant operating lives ahead of the feedstock is essentially free and the ongoing them. technologies. and the costs of running rate at which old capacity reaches the end of its life them once built is much less than the cost of 32 . Fossil fuel generation. installed in the year 2000. the possibility of refurbishment or repowering while nuclear attracted just $20 billion in ‘final to extend project lifetime. this is less surprising than it sounds. that the line in Figure 26 for gross FOSSIL-FUEL AND NUCLEAR.

another is to tighten regulation to the point at which coal capacity has to close and be replaced with renewables or gas. show that the CO2 content increased from plants uneconomic.3 gigatonnes. higher than in 2015. Equally worrying. At that point. without strong higher than they were in 2015. One is to change the workings of power markets so that coal plants generate for fewer hours in the year. policy intervention or fierce competition from another fuel – such as cheap natural gas in the US Given that even the current rate of global emissions – the proportion of coal capacity closing each year are sufficient to push the carbon dioxide content would be modest. of the atmosphere up by more than two parts per million per year. to 339ppm in 1980 and 370ppm in addition of 47GW worldwide. So far. according to this forecast. predicted capacity came into service in the US. In January 2016. probably at only 20GW or so. and despite the growth of renewables detailed in this report. As far as gas-fired generation is even early in the next one. taken at the Mauna Loa Observatory in Europe due to low capacity factors that made in Hawaii. The International Energy concerned. they will still be 9% by more than 70% since 2011. in its 2015 World Energy Outlook. Antwerp) region of north west Europe. nearly a quarter of the 47GW of new Agency. Bloomberg New Energy Finance’s projection for generation emissions is that they will increase for another decade. finally peaking only in 2026. and the final one is to retrofit carbon capture and storage. before climbing to an average of 401 in 2015. some of it Administration. countries will face three choices in the years ahead if they want to bring down emissions. 5 Benchmark index for steam coal delivered to the ARA (Amsterdam. THE EMISSIONS OUTLOOK AND RENEWABLES The outlook for power sector emissions remains alarming – despite the agreement at COP21 in Paris. This compared to the gross 316ppm in 1959. peak in between. some 12. to a combination of age. Some gas-fired capacity Figures from the US National Oceanic & Atmospheric also closed in 2015: an estimated 7GW. CHAPTER 2 constructing new fossil fuel or renewable capacity. 33 . then the higher rate of emissions In fact. went online in 2015. established coal power station according to the IEA. tightening regulations and the US gas effect. some 43GW closed due rate.7 gigatonnes. More than half of the increase in 2013-40 would be due to increase coal-firing. or 1. with India None of the major forecasting organisations see a representing another quarter. China accounted for almost exactly a half of the 85GW of new coal. progress on equipping coal capacity with CCS has been much slower than the technology’s supporters had hoped. while 85GW of new coal-fired power stations likely to increase atmospheric CO2 at an even faster went into service in 2015. even in particularly since seaborne coal prices have fallen 2040. the figure was 2.5ppm higher than Looking at where the new coal and gas capacity in January 2015. with China that they would rise from 13. Faced with a large. fleet.4 gigatonnes in 2013 and the Middle East and North Africa responsible all the way to 15. 2000.5 So. and the rest of Asia peak in power sector CO2 emissions this decade. emissions will be almost 15.1 gigatonnes in 2040. without any for another 15% each.5%. Rotterdam. or another 10%. Bloomberg New Energy Finance estimates forecast above for the 2020s and 2030s would be that.

and energy efficiency took hold across the board. forecasting up 0. 620kWh per year in 1990 to 480kWh in 2000 and There was a commitment to “pursue efforts to limit 300kWh in 2015. 6 However. the electricity used per trillion the temperature increase to 1. Part of global economy would be “cut in half” over the the reason for this small increase must represent next 25 years. In January although the rate of increase would be down from to November 2015. and then 195 less than 500kWh per year. the spread of more efficient devices. the US Department of Energy cites that most countries now appear to be focused on the electricity saved by switching to a 15W halogen the issue of climate change and reducing emissions. In IT. However.CHAPTER 2 BP. the transport sector improved fuel economy part offshoring of industrial production to Asia. Some 188 countries published Intended Nationally Determined Contributions. reaching a level 20% higher than now – pressure from technological advances. pessimistic in its Energy Outlook 2016.1% per year now. in December 2015.413TWh. said that carbon The second is that demand for energy. average household electricity demand for setting out measures they would take to limit lighting has plunged from more than 700kWh to emissions. Estimates are that LEDs reduce electricity use by more than 50% in the case of street lights. ExxonMobil was a little less countries was 9. and gas. 34 .9% per year between 2014 electricity. computations has been on steep decline since the industrial levels”.6 efforts independently reviewed. compact fluorescent bulb from a 60W incandescent thanks to the United Nations COP21 conference as 75%. the nations agreed to aim “to keep a global temperature average fridge-freezer has gone from consuming rise this century well below two degrees Celsius”.5 degrees above pre. and to have their to just a thousandth of a kWh. and in the last 25 years has fallen from 1kWh updated plans every five years. In the UK. in its Energy Outlook 2016. particularly emissions would rise 0. in the run-up to Paris. In the same country. and that the carbon intensity of the 11 months of 2007 – eight years earlier. is showing signs of coming under strong and 2035. as the power sector moved towards economic sluggishness since the financial crisis. Countries also agreed to submit 1940s. according to the IEA.7% on the same period of 2014 but only the that energy-related CO2 emissions would peak same percentage above the figure for the same around 2030. the number of computations done per machine has increased substantially. One is the fact a smaller scale. At There are two main sources of hope. electricity supplied in the OECD 2. impact. such However Exxon predicted that emissions would still as LEDs for lighting. will also have exerted a strong be 11% higher in 2040 than they were in 2014.

and the rate of battery price reductions and the rate of also providing new opportunities for balancing expansion of charging infrastructure.000 – despite the sharp fall in oil 2020 (some 13 times the level of new EV sales in prices that reduced the running costs of gasoline 2015). and an internal combustion engine. In a study published in February 2016. and 41 million in 2040. solar or hydro-electric. market.000 per year. Electric Vehicles: charged with potential 35 . TOTAL ELECTRIC VEHICLE (BEV+PHEV) SALES. be equivalent to less than 10% of current global reductions in battery prices. Even if battery vehicles. variable renewable power (see Chapter 3 on the balancing issue). little – because of the fact that the existing vehicle fired electricity. of 23.000km in a year.4 million. and the availability electricity demand. jumped 60% in 2015. and forecasting EV sales between now and 2023 to be around 200. Their effects could. but in 2013. or BEVs. and plug-in hybrid electric EVs fulfil the more bullish forecasts and the number vehicles.2kWh per kilometre in normal city traffic. 8 OPEC World Oil Outlook 2015 9 Bloomberg New Energy Finance. Another consideration is the How much impact could EVs make on electricity underlying source of electricity used in particular demand? In the next few years. Even if they represented this was far more than offset by surges in sales in a quarter of all light duty vehicles on the road China and European countries such as Norway. or PHEVs7. have combined with increasing familiarity to propel sales forward.08% line.000 to 462. 2011- 2015 THOUSANDS Forecasts for the EV market vary widely.7 million. FIGURE 27. the in 2040. by the UK Royal Academy of Engineering will be much less than if the EVs are charged with in 2010. due partly to that gasoline effect and partly of the IEA’s figure for world electricity generation to a pause in the flow of new electric models. research note Global EV sales outlook to 2040. widely differing assumptions on transport. Bloomberg New Energy Finance forecast that sales Source: Bloomberg New Energy Finance of EVs would soar. Last year saw the US EV market flat.318TWh. in part. 11 of tax and other incentives. to hit 2 million 7 Battery electric vehicles derive their power purely from a chemical battery that needs recharging. their electricity use would be likely to UK and the Netherlands.9 The gap between these two forecasts in fact. EVs equivalent to a small petrol or diesel electricity from wind. then that would be 9TWh of consumption in and diesel cars. but leading to more electricity use. February 2016 10 Royal Academy of Engineering.8 Its figure for total EVs on the road worldwide in 2020 is 1. CHAPTER 2 ELECTRIC VEHICLES One of the developments that could have an in 2020 alone. four-seat car use around 0. from on the road amounts to six million worldwide by 290. that year. be complex – reducing emissions from reflects. by that time impact on global emissions over the next 25 years is making up 35% of the total light duty vehicle the growth of electric vehicles. then the net effect on emissions fleet is overwhelmingly fossil fuel based.000 to 300. the answer is very countries to charge EVs: if EVs are charged by coal. OPEC published a report late last year predicting that vehicle range and charging infrastructure would continue to be major barriers to adoption.10 Let us say that the average Figure 27 shows that global sales of battery electric vehicle travels 15. Plug-in hybrid electric vehicles have both batteries that can be recharged from an external source. On one of using electric cars rather than gasoline cars estimate. Improvements in range. That would be equivalent to just 0. compared to Bloomberg New Energy Finance’s prediction of 7.

number of kWh that a 100MW installation would produce if it operated at full throttle 24 hours a These fluctuations mean that some sort of day. the capacity factor may be in in grid frequency or. One is the rapidly falling cost of batteries. despite the recent improvements.CHAPTER 3 RENEWABLES AND STORAGE n Energy storage is one of four ways of providing fast-responding balancing to the grid. particularly those in areas subject to seasonal droughts or large variation in rainfall. will have capacity factors of 50% or less. For wave and by national grid system operators. in extreme cases. have improved enormously. with less in the way of fluctuation. and demand-response. n The biggest challenge facing this “dream team” of renewables and storage is still cost. In 2015. to other Variable renewable energy sources such as wind. and for rooftop solar it may be This challenge has mostly been handled well so far towards the bottom of this zone. In the case of growing rapidly in the world electricity system and onshore wind. Similar considerations apply to biomass.000 per kWh. 365 hours a year. technologies. since these power sources are the resource conditions are right. to varying extents. 1 But it is particularly pertinent for solar. THE NEED FOR BALANCING when power stations are not producing electricity is also relevant.or diesel-fired. One reason is that technologies are mostly early-stage. spurred on by the growth of the electric vehicle market. 1 Some hydro-electric projects. for instance. n The other is that local storage could enable wind and solar projects to provide electricity for a larger number of hours.2GW. in which electricity consumers reduce their usage in return for payments. while announced projects totalled more than 1. the average electric vehicle (EV) battery pack price has fallen from $1. Since 2010. black-outs. coal. at current levels tidal projects. interconnectors linking countries or regions. wave and tidal produce electricity only when wind and solar. The other options are fast ramp-up plant. electricity generation to meet consumption on a consistent basis without there being sharp changes For a solar PV park. Even nuclear. This percentage is known as balancing is required in the system. n Storage is exciting particular interest for two reasons. 2 the 10-20% range. a project may have nameplate because there can be a lot of short-term variation capacity of. n New utility-scale energy storage capacity commissioned in 2015 (excluding pumped hydro and old- style methods such as gas holders and lead-acid batteries) reached a record 250MW. so actual data techniques for forecasting wind and solar output points are few and far between. in order for the capacity factor. This could be a powerful combination at both utility-scale and in developing economy microgrids. whether to deal with demand spikes or variable renewable power generation from wind and solar. 100MW. up from 160MW the previous year. adding batteries to a wind farm to provide more consistent and longer- lasting power would have raised a project’s levelised cost of electricity per MWh by an estimated 25% or more. typically gas. but output over in power output – caused by fluctuations in wind a year is likely to be only about 20-35% of the speed or cloud cover in front of the sun. it may be 20-40% – although these of renewables penetration. so grids have become able to anticipate when to call on extra generating The issue of how to make up for the lost generation plant. to $350 per kWh.and gas-fired generation never have 100% availability either: regular maintenance and unscheduled outages will reduce their capacity factors over a year. waste-to-power and geothermal plants. 36 .

to those that need it at that time. Modern gas- gas. coal or Energy storage has taken a number of guises over diesel. and generation exceeds demand. 37 . which of the four is the best bet depends that can later be released to drive a turbine and greatly on whether the balancing need is very generate power. demonstrated. as units close due to restrictions on also be uneconomic to keep powering it up and emissions or fail to make an economic return. for example. In the case of long- term balancing. in which case costs per MWh will be the crucial factor in deciding which to use. or 2 To prevent this instability. all four may be viable options. has a renewable portfolio or gas-fired power stations. Pumped hydro-electric stations and commercial users being paid by the grid to can be replenished when power is plentiful. Examples currently under construction of demand. standard for its utilities of 50% by 2030. the grid may be able relatively easily and cheaply to schedule fossil fuel and hydro generation to step up output to meet the need. California. In Alabama. conventional fossil fuel energy. wind and solar generation could be balanced. Total world pumped hydro capacity is more hold surplus electricity produced when it is windy than 100GW. the grid will also have to balance its load curve (variation in demand). could be strong contenders wind and solar generation in the mix increases. plant may be too slow in its ramp-up to prevent the amount of spare fossil-fuel capacity available is undesirable swings in system frequency. usually involving large industrial generate electricity. The first is via conventional generation such as gas. equivalent to about 45% of electricity. This can China. and national governments are likely to consider THE STORAGE LANDSCAPE different combinations of these. and the European Union target for 2030 is 27% of overall For the very short-term. The third is via and contain fuel that could. in the future. Also. Demand response or. For the medium-term need. Surplus electricity is used to compress air However. if necessary. Many powering it down at short notice. Gas holders and electricity from locations that have surplus power oil storage tanks have been around for decades. So could certain types of storage. Some storage technologies may be the year because their output is not needed or the quickest of all to respond. or sunny. CHAPTER 3 However. the balancing issue will be even more thermostats that turn down air conditioners when important in the future. but may still not the economies are already sitting idle for part of the best option. The second is via interconnectors that pipe many years (see also Box below). be used to demand response. in this time slot.and coal-fired power stations in developed fired engines will do better. Power South Energy short-term (measured in milliseconds to minutes). and it may likely to fall. and then release it to the grid when renewable power Other technologies are also being used or resources are insufficient to satisfy consumption. smart devices such as electric vehicles that charge when the electricity price is low and do not charge when it is high. as the percentage of power prices are high. and switch off machines or turn down air conditioning the water released to generate when it is in short when electricity supply is in danger of falling short supply. include the 1GW Limmern project in the Swiss Alps and the 600MW Hainan Qiongzhong plant in The fourth option is energy storage. supply electricity for long (and as long as clear pricing signals are provided by the market for There are four different ways in which variable ancillary grid services). medium-term (measured in hours) or long-term (measured in days or weeks). and could out-compete wholesale electricity price in the market is too low alternatives as long as they are not required to to prompt their owners to fire up their turbines. and one of these is compressed air.

in cost. the The cost declines per kWh for lithium-ion batteries European Union announced EUR 6.The third was a rechargeable lithium-ion battery that mounts on those with long discharge time of days to months. (1-10KWh for capacity of 1kW). compressed air somewhere between the second (medium discharge time) and third (long discharge Prices for stationary battery storage vary time) categories. reaching based International Electrotechnical Commission some 462.000 homes. with prices from $3. Electric car sales A 2014 white paper published by the Geneva. stores of also being used in the burgeoning electric enough energy from nearby generating plants vehicle industry. the US-based than one (less than 1kWh for power capacity of electric vehicle maker. However. 38 . up from 290. worldwide have been expanding rapidly. development include Pacific Gas & Electric’s 300MW Bakerfield site in California.000 upwards. including the 270MW Iowa Stored Energy Plant. all with an energy-to-power ratio of less entrepreneurial effort.000 in 2015. $ PER MWH AND Compressed air projects often PERCENTAGE CHANGE BETWEEN PERIODS. 2014. performance or environmental respects. AVERAGE EV BATTERY COSTS. is building a “gigafactory” 1kW). greater volume (35GWh per year) and at lower lithium-ion and sodium sulphur batteries. but several large-scale projects have been put on hold or cancelled in the last five years. to produce lithium-ion batteries in time of minutes to hours. The IEC study put pumped hydro storage and Enphase. as funding for a compressed air energy storage project Figure 28 shows. grouped storage technologies into three groups. They reflect improvements in in underground caverns in Northern Ireland.CHAPTER 3 FIGURE 28. The second was those with medium discharge in Nevada. US. and in July 2015.5 million of used in electric vehicles have been spectacular. white paper on Electrical Energy Storage. of seconds to minutes: double-layer capacitors. economies of scale as factories get larger. but the trend – like that for EV batteries 3 Lead-acid batteries are widespread in places such as India to provide back-up against power cuts. it launched the Powerwall. Newer projects under manufacturers helping to drive down costs. including those based on sodium sulphur or sodium nickel chloride Source: Bloomberg New Energy Finance but predominantly those using lithium-ion structures. the wall and comes in 7kWh or 10kWh versions. and included lead-acid. 2010 TO H2 2015 promise low costs on a dollar-per- MWh basis.2kWh modular system from 10. However. 4 International Electrotechnical Commission. but there are no signs yet of bottlenecks in the The first group was those with short discharge time manufacturing chain. and on location. superconducting magnetic energy storage and Lithium-ion batteries are also seeing significant flywheels.000 in 2014. built in 1991. with fierce competition among to power 110. 4 depending on the size of the system. all with cost (“more than 30%” below previous Tesla energy-to-power ratios of between one and 10 figures). the 150MW Watkins Glen Project and the 317MW Dresser-Rand Apex Bethel Energy Center project. this technology is not expected to be able to compete long-term with newer chemistry. the main focus of investor interest in storage at the moment is on batteries. Another with energy-to-power ratios of much greater than example is the 1. 3 The latter technology has the advantage Cooperative’s 110MW system. Tesla Motors. selling for around $500. and aggressive pricing by large battery makers looking to defend market share. including hydrogen and synthetic natural gas. battery chemistry and in manufacturing processes. In May 2015.

700 California and Hawaii. which raised $25 million of venture capital in October In Japan. Their project. One of the first concrete initiatives as an explicit reason for investing in battery storage in this area is Powerhive’s partnership with Enel in –both “behind the meter” (storing electricity in Kenya.000 homes in Kenya from off-grid solar systems. the desire to kerosene use in remote areas far from the central balance wind or solar generation is also emerging power network. schools and community groups to install a storage system. and by late last year some 50. The idea. and at grid-scale. in for back-up. providing back. CHAPTER 3 – is firmly downward. amounting to a total of developers of residential solar systems such as 136MWh. lithium-ion batteries in the residential and small business market. electrification and cutting down on hazardous and frequency regulation. In December last year. a subsidy programme started in 2012 to 2015. for instance. Other utilities are also trialling sales of storage for solar electricity. Germany introduced a subsidy programme 2016. or going on around the world at the moment is aimed with residential-scale PV. However. they stated. Tanzania-based to 30 September 2015. with battery storage and diesel generators Looking first at behind-the-meter applications. BEHIND-THE-METER STORAGE for 100 villages. totalling 277MWh. Another approach has been promoted Off-Grid Electric and Mobisol have installed tens by MVV. This uses a central energy storage system photovoltaic panels and batteries can power lights.2kWh battery. In Tanzania. for use by developer said it expected to offer electricity to those buildings). in November and may now run for several years more. In April 2015. a partnership dubbed Jumeme for small-scale PV with storage. The biggest prize in emerging markets for storage Much of the investment in battery storage that is may be in conjunction with solar mini-grids. A number of African at improving grid performance. businesses.000 systems sold up At the smaller-scale end. a television set or radio and the solar panels of multiple households. also charge mobile phones. utility AGL Energy started to market a 7. and it added larger units later in the year. Note that prices of residential grid during the hours of the day when electricity storage systems typically include inverters and prices were highest. with a specific beef to balance renewable power the-meter storage. was due to start construction in early 2013. running on solar panels and wind turbines.000 per kWh in to allow business to reduce their demand from the November 2015. This was scheduled Rural Power Supply is building a 5MW minigrid for to finish at the end of 2015. aims to electrify one million homes in the encourage the installation of behind-the-meter next three years. One mini-grid in western Kenya.000 UTILITY-SCALE BATTERY STORAGE units had been installed. In June 2015. a German utility. balance of plant as well as the basic battery pack. Off-Grid Electric. more than 200. but was reprieved 16 villages in the nation’s northwestern region. with its StromBank of thousands of their rooftop technologies. Among the utility-scale storage projects announced Australia has also seen strong interest in behind. There were some 27. to balance small-scale PV. In Australia. energy and battery storage to businesses in average residential system costs fell from $2. the California based microgrid residential or commercial premises. was per kWh in October 2014 to $1. Last summer. Duke Energy and Green Charge Networks said they would offer solar 39 . from ADS-Tec to pool excess electricity produced by a small refrigerator. Adelaide City Council introduced an incentive for households. countries are pursuing this as a way of extending up in case of demand spikes or supply problems.

via Mecklenburg for utility Wemag. interconnectors. including existing proportion of renewable electricity in its mix than coal power stations. but has so far 5 BP Technology Outlook 2015 40 . for instance. In its New same year Saft Groupe and Ingeteam Power Energy Outlook 2015. and number of utility- scale energy storage projects announced worldwide (excluding pumped hydro). at 153MW Notrees wind farm in Texas. plants. at Kilroot in Northern Ireland. against 7% for sodium sulphur batteries and 11% for compressed air energy storage. In February 2016. West open. demand response and interconnectors. ANNOUNCED UTILITY-SCALE ENERGY STORAGE Figure 29 shows the MW PROJECTS WORLDWIDE. of estimates in the market. there will In June 2014. GS Yuasa said it would build a 1MW be a need for “flexible generation” that can supply solar park with a 100kWh storage system in Gunma electricity when there is insufficient production prefecture. and clear is how costly this will be. Storage was allowed to bid. BP. The first two UK a grid heavy with wind power. plant with a 9MWh lithium-ion battery system on Bloomberg New Energy Finance estimated that the Indian Ocean island of Reunion.and long-term balancing. northwest of Tokyo. POLICY PUSH Policy-makers are becoming Source: Bloomberg New Energy Finance increasingly aware of the fact that a high percentage of variable renewable generation in the mix sources have been a 12MW solar farm in Hawaii will require various sorts of balancing.6MW solar plant under construction at last year that taking into account the “integration DeGrussa Copper Mine in Western Australia. MW capacity. of in 2040. with lithium-ion batteries dominating – accounting for instance for 79% of the megawatts announced in the first three quarters of 2015. projecting power supply Technology won a contract to build a 9MW solar and demand trends out for the next 25 years. There are also projects happening where the link to renewables is more indirect. for instance. denominated in pounds per kW per year. auctions. demand response and storage. which has a higher for a mixture of technologies. Younicos of Governments have started to provide incentives Germany. What is less commissioned last November by Duke Energy. new and existing gas-fired the UK as a whole. 5 the Clean Energy Finance Corporation. The previous the flexible generation capacity worldwide would year. This will be some combination of quick 36MW. with costs” of wind and solar in North America would 6MW of battery storage and backed by funding add between $8 and $30 per MWh to their levelised from the Australian Renewable Energy Agency and cost of electricity. said and a 10. and earlier the from wind and solar to meet demand. too. in 2014 and 2015. There is a wide range containing in addition a 6MW lithium-ion battery. which operates their “capacity market” auctions. For medium. 5MWh battery system in Schwerin. ended up providing AES commissioned a 10MW battery storage array contracts.CHAPTER 3 FIGURE 29. commissioned in late 2014 for such flexible generation plant to remain a 5MW. Duke Energy began operating what was need to grow from some 58GW in 2015 to 858GW then the world’s largest battery storage system. ramp-up gas-fired power. The total has been increasing markedly. notably those in the UK and France.

However. Puerto Rico Electric Power Authority issued minimum technical requirements mandating that The cost for renewable power projects will depend new PV and wind projects provide frequency and greatly on how long their batteries have to store ramping control for 30-45% of their nominal power. with $800/kWh total installed cost. Kaua’i Island Utility Cooperative For very short-term balancing. for balancing local temporary issues. Trade and Industry. adding batteries will impact the Source: Bloomberg New Energy Finance. As soon as Tesla produces its [low-cost] battery. Figure 30). we will buy the first 10. This will also happen in totally new. In an interview in November. came last year from Hawaii. But the other kind of storage. if it had to provide batteries sized to 50% of or METI. two hours of storage. but this is too expensive. the levelised cost of developers are allowed to use energy storage electricity would be $95 per MWh. 7 December 2015 41 . is very interesting. chief executive of Enel. Ghana has been mooting a higher it is based on second half 2015 battery costs. whose an element of short-term balancing. and feed-in tariff for solar projects offering some those costs are likely to come down substantially in degree of grid stability than for those without. MWh. emerging markets that have no grid. Francesco Starace. CHAPTER 3 FIGURE 30. said: “There is a stupid kind of storage that is putting energy away in the night and using it during the day. the estimate is based on it providing 50% of total capacity. in systems at solar and wind farms. This is some 42% systems to store electricity that would otherwise be more than for a project without any storage (see curtailed. 2013. In September 2015. H2 2015 LEVELISED COST OF ELECTRICITY BY COUNTRY renewable energy plants in Italy. applicable to the more realistic scenario where the requirement systems above 10kWh in size. and resell the electricity later at the feed. by providing some element of storage battery storage. compared programme for installation of energy storage to just over $67 if it had no storage. project capacity lasting for two hours. Bloomberg New Energy Finance estimates generation capacity. We will be putting batteries into some 6 ”We Will Turn Enel Into Green Power: Starace”.” 6 The big question is to what extent For storage. meanwhile has launched a new subsidy total capacity and lasting for four hours. That is where the battery industry is focussing. WITH STORAGE NOMINAL $ PER MWH as soon as the regulator comes up with the relevant decree. but it is already a historical figure since in tariff rate. the years ahead. The utility said that under the 20- – onsite or close to site. that a US onshore wind farm would have a levelised cost of electricity of more than $200 per Japan’s Ministry of Economy. year contract it would “pay SolarCity a lower rate than the current cost of conventional generation Puerto Rico is among the first jurisdictions to and only slightly more than the cost of energy require that renewable energy projects provide from KIUC’s two existing 12MW solar arrays. Bloomberg New Energy Finance. AND TECHNOLOGY. the Italian utility. One hint been unsuccessful at winning contracts. In December output is available only during the day”. the emphasis will be signed a power purchase deal with SolarCity for on renewable energy installations to do the work electricity from a 13MW solar array with 52MWh of themselves. The Germans are also doing it. Under the new was for storage equivalent to 20% of generating curtailment rules for solar and wind. 1% O&M. annual reports levelised cost of electricity for wind and solar projects.

to acquire operating-stage renewable energy projects. 1 1 Bloomberg New Energy Finance. or demand for. there were some other markets. This helped to safeguard the competitiveness of wind and solar – both technologies where most of the costs are incurred upfront rather than during operation. swaps (in turn reflecting reductions in long-term such as South Africa. the Federal Reserve implemented corporate level in the form of borrowings by the the first increase in its interest rates since the utility or specialist company that is developing the 2008 financial crisis. at the increases in interest rates (both short-term and time of the European sovereign debt crisis. In the of non-recourse loans. Analyst Reaction H2 Europe Asset Finance: Offshore Dominates.5% in the In China. and index-linked notes to back solar projects in the UK. the all-in cost of debt for an onshore over Libor. n Development bank financing of “broad” clean energy was $83. bonds or leasing. 18 November 2015 42 . the benchmark repurchase rate was cut by 50 basis points by the Reserve Bank in early 2015. less than 3% in Germany and less than 4. but the size of the hike was project. n Innovation in the provision of finance for clean energy in 2015 included platforms managed by banks to pool project-oriented investment from pension funds and other institutions. share issues to fund wind projects in Uruguay. debt remained plentiful in many of the Short-term construction debt for a medium-sized core markets for renewable energy with. or between 2. n Yieldcos and quoted project funds raised a record $6. for France.9 billion from institutional and retail investors in 2015.CHAPTER 4 INVESTMENT SOURCES n The all-in cost of debt for renewable energy projects in developed economies remained low by historical standards in 2015. A sell-off in yieldco shares in the late summer put a question mark over their future equity-raising. Back in 2012. However. in some renewable energy project in the US tended to be places. Debt makes up the majority of the investment taking the all-in cost of rupee debt down to the going into many utility-scale renewable energy 11-13% range. 4.5% and 3% all-in. or at the US in December. the UK. further downward pressure on its cost. helped by reductions both in the margin by more than one percentage point during the charged by banks and in the cost of interest rate year. where there were significant government bond yields). wind project fell to less than 3. In 2015. the long-term) but these changes have yet to have a equivalent figures would have been around 5% noticeable impact on the supply of. and there were further cuts totaling projects.9 billion in 2014.5% in France. either at the project level in the form 50 basis points in the remainder of the year. Indications from the first such lenders to publish figures for last year are that the total may have ended up close to that level once again in 2015. available late in 2015 at about 150-200 basis points In Europe. the benchmark one-year lending rate fell UK.5% for Germany and around 5. only 25 basis points and the 10-year government bond yield ended 2015 close to where it began. DEBT In India.5% for debt for renewable energy projects.

China and India. its most recent move being to sell bonds backing a 10MW PV park being developed in that country by Canadian Solar. equivalent of $129 million of one. up 28% fact. Since 2013. Goldman Sachs has arranged bonds for seven solar projects in Japan with a combined capacity of more than 50MW. sovereign & agency. and by has been sporadic. National Financiera issued $500 in established markets such as Europe. Source: Bloomberg New Energy Finance 43 . with $1 billion worth issued companies and utilities. to finance the 288MW Meerwind offshore wind project in the German North Sea. industrial bond issuance in 2013. 2 A significant slice of the green bond energy projects in 2015 were on the other side of issuance by development banks. in the 330MW Gode Wind 1 offshore wind farm being built by Dong Energy. Brazil and Mexico are emerging as new locations for bond issues to back renewable energy projects. for instance by MidAmerican Energy Holdings to back its Solar Star project in California. $BN Japan. the biggest bond deals to back renewable on 2014.3 billion worth a total capacity of 1. German insurers led by Talanx agreed to buy other major source of debt for renewable power EUR 556 million worth of bonds issued by Global assets is borrowing directly from the world’s array Infrastructure Partners to help pay for a 50% stake of national and multilateral development banks. which alone lent EUR 430 although they do have the potential to grow million. GLOBAL GREEN BONDS ISSUED 2007-2015. Big bank-led financings towards the development of nine wind farms with included the provision of EUR 1. but it would already be In December. year bonds to refinance five wind projects. the earlier. Five months Apart from commercial banks and bond issues. sovereign and agency bank project finance for many years. and utilities will have found its way into financing clean power projects. The North Figure 31 shows the upward trend in green bond American market has been quieter since and. and the award of $601 million in debt by significantly if institutions become more a group of lenders led by Standard Bank of South comfortable with holding fixed-interest paper Africa for the 100MW Ilangalethu Karoshoek solar secured on the revenues of a project. The US had a big year for project corporate issues by commercial banks.6GW. of debt for the 402MW Veja Mate offshore wind farm in German waters. CHAPTER 4 Commercial banks provided most of the project. In 2015. in issuance to a new peak of $48 billion. developer Casa dos Ventos Energias Renovaveis sold the local currency SSA is supranational. thermal plant. Blackstone sold EUR 978 million included in the asset finance total discussed in the worth of bonds to repay bank loans taken out Executive Summary and Chapter 5 of this report. project bonds were heavily outweighed in volume by other categories such as climate-friendly bonds Bonds have been an alternative to conventional issued by supranational. a deal that involved six Project bonds make up only a relatively small commercial lenders led by Deutsche Bank as well as fraction of the world market for ‘green bonds’. but their use bodies (including development banks). FIGURE 31. In level debt last year for wind farms and solar parks Mexico in October. ABS is asset-backed security. development bank KfW. North million worth of five-year bonds to contribute America. commercial banks the Atlantic. In Brazil in September 2015.

and KfW’s provision of $125 million to which provided $28.5 billion between 2007 and 2014. rather than renewable energy. This was up slightly from $83. followed Tunisia to build solar and other projects towards by the European Investment Bank ($11.4 billion). or 42% of the total. Brazil’s And there were loans to manufacturers. in France. It also covers loans Banco Nacional de Desenvolvimento Economico to large hydro-electric schemes. and took the cumulative investment by these organisations to $577. and it is easiest to compare them in terms of their provision of finance to a “broad” definition of clean energy.5 billion in 2013. “Broad” clean energy covers a wider span of catching renewable power financings. It includes loans to Efeler geothermal plant in Turkey. up from EUR 4. down 42% on the 2014 total. such as European Investment Bank’s $55 million allocation to the Capenergie 3 fund Taking that “broad” spec.3 billion of finance.1 billion in the previous year. commitments. including JinkoSolar’s $51 million credit Bank ($6 billion). International energy efficiency projects. up 85% on the 2014 figure. development banks were active in eye.5 billion. There were also a number of indirect manufacturers of clean energy equipment. Among those that have released preliminary figures.3 billion) and China Development to projects. Completing the top 10 were line from China Development Bank. as Figure 32 shows. which accounted for Finance Corporation’s loan for the 36MW Malvern $35. they provided $83. and loans to e Social. as opposed BNDES ($6. rather than the start of a downward trend.CHAPTER 4 in 2015.5 billion in 2015. including financing than the definition of renewable energy EBRD’s provision of $200 million for the 170MW investment used in this report. the development bank aimed at developing at least 500MW of renewables most active in the sector was KfW of Germany. On this basis.4 billion to renewable energy in 2015. 44 . water or other environmental work. The way that development banks define their lending to renewables and other low-carbon and environmental projects differs widely. $BN bank lending to renewables in 2015 are not yet available – with some of these lenders yet to publish their figures for the year. the World Bank Group ($9. and the offer of $175 to transmission and distribution projects. which million for wind parks in Bahia state.8 billion) to wind projects Source: Bloomberg New Energy Finance.7 billion). FIGURE 32. and allocations wind farm in Jamaica. development bank annual reports 2 Note that many green bonds are used to finance climate mitigation.9 billion in 2014.1 billion ($1. In 2015. KfW said that its renewable energies programme was EUR 4. DEVELOPMENT BANK FINANCE FOR “BROAD” CLEAN Aggregate figures for development ENERGY. a change that the EIB attributed year-on- year variation in the completion of big deals. Brazil’s BNDES said it lent BRL 6. the country’s clean power target of 30% by 2030. the European Investment Bank lent EUR 3. by Brazil’s represented a further 11%.

and once the project is built. come from outside investors such as infrastructure funds. the precise role played by equity may Energy secured $337 million of loans from six 45 . and Export-Import Bank of by a utility in the first instance. CHAPTER 4 Asian Development Bank.1 billion in 2014. but then refinanced China – all with commitments in 2014 of between later with new debt providers or equity investors $1. or it may approach on other projects. about 80% debt.6 billion and $3 billion. with the rest of the money later date would.2 billion in 2011. if we define as “North” those lenders majority or fully controlled by OECD countries. One Reconstruction and Development. In Equity for renewable energy projects can come from the case of the two 330MW halves of the Walney a utility that is financing the whole cost on balance Extension offshore wind project off the UK. is that the construction of Development Bank. be in keeping with its coming from non-resourse project debt. developer Recurrent As with debt. then there was The clutch of Chinese offshore wind projects a total flow southward of $15. or from a developer that is contributing finance is coming initially entirely from Dong equity to cover a fraction (often 20% to 40%) of Energy. the 257MW Tranquillity installation in California. the developer. however. financings of 2015. African possibility. In the US. the equity providers were Datang Renewable and Jiangsu Guoxin Investment. insurance companies In the case of one of the largest PV project and pension funds. coming in to buy some of the interest of the utility. the sheet. A refinancing by Dong at a the investment cost. Japan Bank for International a project might be financed 100% on balance sheet Cooperation or JBIC. there is the variant of tax equity If we look at the extent to which development providers coming in to replace construction debt banks are contributing to North-South flows. private equity funds. reaching ‘final investment decision’ in 2015 are up 14% on the 2013 figure but below the peak of thought to have gone ahead on the basis of $16. for instance. European Bank for change over time if the project is refinanced. with 20% equity coming from the developer – so in the case of the 300MW EQUITY Binhai project.

They then own the projects through to the end of their lives. Iberdrola. attracting institutions such as hedge funds and wealth managers. They buy ‘drop- down’ assets from their former parents.9 billion in renewable energy. . yieldco public statements Figure 33 shows the amount of banks. Six other European quoted project funds are independent and buy assets on the market. 3 The amounts committed by individual in question their ability to raise significant new utilities have shown divergent trends – in 2014. pioneered by NRG Yield 3 These figures are drawn from the annual reports of SSE. Iberdrola and SSE were investing less than a third of the amount they did in 2010. Enel one and a half times and EDF about 40% more. However. putting set in 2010. In 2014.6 billion record America suffered sharp share price falls. and also have the option to buy projects from third parties. the fastest evolving aspect of equity provision for renewables is at a post- construction stage. raised Figure 34 in the next chapter). nine of the York at the end of July. for equity in the short term. plus individual investors hungry for dividends.CHAPTER 4 FIGURE 33. yieldcos in North in 2013 but 19% less than the $14. 4 Yieldcos and quoted project funds raised more than $14 billion from stock market investors on both sides of the Atlantic from 2013 to the end of 2015. 46 5 Note that the quoted project fund total includes Saeta Yield. EDF. paying out a high proportion of cash flows to their stock market investors. 2013-2015. largest European utilities invested a total of $11. buy operating-stage renewable energy projects either on the market or from a former parent that is involved in developing them. as were two of the European equivalents. 4 The eight North American yieldcos were all born out of development companies. set up development or pre-construction stage (see the by SunEdison to own assets in India. the latest $675 million in an initial public offering in New year for which full figures are available.Energias de Portugal.ON. when new and more risk- averse institutional investors have been looking to get involved in order to access the predictable cash flows of an operating-stage project. the last three years. One obvious manifestation of this has been the emergence of the “yieldco” in North America and its London-listed cousin. RWE. and also equity finance estimated at nearly new capital raised by these entities in each of $200 million from itself and from Southern Power. The rollercoaster ride of instance. a European yieldco. Source: Bloomberg New Energy Finance. the quoted project funds. Enel. some 6% more than In the third quarter of 2015. E. EQUITY SOLD BY YIELDCOS AND QUOTED PROJECT in the US and Greencoat UK Wind FUNDS. $BN in the UK. These vehicles. on-balance-sheet component of asset finance in South Africa and other emerging markets. EDP . China. Dong Energy and Vattenfall. Brazil.5 One of the new departures last year was an attempt to interest developed- Utilities continue to be an important source economy stock markets in yieldcos holding projects of equity for renewable energy projects at the in developing countries. EDP around a half. TerraForm Global.

one of South America’s leading wind reassurance of having a technically experienced markets. and the issue was arranged power projects worldwide. 141MW In April. towards the $321 million. Another innovation in Europe since 2012 has been the appearance of inflation-linked notes as a way If we stretch 2015 by one month. in December.300 commercial energy in Kenya. with German Box on innovations below). One Another way in which new sources of equity are reason for this year-on-year decline in the total finding their way into renewable energy projects may be that institutions found new ways to invest is via direct commitments by institutional investors. rounds of equity financing. The proceeds went to channeling debt and equity finance into renewable Armstrong Energy. for International Development’s Innovation Ventures programme. the same trust raised GBP 463 million. to provide equity for the of 10-30% in offshore wind projects and hold them 70MW Colonia Arias wind farm. heavily oversubscribed by investors. These are akin Montevideo stock market to help finance the to unquoted funds.000) for residential solar projects. buying onshore wind projects in both Austria and Sweden. or nearly half its eventual raised $53.8 billion in 2014. for a platform that will take equity stakes investors and institutions. although the biggest INNOVATIONS IN 2015 Last year saw several intriguing new approaches for UK.6 million in two infrastructure fund manager. In a for off-grid solar in Africa. in Europe. except that the manager is development and construction of individual wind an investment bank that puts its own capital to projects. which institutional investors could have exposure to the equity of clean energy assets but with the In Uruguay. this totalled $1. by specialist company Independent Debt Capital involved the establishment of platforms through Markets. Swiss Life said it Off Grid Electric raising $45 million in debt from would contribute EUR 300 million to a platform the David and Lucile Packard Foundation and a with French bank Natixis. offering an interest rate of 21% and domestic rooftop solar installations in the and an average maturity of 2. a 49% stake in the 150MW Ormonde offshore wind farm in UK waters for GBP 237 million. Last year the transactions included solar in Africa. Oikocredit. with specialist company separate move. In December. rather than a conventional private equity or Financiero Pampa raised $77. In March. wind energy trust Fideicomiso work.1 billion in 2015. 47 . totaling nearly 12MW. set up to invest in the number of other family offices plus the US Agency debt of an unnamed offshore wind project. The institutions subscribing to the platform included several unnamed pension December last year saw the first leasing platform funds and a sovereign wealth manager. down including via project bonds and via platforms (see from a peak of $2. January 2016 saw for institutions to access the cash flows of wind and the first bond issue (of $500. the UK’s Green Investment Bank said it had Pampa wind farm.500 active contracts for solar cover the debt capital portion of 2. insurer Allianz once again one of the most active direct investors. 2015 saw equity being raised on the bank involved alongside them. CHAPTER 4 yieldco share prices is examined in more detail in single move was Swedish pension fund AMF buying Chapter 7.6 million via the issue of shares to retail target. One of these. for up to 25 years. BBOXX and Persistent GBP 29.5 million of 19-year index-linked notes to Energy bundled 2. in renewable energy projects in Europe in 2015 – In Europe.5 years.

This total includes the financing finance are discussed in Chapter 4. solar parks. ASSET FINANCE INVESTMENT IN RENEWABLE ENERGY less. the second highest annual figure ever. biofuel plants. and reached a record $199 billion in 2015. n China accounted for the largest proportion of global renewable energy asset finance for the fourth year running. n Offshore wind saw investment rise almost 40% year-on-year to reach $23. the balance of transactions swung more heavily towards project finance. its aggregate for 2015 reaching $95. the first time it has represented a majority in the last 12 years. as China’s market had its first busy year and eight $1 billion-plus European projects reached the “final investment decision” stage. on-balance-sheet funding towards debt-equity geothermal installations. 2004-2015. of new wind farms. from 45% in 2014 and the first Source: Bloomberg New Energy Finance 1 Note that BNEF has changed its methodology on Chinese asset finance deals with no disclosed financing type.8 billion.CHAPTER 5 ASSET FINANCE n Asset finance of utility-scale renewable energy projects (capacity of more than 1MW) reached $199 billion in 2015. and non-recourse deals involving project-level debt and equity. A larger number of these for 2015. $BN It excludes large hydro-electric schemes of more than 50MW – although these are discussed in the box at the end of this chapter.7 billion. 48 . However. small hydro-electric dams of 50MW or FIGURE 34. BY TYPE OF SECURITY. up 18% year-on-year. the highest level ever recorded and an increase of 6% on the previous year. There is also a small category of ‘other’ transactions. such as turbine leasing. or 52% of the total. Figure 34 shows the split in asset finance between on-balance-sheet funding by utilities and specialist developers. and earlier years. n Investment in solar thermal rose more than 130% year-on-year to $6. up 6% on Influences on the provision of capital for asset the previous year.1 category of renewable energy investment. are now assumed to be project-financed rather than on-balance-sheet funded.2 billion. among the reasons for the recent shift away from biomass and waste-to-energy power stations. Asset finance of utility-scale projects is the largest time it has represented more than half. which made up $104 billion. there was a swing towards non-recourse project finance and away from on-balance- sheet funding. The former made up 52% of total asset finance in 2015. n Within that total. as large projects in Morocco and South Africa reached financial close. In 2015. up Total values include estimates for undisclosed deals. and wave and tidal arrays.

all countries where debt-equity transactions solar technology. in Germany and a pause in commitments in France as developers waited for the energy transition law REGIONS to be passed and for legal issues over the wind tariff to be cleared up. in this market has spread to more and more lenders. as developers rushed to build under of $34.6 billion and $44. and the presence near the top of the big fell by 24% in 2015. while small hydro drew some $2. US.1 billion intensive way. Wind and solar investment dominated the market in almost equal measure – with capital The high proportion of debt in many European committed of $47. at $24.4 billion. The country accounted for the largest offshore wind deals.9 billion for 580MW and the 336MW- The Chinese total was some 18% higher than Galloper project. project finance deals. for a capacity of 402MW. the UK. as shown billion. proportion of global investment for the fourth year in a row.1 China was by far the largest location for billion total was led by wind investment at $26. Morocco and reasons for this setback were the lower cost of Chile. in third place. although total investment method. where term loans are the usual funding asset finance last year. to reduce carbon intensity and in equity and debt. Also high on in 2014. uncertainty about future policy are also the most common approach.7 million for 300MW. feed-in tariff for the sector and international players entering the market. and Turkey were important locations for the 49 . at $2. The Longyuan Haian Germany.7 commercial banks in offshore wind. in dollar terms. the 300MW-Hami Wind Base Phase II Jingxia wind farm was financed at a cost of $420 million. have Europe maintained its position as the second been the increased importance in the overall mix most significant region for renewable energy of China. seen in Figure 34. In photovoltaics. on the back of a new onshore wind or PV. Experience billion.7 billion was A flurry of wind projects reached financial close nearly three times Europe’s utility-scale funding in the UK. including the Race Bank offshore wind farm at a cost of $2. the largest project by way of investment was the Dexin Taihe Technology Dezhou Lingxian Yongzhou PV plant.1 billion and almost four times that of the the expiring Renewables Obligation scheme. The continent’s $34. while in onshore wind.9 renewable energy asset finance in 2015. at an estimated cost of $480 million for 300MW. Ireland. France Jiangjiasha offshore wind farm led the running. wind farm reached financial close. CHAPTER 5 at an estimated cost of $856. and some banks prefer the large ticket Offshore wind projects topped China’s investment sizes available on offshore to the smaller ones on leaderboard last year. costing $2. China’s total of $95. Scandinavia.3 billion projects reflects the increased confidence of respectively. Germany’s Veja Mate offshore expanding electricity generation in a less coal. with much of that attributed to large in Figure 35. Among the deals list of projects in South Africa. pollution.3 billion. reflecting the country’s strategy of the list of big deals.

In the event. with a total of $9.7 billion. policy uncertainty clouded several other markets. the The Middle East and Africa was another region highest level since 2012. with $7. Corporations became of note in utility-scale asset finance.4 billion. The PV plant. But of $300 million. due to impending cuts to feed-in tariff support in Strict local content rules for wind components the UK. in December. Solar investment surpassed commitments to the country’s wind sector for the first time. South Africa was the of clean energy generation and also the expected biggest contributor to this figure – with investment expiry of federal tax credits. the US Congress extended subsidies to wind and solar projects until 2019 and beyond – a move expected to produce about $73 billion in incremental investment for the two technologies over the next five years. and an increase of 34% on 2014.7 billion – up almost 50% plants financed included the UK’s MOD Lyneham on the previous year and the highest ever.7 billion invested in new renewable energy assets. long-term off-take because there was an increase in local currency agreements for renewable energy spurred growth tariffs agreed for wind projects at auctions. at a cost asset finance of onshore wind last year. The 250MW Kadiri PV plant was the largest financing of a solar asset. depreciation of the real against the dollar did not damage the economics of Brazilian wind projects A number of significant. and an upcoming transition to an auction. year. partly price was BRL 297. Solar led the way in terms of asset FIGURE 35.4 billion. 2004-2015. The largest PV sector. according to Bloomberg New Energy Finance estimates.6 billion. to a total of $3. at a total of $5. up 37%. at a cost of $111 million for 70MW. and policy Among other regions shown in Figure 35. $BN followed by wind.24/MWh). in the US market last year.37 per MWh ($77. UNEP 50 . did not quell the strength of investment in the based mechanism in Germany. and concerns about a relatively high curtailment rate at wind projects. where the average preceding year. with outlays increasingly aware of the stable. of new-build renewable energy Source: Bloomberg New Energy Finance.1 billion raised – the most since 2011.CHAPTER 5 financing last year. BY REGION. with $13 billion.2GW dropped by more than half in 2015 from the was contracted via auctions. as opposed to 60GW for wind). Spain and Poland. Competition for solar PV contracts Project financing of utility-scale solar in Europe was fierce in Brazilian tender rounds – some 2. changes meant the pace of development slowed investment in Brazil picked up momentum last in Germany from the rush of 2014. ASSET FINANCE INVESTMENT IN RENEWABLE ENERGY finance. predictable costs rising 65% to $8. This reflected three things – PV bids prevailing over wind in a number of state and federal auctions. helping to drive asset finance there up 31% to some $24. up 24% at $10. including Italy. India was an important focus Total values include estimates for undisclosed deals. the Modi government’s higher target for solar (100GW by 2022.

Africa’s second largest the reasons for the reduction in Japanese asset economy is auctioning renewable power capacity finance last year. where utility-scale investment declined 49%. growing small-scale PV Total values include estimates for undisclosed deals. UNEP 51 . with the Ilangalethu Karoshoek Both wind and solar hit record levels of utility-scale Solar Valley plant raising the most by way of asset finance. penetration. and grid capacity Source: Bloomberg New Energy Finance. to help meet its growing energy demand and reduce the frequency of outages. at an estimated cost of $1. A number of TECHNOLOGY large-scale solar thermal projects and wind farms played their part. at $8 billion – a drop of 42% on 2014.8 billion for 350MW. ASSET FINANCE INVESTMENT IN RENEWABLE ENERGY billion for 100MW. For further analysis of deals in other countries in the region. This project was BY SECTOR. CHAPTER 5 exceeding $4. see Chapter 1. $BN beaten to the regional top spot by Morocco’s NOORo solar thermal portfolio. Declining electricity demand.1 FIGURE 36. where investment decreased by almost 100%. Asia-Oceania excluding China and India recorded the lowest investment figure since 2011 last year.5 billion – more than quadruple limits for solar and wind generation were among the country’s 2014 total. at $1. 2004-2015. This was largely due to Japan. and Indonesia.

the five largest solar deals were while the financing of solar assets increased 13%. Europe’s top 10 offshore wind grid reliability. $BN worldwide amounted to $23. and India.4 billion in 2015. as a way to help maintain In capacity terms. Nevertheless.2 billion for 1. offshore wind financings WORLDWIDE. Europe followed closely in their footsteps with investment and Brazil also contributed significantly to the $74 of $2. The larger market of onshore wind grew more slowly last year – rising just 3% to reach a total investment value of $83. year totaled almost 3GW – five of which were in UK waters. The NOORo portfolio in Morocco Six of the top 20 global wind deals were for was by far the largest.9 billion. the highest level since in both the onshore and offshore sub-sectors.1 billion. 2004-2015.8 billion. featured heavily in the level breakdown in Figure 36. and more than double 2013’s total (see Figure 37). offshore wind in Europe still dominated the higher There were only nine deals in solar thermal last rankings in 2015 as several long-anticipated deals year.1 billion for over the last few years in the North Sea by the UK. while US-based. including the $728 million projects financed at a lower comparative cost per Nobelwind offshore wind farm in Belgian waters. UK projects – Race Bank million or more.CHAPTER 5 FIGURE 37. in comparison to the vast number of PV reached financial close. project.6GW. or CSP. the US-based Grande Prairie wind farm at an estimated $740 million for 400MW and the UK’s Kilgallioch wind farm at $468 million for 239MW. billion asset finance total. all for CSP and were located in South Africa.2 billion – almost 40% up on the previous year’s total. Wind investment leaderboard rankings for 2015 solar deals – increased by 9% to a total of $107 billion investment rising sharply by 139% on 2014 levels worldwide. reaching a total of $80. thanks to higher investment levels to reach some $6. This was an increase of 7% on 2014’s figure for PV.9 billion and $2. Morocco and China at a total cost exceeding $5. 52 . ASSET FINANCE OF WIND AND SOLAR PROJECTS Globally. although Chinese projects took the Germany’s 402MW Veja Mate offshore wind farm lion’s share of deal numbers. and had an average capacity of and Galloper – nabbed the top spots at a cost of 214MW. at $1. 2011.3 billion respectively. offshore projects in China – reflecting that followed by the Ilangalethu Karoshoek Solar country’s rising interest in a sub-sector pioneered Valley Plant in South Africa at $1. Concentrated solar power with thermal with a capacity of 165MW.4 billion. at an estimated $2. four in the sea off Germany and Solar PV’s top 14 deals were all financed for $300 one off Belgium’s coast. 100MW. BY SUB-SECTOR. Globally. The technology is also free of the farms reaching ‘final investment decision’ last trade disputes seen in the photovoltaic sector. Higher-ticket projects were on the whole $2.8 billion for 350MW. as shown by the technology. energy storage is becoming an accepted option in South Africa and China. Among the largest projects were Mexico’s Nafin wind farm portfolio. Germany and the Low Countries. Source: Bloomberg New Energy Finance Solar thermal electricity asset finance in 2015. generation.

Costs per MW for large Argentina. decreased some 65% to just shy of $700 financed through a consortium of commercial million. However.2 billion. of large-scale hydro projects worldwide is shown in and this is why investment was lower in 2015 than Figure 9 in the Executive Summary of this report. in December that the main works on Wudongde is reached. by far the largest hydro-electric project ‘final investment decision’ stage in any one year is to reach final investment decision was the 10. followed by geothermal shrinking 25% to $1. third in size in total investment behind was dominated by Chinese projects. with biomass and waste-to-power asset Indonesia’s Guris Efeler geothermal project at an estimated cost of $717 million for 170MW.3GW reaching final investment decision in billion Nestor Kirchner and Cepernic projects in 2014. finance seeing a decrease of 46% to $5. This compared West Seti project in Nepal and the 1. the Silver State South PV plant in the US raised small hydro dropping by 26% to $3. month). In particular. initial construction many years before the point Developer China Three Gorges said in a statement of no return. significant deals included 2015. and that the dam would use 850MW long construction process. CHAPTER 5 At an estimated cost of $744 million for 294MW. much lower stated costs per MW. the 750MW around $43 billion of asset finance.7GW.5 billion and the largest amount of investment. influenced by the oil price collapse and a banks.8 billion. the Klabin Ortigueira biomass plant in Brazil at 330MW and the Henan Tianguan Ningde bioethanol plant in China. too. Bloomberg New Energy Finance estimates Other significant large hydro projects reaching that large hydro projects totalling some 26. Some also run into delays during the had started. Sectors outside wind and solar fared less well in In these sectors. $4.5 billion at the average exchange rate in that because of political issues. Biofuels SolarCity’s Kronor PV portfolio at $500 million. 2014 saw the totals in this report.2GW complicated by the fact that many projects begin Wudongde dam on the Jinsha river in China. The estimated trend for asset finance hydro vary significantly from region to region.3GW milestones in 2014 included the 969MW WAPDA got financial go-ahead last year. 53 . which have solar and wind in 2015. equivalent to Neelum Jeelum plant in Pakistan. it represents go-ahead on three Canadian projects. LARGE HYDRO Investment in large hydro-electric projects of in 2014 even though the capacity financed was more than 50MW is not included in the main significantly higher. However. while 2015 electricity. worth $46. and in extreme cases turbine units and cost a total of CNY 100 billion work can be interrupted for a prolonged period ($15. Estimating the value of large hydro dams reaching Last year.5 to 16. or even the award of full permitting. growing source of renewable relatively high dollar values per MW. which have another important. at $283 million for 380MW.2 billion. US proposal in June to reduce biofuel quotas.

The number of customers with PV is predicted to more than double nationally between 2015 and 2020.4 billion. n In the US. centralised generating plant. thanks to still-generous feed-in tariffs and falling PV system costs. whereas small-scale systems take the opposite approach – they FIGURE 38.CHAPTER 6 SMALL DISTRIBUTED CAPACITY n Falling costs and innovative financing mechanisms are putting small-scale distributed solar within reach of more people. a total of $266 billion was invested in new renewable power generating capacity globally. and 25% higher than the 2013 total of $53. Of this. In 2015. as forefront of a transformation in the way we think shown in Figure 38.4 billion invested the previous year. 2004-2015 involve millions of people directly $BN in the production of electricity for their own use (and sometimes profit). went towards projects of less than 1MW – typically rooftop and small ground-mounted solar PV installations. sending small distributed capacity investment there down 57%. Small distributed power systems are at the peak of the German and Italian PV booms. but still below levels Represents investments in solar PV projects with capacities below 1MW seen in 2011 and 2012 during the Source: Bloomberg New Energy Finance 54 . the boom in residential solar looks set to continue. n Australia has one of the highest penetrations of residential rooftop PV in the world – around 1.4 million systems have been installed so far. This was an increase of 12% on the $60. n Japan remains by far the largest small distributed power market in the world. in both developed and emerging economies. n A quarter of all new investment in new renewable energy capacity in 2015 went to small-scale projects – some $67.9 billion. Utility-scale wind and solar projects mimic the traditional model of There are a number of factors driving activity a large. SMALL DISTRIBUTED CAPACITY INVESTMENT. just as it dampened demand in Germany in 2015. about energy generation. whether they be in a rural Tanzania or US suburbia. or $67.4 billion. n Subsidy curtailment will hit the UK market in 2016. one quarter.

the price of a 3kW residential system in Australia fell by $0. as Figure 39 shows. and in Germany the cost of a sub-10kW system dropped by a similar amount to $1. from $6. according to first quarter of 2012. Japan has become by far the largest manufacturers’ margins. Manufacturers small distributed renewables market in the world are setting up new production lines and thanks to generous solar incentives introduced upgrading their existing facilities with improved in 2012 and a fall of almost 50% in the cost of technologies. while $3. Australia and Germany SYSTEMS. Source: Bloomberg New Energy Finance 55 . In the two years leading up to the third quarter of 2015. the lowest among the major markets. rather than from squeezing recent years. $/W have also seen recent price falls. albeit at a slower pace than in improvements.84/W.05/W in the average efficiency will rise by 20%.65/W to $1.66/W. US solar installer and financier SolarCity reported a decline in average system costs of $0. The first is the Further cost reductions are on the way.43/W to $2. CHAPTER 6 in the small distributed sector.18 per Watt in Q1 2015. PUBLIC CAPEX BENCHMARKS FOR RESIDENTIAL PV The US. There could be a reduction of at small-scale solar in that country to an average of least 36% in module costs within 10 years. Over the same period.77/W. These continued decline in the price of solar systems in will come from technological and manufacturing certain key markets. FIGURE 39.

Another catalyst driving growth of small. 2015. SMALL DISTRIBUTED CAPACITY INVESTMENT BY emerging economies to buy or COUNTRY. As of April 2015. Off Grid Electric and Bboxx. but it is thought that 23-35% of these will not be commissioned. As Figure 40 shows. added in 2016. usually for much less than reduces the subsidy. Small solar is supported Innovative financing is also helping people in by a combination of federal subsidies.1GW of new sub-1MW PV will be instance. for An estimated 9. the next largest market.CHAPTER 6 FIGURE 40. The number of customers with that country. according financing mechanisms that help make panels to a forecast by Bloomberg New Energy Finance. where annual home installations have 27/kWh. the rate of new capacity term contract to lease the roof and sell the power additions will drop as the government gradually to the householder. for instance. Build rates will average California’s success that Trina Solar said it had to 1. reduced the FiT for method is behind a rooftop solar revolution in 10kW-plus PV systems from JPY 29/kWh to JPY the US. tariff (FiT) programme. more affordable. come up with a rough Chinese translation for while the commercial and industrial sectors are “third-party leasing”.7 billion invested in the US. SolarCity recently bought a developer in Mexico In the US. are active in East Africa and have recently secured venture capital and private equity backing. One development in 2015 saw Japanese supermarket Top 10 countries. Businesses in China are so keen to replicate between 2015 and 2020. they would normally pay the utility. As stores. Under third-party leasing. in 2015. according to the (sub-1MW) PV applications had been approved. This financing effective as of 1 July 2015. labour costs will account developer Solar Power Network. the boom in residential solar looks that was offering the first leases to businesses in set to continue. more than three and a half times the $8.5GW per year over the same period.7GW per year until the end of the decade. small- scale project investment in the Asian nation increased 13% in 2015 to $31. A growing number of private companies now offer microfinance to consumers with no formal credit.7 billion. The most recent adjustment. Represents investments in solar PV projects with capacities below 1MW chain Trial Company install 32 300kW-400kW PV systems on its Bloomberg New Energy Finance estimates. up from approximately 8. $BN lease small solar systems. AND GROWTH ON 2014. the solar company enters into a long. and now plans to expand it to homes PV is predicted to more-than-double nationally there. most 56 .1GW of small increased 16-fold since 2008. The Japanese market is expected to expand further scale solar is the proliferation of innovative this year before falling back in 2017. expected to grow at a rate of 1.2GW Instead. some 34. Solar Energy Industries Association. homeowners pay nothing up front. which will sell for a larger slice of the overall cost of installing a the electricity to local utilities under the feed-in residential PV system. Trial will lease its roofs to Canadian project technology costs fall. Japan was by far the largest market for small distributed power in 2015. Similar financing models have spread elsewhere. Thereafter.

options for small-scale projects. The move Association. During the first paying a fair share of its costs. half of the year. and that solar owners are predicting given that this is an important aspect piggybacking on the electrical grid without of Chinese government policy. More California Solar Initiative. California property rights issues between developers and regulators voted to let home solar customers rooftop owners. in enacted changes or are considering doing so.000 homes and businesses in the US have on-site solar. the more than 40 that offer net metering have prompting a boom in the autumn that increased 57 . providing an important boost to installers in the biggest The UK residential PV market was rocked by the US rooftop market. while changes that dramatically reduced net metering it accounted for over 40% of total installations in fees and increased the fixed charges that solar the US. At the end of 2015. metering rules in a number of states.5 billion – onto the grid. a lack of suitable rooftops and Offsetting this piece of bad news. conjunction with state support mechanisms. including a lack of financing and shut down operations in the state. with California making up nearly One area of concern is the friction over net half of the residential market. Utilities argue that those fees although this was not as much as some had been are overly generous. Nearly half the states out of announcement mid-year of drastic cuts to the FiT. CHAPTER 6 notably the 30% Investment Tax Credit (ITC). permitting and regulatory hurdles. than 600. A number of factors are dampening prompted Sunrun and others to lay off workers development. such according to the North Carolina Clean Energy as the Renewable Portfolio Standard and the Technology Center. receive full credit for their excess power. which tracks the policy. distributed generation accounted the Nevada Public Utilities Commission imposed for just 15% of total installations in China. These generally require utilities to pay rooftop solar China’s small distributed market did take off in customers the retail rate for electricity they put 2015 – investment grew by 81% to $5. according to the Solar Energy Industries owners must pay for their grid service.

Taiwan saw an estimated $586 million of small- announced in early 2016 that it is considering scale solar commitments in 2015. New caps million. The to just $748 million. for instance. Banco Santander. but the engine of growth for small-scale distributed backed down in the face of opposition in March renewables on the continent. to introduce a leasing option These changes will doubtless signal the end of the for residential customers. road for some business models. while France fell 34% distributed capacity by 29% to $1. several 410MW of capacity per year. once projects qualify for the subsidy programme. The Australian Federal Government had proposed scrapping the small-scale solar scheme Ongoing subsidy curtailment is continuing to and reducing the threshold at which commercial take its toll elsewhere in Europe. million systems have been installed.ON and Trianel. equivalent to 54% of downstream solar companies have recently average deployment since 2011. Germany. Householders flocked to install solar on on the amount of capacity allowed will limit the their roofs in 2015 after the government clarified FiT for rooftop projects to a total of 350MW to rules on net metering. including E. 58 . because homeowners also receive an export Australia has one of the highest penetrations tariff that pays them for electricity generated by of residential rooftop PV globally – around 1.3 billion. industry. helped by the investing in the UK’s rooftop solar power market. said Alejandro Ciruelos. No changes are now expected. The Netherlands was an government later agreed to a smaller reduction exception to this trend. but not kill off the market entirely.4 the panels but not used.8 billion. at 64% rather than capacity investment there rising 22% to $765 86%. contracted by 57% 2015. with small distributed than originally proposed. In addition. announced partnerships with utilities. effective from 8 February 2016. meaning Santander’s managing director and head of one in six voters is now a stakeholder in the project finance for the UK. Bureau of Energy’s decision to increase its capacity The UK solar market is an attractive proposition quota for support from 270MW to 500MW.CHAPTER 6 the country’s year-on-year investment in small in 2015 to $1.

time this report went to press. the upper ranks.5kW installation at Al Rwadah school. there are also somewhat less and less rare in emerging economies outside larger projects underway – last year including the established terrain of China. some 208kW of an eventual 350kW had been while in Jamaica. the Honey Bun bakery said it installed at Shalamar Hospital in Lahore. In April 2015. anecdotal evidence points capital city. the Ministry of Agriculture installed a rooftop Pakistan is one of those best placed to move into system of 140kW. it was not possible shops. markets in Africa and South Asia had broken through to join the list of those worth hundreds In Jordan. woud invest in a 100kW solar system at its factory scene of much entrepreneurial activity to bring in Kingston. Nevertheless. while the European Union financed a to flurries of activity in a wide range of countries. with its unmet demand for power and its high insolation. financed by China. at the a 13. stadium reached operation in August last year. CHAPTER 6 EMERGING MARKETS AND SMALL PV Small solar systems of less than 1MW have become to residential rooftops. small solar systems and the accompanying finance 59 . the country In Costa Rica. and by July last year. 10. a 412kW system began generating 70% of millions of dollars a year alongside India and of the power for Amman Academy in the nation’s Thailand. with battery storage. However. a 260kW PV project on the roof inaugurated a 1MW PV system at its parliament of the Estadio Alejandro Morera Soto football building.In Kenya. schools and churches at Kitonyoni village to be sure whether any of these promising new in Makueni County.5kW system supplying the trading centre. In Egypt.

2004-2015. which raised almost $245 this level.6%. or PIPE. or IPOs. or NEX. The wind sector fared better. collectively.8 billion in 2015. as shown in Figure 41.7 billion. public market of which seven were solar.3 billion. $BN market equity raising in 2015 might appear surprising at first sight given that the year saw the highest ever worldwide additions of solar capacity (57GW) and wind (64GW). After two years of strong growth. At domestic PV installer.1 billion. n Funds raised as a result of initial public offerings. while issuance of convertibles dropped 38% to $3. to just $292 million.7 billion – a new record. n Individual renewable energy company shares saw fairground volatility in 2015 but. The drop in public ENERGY BY STAGE. n Solar investment on public markets jumped 21% to $10. the US by 21% to $12. but remained three times higher than at its last trough. they ended the year almost where they began it. Cash calls by technology oriented green power firms were relatively modest in number and size. but far short of FIGURE 41. OTC = over-the-counter 10 companies managed to float. with the NYSE Bloomberg Global Wind Energy Index gaining 27% in 2015. Figure 41 shows that IPO funding fell by over a third in 2015. Investment in wind plunged 69% to $2 billion. Aside from yieldcos. PUBLIC MARKET NEW INVESTMENT IN RENEWABLE the 2007 peak. less than a fifth of its peak in 2007. its second consecutive annual record. and that in biofuels halved for the second year running. in 2012. The WilderHill New Energy Global Innovation Index. Source: Bloomberg New Energy Finance 60 . however.8 billion. almost exactly matching the move in the S&P 500 index over the year. fell 0.CHAPTER 7 PUBLIC MARKETS n Public market investment in renewable energy companies and funds fell 21% to $12. with US “yieldcos” and the European equivalents accounting for more than half the total. n The respectable overall figure for public markets investment in 2015 disguises the fact that it was a lopsided year for equity raising by renewable energy companies. investment in renewable energy fell back in 2015 the largest new IPO was that of Sunrun. fell by 35% to $2. helped by $2 billion of convertible issuance from SunEdison. and of the share prices of specialist clean power companies in particular. but a bigger influence was probably the behaviour of stock markets generally. it was still three times greater than the most recent trough. in 2012. but secondary issues and private investment in public equity. deals inched up 4% to $6. Only PIPE = private investment in public equity.

The most extreme story company. and 10 members rising by anywhere floated partly to “pay a distribution” to its parent between 62% and 238%. a formula that further 8% during the next. Green Plains.000-tonnes-per-year Cottondale wood pellet 104-strong NEX falling between 55% and 86% production plant in Florida. and Green Plains Partners. and a term power purchase agreement. but then going into has proved successful for market leader SolarCity a slide during the second half.6% at 177. So the NEX ended since it floated in 2012. an owner and operator of was that of Chinese solar company Hanergy Thin ethanol plants in the US. matching the percentage change Among the non-solar flotations. Film. which saw its shares jump from HKD 2. raised Global Wind Energy Index gaining 27% over the almost $58 million in a convertible issue on Nasdaq. Enviva’s IPO in April 2015 raised money to build a warchest for future acquisitions and to repay There was huge variation at the individual stock borrowings incurred in the acquisition of the level with. and the NYSE secondary issues. operates a leasing model under which the with the WilderHill New Energy Global Innovation homeowner pays nothing up front but signs a long Index. raised $230 million on the index. for manufacturers such as Vestas Wind Systems and raised almost $26 million in three separate Gamesa Corporacion Tecnologia. for instance. Green Plains Partners during 2015. raised $172 million on Nasdaq. sectors. a in the US S&P 500 index and the MSCI ACWI world supplier of wood pellets. rising 9% in the first quarter. The company Renewable energy shares started the year well. Amyris. an ethanol and isobutanol producer. 10 members of the 650. by nearly 6% (see Figures 42 and 43).55.81 61 . or NEX. CHAPTER 7 million on Nasdaq for expansion. the year almost exactly where it began. Bloomberg Global Solar Energy Index edging up just 3% (Figure 44). but underperforming the Nasdaq Composite Berlin stock exchange. down 0. helped by the firm order books and Gevo. with for instance the NYSE Bloomberg the bio-jet fuel developer backed by Total. There was an Omaha-based ethanol storage and distribution variation between individual renewable energy provider. course of last year. Enviva Partners.

FIGURE 43. 2003 TO 2015 to end-of-day peak of HKD 7.8 billion. FIGURE 44. A large part rebased to 100 on 1 January 2015 Source: Bloomberg New Energy Finance of this was due to New York quoted yieldcos. while that in solar jumped 21% to $10. despite that sector’s good share price performance. at which point its market capitalisation reached the Hong Kong dollar equivalent of $42 billion. NYSE BLOOMBERG WIND. Nasdaq and S&P 500 rebased to 100 on 1 January 2003 biofuels halved for the second year Source: Bloomberg New Energy Finance running. with $9.7 billion out of the global Index values as of 12 January 2015. Public market investment in wind. Nasdaq. JANUARY TO DECEMBER 2015 Of the 21 fundraising deals worth more than $200 million each for quoted specialist renewable energy companies last year. six combined all three themes. not to resume for the rest of the year. MSCI ACWI world equity index and S&P 500 total of $12. 17 were in the solar sector. dropped even more quickly 62 . Investment in Index values as of 12 January 2016. SunEdison. falling to $292 million. NEX VS SELECTED INDICES.CHAPTER 7 FIGURE 42. SOLAR AND EST INDICES. before trading in them was suspended in May. in July. the proposed $2. This expansion included the joint $1.88 in late April.1 billion (Figures 45 and 46). SunEdison shares. Figure 47 shows that US share issues dominated renewable energy public market investment in 2015. Of the 14 biggest deals in 2015. which soared 71% Index values as of 12 December 2016. JANUARY TO DECEMBER 2015 The latter develops solar projects and manufactures polysilicon. and another big chunk to one solar company. NEX VS SELECTED INDICES.9 billion takeover (with its yieldco TerraForm Power) of US wind developer First Wind and then. 12 were by yieldcos – stock market vehicles that own portfolios of generating assets – and nine were secondary issues. Indices rebased to 1000 on 1 Jan 2015 from the start of 2015 to a peak in Source: Bloomberg New Energy Finance late July. slumped 69% in 2015 to $2 billion. and raised $2 billion via convertible issues during 2015 to help fund growth.2 billion acquisition of rooftop PV systems company Vivint Solar.

$BN investor concerns about the size of the company’s borrowings. Canadian businesses $353 million and German ones $182 million. $BN predictable dividend income at a time of rock-bottom interest rates. they tended to be called quoted project funds). 2015. yieldcos were riding high in share price terms in the US. losing FIGURE 45. saw its shares rise more than 100% from its IPO in 2013 to a peak in January 2015. NRG Yield. AND GROWTH ON 2014. 2004-2015. unlike most of the UK ones. and solar glass maker Xinyi Solar Holdings. CHAPTER 7 after news of the Vivint plan. were spun out of independent power producers or project developers and. PUBLIC MARKETS INVESTMENT IN RENEWABLE ENERGY BY SECTOR. For investors. At the start of 2015.2 billion. Chinese companies were the second most prolific behind American ones. PUBLIC MARKETS INVESTMENT IN RENEWABLE ENERGY 85% of their value by year end amid BY SECTOR. Among the Chinese money-raisers were polysilicon producer GCL-Poly Energy Holdings. $BN YIELDCO ROLLERCOASTER Yieldcos started to emerge back in 2013 as publicly listed platforms owning operating-stage assets. and the six listed had market capitalisations in the billions of dollars. UNEP which carried out a $148 million secondary share sale. by bringing in the capital of outside investors. while several of its peers saw gains of more than 50%. The North American yieldcos. provided those former parents Source: Bloomberg New Energy Finance. AND GROWTH ON 2014.1 billion. yieldcos FIGURE 47. 2015. Source: Bloomberg New Energy Finance. both in North America and in the UK (although in the latter. FIGURE 46. The largest public market deal in Top 10 countries renewable energy in 2015 was a Source: Bloomberg New Energy Finance 63 . raising $1. which issued $225 million of convertibles. PUBLIC MARKETS INVESTMENT IN RENEWABLE ENERGY offered a source of relatively BY COMPANY NATIONALITY. UNEP with capital to recycle into their businesses. while UK firms raised $1. the first yieldco.

raised $420 million in an IPO. Chancellor to withdraw renewable energy’s and 8Point3 Energy Partners. TerraForm Power. the pioneer among the UK quoted funds. suffering an 18% decline from its IPO price. Abengoa Yield. Of a total $12. the year at less than $13. yet another solar exemption from the Climate Change Levy. another yieldco this time floated to hold touched a high of almost $43 per share. Quoted project funds in the UK did not suffer solar. NRG Yield raised $620 million through another. North a vehicle floated in February 2015 to hold the American yieldcos secured some $5. their more subdued European equivalents another plotted a middle course between its US and UK $1.CHAPTER 7 secondary issue worth $688 million for TerraForm in the related market for energy Master Limited Power. Greencoat UK largest US panel makers. First Solar and SunPower.8 billion saw its shares slip 4% in 2015. set up as a joint venture between the two European flotations were delayed. The model to come under tougher examination from second largest deal was the IPO of TerraForm July 2015 onwards.5 billion. investment raised on public markets in 2015. while TerraForm Global Both went on to make further secondary share sank from its flotation price of $15 to less than issues. the same share price fall-out. caused the North American yieldco on the North American assets of SunEdison. the offshoot of the Spanish $6.4 billion and renewables assets of infrastructure company ACS. having Global. ended SunEdison’s foreign assets. although there was raised $864 million in two secondary issues in the modest impact from a decision by the country’s US. Wind. biofuel and transmission developer Abengoa. and a sell-off 64 . In Spain. and two yieldco. A sudden reassessment by investors of whether yieldcos were really growth stocks. Saeta Yield. a yieldco floated the previous year to take Partnerships. peers. It raised $675 billion.

CHAPTER 7 65 .

The increase will have been welcomed by cash-hungry start- ups and private businesses eager to expand. There was a more modest. n Next-generation biofuel manufacturers continued to attract investment. n Investment in early-stage venture capital jumped 60%.1 billion and $2. VC/PE NEW INVESTMENT IN RENEWABLE ENERGY BY Finance in 2015.CHAPTER 8 VENTURE CAPITAL AND PRIVATE EQUITY INVESTMENT n Venture capital and private equity investment in renewable energy increased by 34% to $3. albeit from a very low base.9 billion in 2010). it suggests that confidence is seeping back into a sector that was badly shaken by a number of high-profile VC-backed failures. Yet to those with longer memories (and who can recall that $9. Total values include estimates for The rise in investment in renewables undisclosed deals was part of a much larger growth Source: Bloomberg New Energy Finance. 28% uptick in the amount of late-stage venture capital. Nevertheless. Buy-outs are not included as new investment. $BN on 2013 and 2014 when just $2. while private equity made solid gains of 32%. There was a sharp rise in the volume of VC/PE investment in Indian clean power firms. the second successive year of growth. UNEP 66 . n Funding for the solar sector rose to its highest level for seven years thanks to a number of substantial deals involving US residential PV firms.9 billion flooded into this asset class in 2008 followed by $7. an improvement STAGE.4 billion in 2015. Deals worth $3. despite a steep fall in the price of oil and a lack of a clear policy in the US for most of 2015. the recent uptick will have looked modest.4 billion were recorded by Bloomberg New Energy FIGURE 48.5 billion was invested the sector. n The US remained the global centre for venture capital investment in renewables. Renewable energy appears to have regained some story for venture funds generally – 2015 was a of its former lustre in the eyes of the venture capital stand-out year for the asset class across many and private equity community after two lean different sectors and in numerous countries around years. although mostly these were project- oriented businesses rather than technology plays. 2004-2015.

Africa.1 billion recorded in 2013. $BN A closer look at VC/PE deals by type. 2015. Investment in seed and early-stage venture capital investments (Series A and B rounds) recovered to $384 million. VC/PE NEW INVESTMENT IN RENEWABLE ENERGY BY STAGE. according to data gas and coal prices. ending the year Source: Bloomberg New Energy Finance. The aggregate value of venture capital investment growth story. Investment in later-stage venture capital (Series C. in renewables had to ply their trade against the backdrop of a skittish stock market unlikely to be conducive to exits. VC/PE investors published by Preqin. Against that. having fallen to around $240 million in both 2013 and 2014. This 2015 figure was still only about half the average of the last decade. reveals modest increases across all three main categories – early and late-stage VC and PE – albeit from low bases for each. $57.5 billion in 2014 and more than double the Latin America and India – defied media predictions that investment would be choked off by falling oil. the third successive year to $138. up from $93. an alternative assets research firm.8 billion. Total values include estimates for undisclosed deals rounds) also rose. AND GROWTH ON 2014. FIGURE 49. having fallen as low as $535 million 67 . as shown in Figures 48 and 49. CHAPTER 8 It was also part of the wider clean energy the globe. UNEP one-third higher at $923 million. the US. A surge in new money – deals in all economic sectors globally increased for driven by buoyant markets in China. D and pre-IPO Buy-outs are not included as new investment.

Fenix International. mobile communications and round included GDF Suez. its highest level since 2011. was the $500 million jump in private equity commitments to $2. Investors in the Fenix Series B funding of renewable energy. However. $BN of small hydro. UNEP the previous year. Biomass and waste-to- energy. International founder and CEO Mike Lin. UNEP communities in Africa. $BN dollar terms. geothermal and marine. though it garnered less FIGURE 51. which produced a handful of small deals each. As a result. plus power management firm Schneider and improve their quality of life. while investment in wind increased slightly to $390 million. The deal also illustrates the importance of corporate Boston-based Yeloha is also about enabling access. 2004-2015. The falling cost of solar panels over the last few years has dramatically increased the number of potential users of that technology.” said Fenix Electric and telecoms giant Orange. The $2. grow their businesses Engie.CHAPTER 8 in 2013. 2015. for instance. and represented an increase of almost $1 billion on 2014. Total values include estimates for undisclosed deals. This was the only sector to see a major improvement – biofuel trailed a distant second with Buy-outs are not included as new investment. to technologies that are designed to help make solar available to new markets and previously unreachable sections of society. As in previous years.6 million in Series B funding to help it supply mobile. was still ahead SECTOR. unchanged on Source: Bloomberg New Energy Finance. solar companies led the field (see Figures 50 and 51). at least in SECTOR. VC/PE NEW INVESTMENT IN RENEWABLE ENERGY BY improvement in 2015. AND GROWTH ON 2014. Total values include estimates for undisclosed deals enabled solar systems to off-grid Source: Bloomberg New Energy Finance. the biggest FIGURE 50. raised $12. “ReadyPay Solar is an innovation at the intersection ground. just $523 million. The company secured 68 . Buy-outs are not included as new investment. operator of Europe’s microfinance that empowers East Africa residents biggest natural-gas network and now renamed to light their homes.1 billion. venture investors have shifted their focus away from improving the performance of hardware. venturing in getting renewable start-ups off the but in the developed world.4 billion in VC and PE funding commitments for solar was the most seen since 2008. VC/PE NEW INVESTMENT IN RENEWABLE ENERGY BY than $100 million.

sales leads and customer relations. but unlike Hudson Clean Energy Partners. Twitter co-founder Evan Williams. for instance. closed a $300 million debt and equity The great quest within the biofuel sector remains funding round led by Franklin Square Funds in the production of commercial volumes from non- 2015. The company provides third-party financing food crops or waste that can compete with sugar for solar leases or power purchase agreements or corn-based ethanol and conventional fuels. The fall in the Third-party ownership remains the dominant model price of oil over the course of 2015. uncertainty for financing residential solar installations in the on policy in the US. Software is also being used to help reduce the cost of solar installations. as well as the length of time US. as backing the many residential solar companies that well as $220 million in debt finance.5 million of Series A funding to US- based Sighten through his venture capital firm Obvious Ventures. for instance. but that is changing. committed $3. Direct ownership via loans and money needed. financing options improve. venture investors they are mainly focused on and new backer Tiger Infrastructure Partners. One such loan provider is New Jersey-based company Sunlight Financial. The company has developed a platform for solar developers and financiers to help reduce ‘soft costs’ such as administration. which it says are the priciest single part of installations in is gaining popularity as costs continue to fall and the US residential solar market. through a network of local solar installers. processing. have deterred all but a 69 . The power they buy is supplied by ‘sun hosts’ who receive free installation of solar panels in return for sharing access to the energy they generate. CHAPTER 8 $3. Sunnova Energy.5 million in Series A funding to launch an online platform that enables people who cannot put up their own panels (such as residents of an apartment block) to buy solar energy through an online subscription. One of the major challenges facing developers of conversion technologies is financing. It Private equity players continue to be interested secured PE expansion capital of $80 million from in the fast-growing US solar market. an existing investor. have sprung up in recent years.

owner of the world’s second-biggest airline. plus the fact that the city has agreed to maintain the supply of waste for 25 years. The wind sector took $390 million in VC/PE in 2015. In one such deal. would be the equivalent of approximately 2% of the 3. UNEP BioEnergy. 2015. VC/PE NEW INVESTMENT IN RENEWABLE ENERGY BY the company will begin supplying REGION. $BN that the city will pay Enerkem for every tonne of municipal waste it uses. with deliveries increasing to 90 million gallons (340 million litres) annually by 2021.9 billion gallons the carrier used in 2014. London-based private equity firm Actis created Ostro Energy. there were a few private equity Venture capital investment in new wind technology investments in the next-generation biofuel sector is something of a rarity. $BN United as early as 2018. a designer $115. United Continental Holdings. at its production facility in Edmonton. given that it is a mature last year. a Quebec. French start-up Ideol. VC/PE NEW INVESTMENT IN RENEWABLE ENERGY BY project’s viability is the CAD 75 REGION.000 flights. Key to the received $4. however. triple wind capacity to 60GW by 2022. The few investors. It is thought that FIGURE 53. a producer of jet fuel and renewable diesel from household waste. It is significant that the four main investment took place against a backdrop of cellulosic ethanol plants in the US were developed pro-renewable policies introduced by India’s BJP by large corporations such as DuPont. with an investment of $230 million. 2004-2015. AND GROWTH ON 2014. UNEP project in Rajasthan and aims to provide 800MW of capacity across several Indian states by 2019. 2015 also saw the largest single investment by an airline in a renewable fuels company. It Buy-outs are not included as new investment.4 million in a second seed funding 70 . secured 2015.CHAPTER 8 FIGURE 52. Buy-outs are not included as new investment. an Indian wind developer. The company has plans to develop a similar project in Montreal. Enerkem.4 million to fund a methanol-to-ethanol unit of floating foundations for offshore wind farms. energy source and most R&D is undertaken in- based company that produces cellulosic bioethanol house by the large turbine manufacturers. Total values include estimates for undisclosed deals invested $30 million in Fulcrum Source: Bloomberg New Energy Finance. which government. The target. In early from non-recyclable household waste. more than half of which was invested in a single deal. enough for about 20. Total values include estimates for is already building a 50MW wind undisclosed deals Source: Bloomberg New Energy Finance. These include a target to almost- commissioned a 30 million-gallon facility in 2015. Nevertheless.

Welspun. Asia is occupying steel maker in Taiwan. While the US remains the spiritual home Indian renewable energy companies attracted of the venture capital and private equity investor – $548 million in VC/PE funding in 2015. This was up sharply on the previous year thanks has been a marked decline in Europe since 2012. almost twice the among other things. from its current level of 30%. and a $165 million private equity investment in there has been a rise in venture investing in Asia. The company recently signed a deal with according to a report by PwC and the US National the China Steel Corporation. CHAPTER 8 round.8 billion of early-stage November 2015 to raise the share of non-fossil-fuel finance across all sectors in 2015. rather are that more will follow. according to Preqin. to jointly develop turbines an ever-larger share of the market – for the first using Ideol’s technology. meanwhile. which was the power capacity in the country’s power mix to 40% second highest full year total of the last 20 years. produced The distribution of VC/PE investment is shaped by. The a commitment at the Paris climate conference in US deployed a total of $58. 927 deals. Greater China recorded more deals in a year than Europe. a New Delhi-based wind developer. the signs These trends are part of a wider picture. by 2030. policies and countries’ changeable economic fortunes. India made than something specific to renewable energy. a 38% increase on the year before – there US. national renewable energy number seen in 2014. 71 . At the same time. time ever. India. the largest integrated Venture Capital Association. While two big deals do not make a trend. more than the country accounted for 65% of the global total all of Europe ($301 million) and second only to the in 2015. Significantly. to two large deals – the $230m investment in Ostro as shown in Figures 52 and 53.

in spite of falling fossil fuel prices and policy instability during the year. But it was 23% below its 2013 high of $11.8 billion. The$2. which was largely caused by higher investment in solar R&D in Europe. which in FIGURE 54.8 billion. Solar secured two and a half times as much investment as wind. n Solar continues to dominate renewable energy R&D. 2004-2015. Spending in Europe fell 8% compared to 2014 while that in China rose 4%.6 billion.7 billion.5 billion. at $1. R&D investment in individual sectors also changed by only small percentage figures compared to Source: Bloomberg. as shown in Figure 54. Despite the more challenging backdrop. n China’s R&D spending challenged Europe’s for the first time. the US edged up 1% to $1. Investment in renewable energy research and directly relevant only to the biofuel sector. n Government R&D was 3% lower than in 2014 at $4. unchanged on 2014.7 billion. but the fall was just offset by a 3% rise in corporate R&D to $4. with spending rising 1% to $4. and three times more than biofuels. but development held up in 2015 in spite of some natural gas prices also fell – the US Henry Hub benchmark dropped from $4.4 billion. each investing $2.5 billion and equal to that in all the other sectors combined. At the collapse in the oil price – from $115 per barrel in June 2014 to just $27 by the end of 2015 – was same time. Bloomberg New Energy Finance. Germany $BN and South Africa squeezed prices lower than under the previous systems. In third place. including falling fossil fuel prices and some reduction in policy support.1 billion. at $1.7 billion. n The year ended on a high note at the Paris climate conference as governments and billionaire investors announced two major initiatives to raise investment in clean energy R&D. IMF. there was a broader move away from subsidies for renewable generation and towards auctions. although 23% lower than its 2013 peak of $11.CHAPTER 9 RESEARCH AND DEVELOPMENT n Research and development spending on renewable energy technologies was almost unchanged at $9.70/MMBtu to significant headwinds. total spending on renewable energy R&D remained steady at $9. IEA.1 billion in 2015. down 3%. various government agencies 72 .34/MMBtu over the same period – stiffening the competition for wind and solar too. R&D INVESTMENT IN RENEWABLE ENERGY. countries such as Britain.

US spending was up Source: Bloomberg. 73 . European R&D spending last year was lower than in any year since the financial crisis in 2008. while China’s new record was the result of a decade-long march in which R&D investment has risen every year since 2005. government commitments and research spending by specialist renewables companies. This makers and advisors who see research into new reflects the improved information that became renewables technologies as vital in the battle to available during the course of last year on both curb climate change. Note that the 2014 R&D figures shown in this shown in Figures 54 and 55. 1 Beneath the relatively steady FIGURE 55. 2015. Bloomberg New Energy Finance. now shows that report show a significant downward revision from there was a setback to R&D spending after 2013 those published in the 2015 edition of Global – something that will concern those energy policy- Trends in Renewable Energy Investment. European research and development fell 8% and Chinese rose 4%. IMF. The trend.5 billion. CHAPTER 9 the previous year. $BN headline figures for 2015. AND GROWTH ON 2014. CORPORATE AND GOVERNMENT R&D RENEWABLE ENERGY INVESTMENT BY TECHNOLOGY. but only half its 1 The corporate R&D figures in this and previous Global Trends reports are those published by specialist renewable energy companies. there is no disclosure on the proportion of R&D spent on clean energy as opposed to other sectors. as shown in Figure 56. China matched Europe’s spending on renewable energy R&D for the first time. with the two territories both deploying $2. IEA. there lie some more significant regional changes. the latest step in a longer-term shift. In 2015. as shown in Figure 55.8 billion. various government agencies 1% at $1. In the case of most conglomerates and diversified industrial groups active in renewables.

This sort of innovation has produced dramatic cost US President Barack Obama launched Mission reductions over the past few years. Mexico. IEA. If members make good on this promise. Japan. IMF. nuclear. South Korea. and also introduced a new or whether renewables will receive the lion’s share Clean Power Plan designed to cut the country’s of its investments. Both “truly transformative” novel technologies.CHAPTER 9 FIGURE 56. while in technologies. but the biggest boost came is more prosaic – relentlessly to reduce costs so at the end of the year during the Paris climate that renewables undercut fossil fuels in more and conference with the announcement of two major more locations. where they are often already competitive. France. Innovation. Sweden. $BN the pace of renewable energy innovation to match the scale of the challenge. surprisingly. aimed at tackling private sector barriers to R&D. various government agencies At the same time. Bloomberg New Energy Finance. Microsoft level in 2009 at the peak of its “green stimulus” founder Bill Gates launched a sister organisation programme. India. as opposed to energy-smart generating emissions by 32% by 2030. Italy. not simply the sunniest or windiest. China. Norway. and the University of California $1 billion. agriculture and energy efficiency. India Prime Minister Narendra Modi committed the or other low-carbon areas. new initiatives. industry. Chile. The group seeks to back country to installing 100GW of solar by 2022. United Arab Emirates and. The eventual size of the fund is unclear. The Energy Breakthrough Coalition is supported The other significant change was the growth of by high profile investors such as Vinod Khosla and renewable energy R&D spending in areas beyond George Soros. but there were some encouraging policy While the arrival of a big new investor in early- moves that could lead to higher commitments in stage clean energy technologies is of course most the future. the US. where investment jumped 8%. Germany. Middle East) where it leapt 16%. R&D spending remained below its 2013 levels last year. The group APAC” region (Asia-Pacific excluding China and will provide seed. and “other EMEA” (Africa and the in electricity generation and storage. including capital to help commercialise the results of an India. Indonesia. through to 2020. The US renewed its Investment Tax welcome. government R&D on renewable energy alone could perhaps reach $10 billion by 2020. Denmark. AND GROWTH ON 2014. but Gates has RESEARCH INITIATIVES reportedly committed to invest $2 billion through the fund. the UK. angel and Series A investments India). carbon capture and storage. whereas developments underpin the case for further R&D the day-to-day business of clean energy innovation in renewable energy. Source: Bloomberg. 2015. up 10%. in the “other expanded public sector R&D pipeline. Brazil. transport. Member countries – including Australia. Saudi Arabia – committed to double their clean energy R&D spending within five years. Canada. CORPORATE AND GOVERNMENT R&D RENEWABLE of 20 countries intended to raise ENERGY INVESTMENT BY REGION. and plans to mobilise long-term the traditional heavyweight regions. it is not yet clear how much impact Credit (solar) and Production Tax Credit (wind) the Energy Breakthrough Coalition will make. an inter-governmental organisation 74 .

One example is Innovation can improve the competitiveness of the widespread switch to producing cells with four renewable energy technologies either by cutting busbars. of production. or PERC. CHAPTER 9 R&D PRIORITIES At the same time. 75 . design improvements are steadily raising the efficiency of solar PV. Another is the introduction of and raw materials required to produce them. by three quarters and the cost by half. Roughly half the generated by the introduction of stencil printing. from $0. Silicon raw material is increasingly being produced through a new fluidised-bed These kinds of developments have reduced the reactor process that cuts the electricity required cost of solar modules by four fifths since 2008. per MWh. technology. and which reduces the amount of silver required for the half from capital cost reductions. which helps reduce the amount of energy lost to the unwanted In solar. capital costs are being shaved at every stage ‘recombination’ of electrons. amount of sunlight converted into electricity. or by ‘black silicon’ anti-reflective coatings based on raising their efficiency. Both approaches reduce the levelised cost of Yet another is the recently developed ‘passivated electricity.47 per Watt lost to ‘kerf’ or sawdust. Savings have also been in 2015 to $0. often by reducing the energy electrical losses. the research firm expects that by 2030 and feed it to external cables. or LCOE. so increasing the amount of the nano-structure of moth eyes. solar will undercut fossil electricity generation in all but the least promising locations. reduction will be driven by a rise in efficiency. The with the promise of more to come. emitter rear cell’. As a result of this ‘fingers’ and ‘busbars’ that collect the electricity innovation. increasing the energy produced by each nominal MW of capacity. so reducing their capital cost. rather than two or three. Bloomberg widespread adoption of diamond wire saws New Energy Finance forecasts that the average allows manufacturers to cut the blocks of silicon cost of crystalline silicon cells will fall by well over into thinner wafers and also reduce the amount a third over the next decade.30 per Watt in 2025.

These include to some hesitation over biofuel research projects the HybridDrive system from Winergy. Agency announcing an unexpectedly high biofuel blending mandate for 2016. The load factor – the amount of energy Another is the potential for dramatic reductions produced as a percentage of nameplate capacity – in the weight of those substructures. These are currently in the construction of production plants by companies their infancy. 76 . Bio jet-fuel was a relative bright projects impossible. Portugal. installed or planned in Scotland. Bloomberg in 2020. with US Department of Defense funding for of floating wind turbines. Some 15MW of floating capacity was installed and Red Rock with a total capacity of 100 million worldwide at the end of 2015. particularly in those regions 86 million gallons. and construction time. three quarters of the way through 2015. One is that since the turbines onshore wind. In practice.CHAPTER 9 In the wind sector. Again. turbine 30MW demonstration array off Scotland. 3 where they are potentially more competitive. A perennial target of wind R&D has been to reduce the weight of the nacelle at the top of the Investment in biofuels R&D fell just 3% in 2015. are mature technologies adopted and the Renewable Fuel Standard (RFS2) biofuel from the oil and gas industry. This requires the development spot. five years. a tower – because weight at the top requires the resilient performance given their exposure to the entire structure to be made with additional strong collapsing oil price. In cost-competitive. and is at the dockside and towed into position without forecast to rise to 37% by 2025. the position of material. and operators optimise wind farm be completed in 2018. relentless innovation in each location. Nevertheless. the sector in the US that some its elements. France and Germany. cellulosic ethanol against a glut of cheaper corn turbine size. In offshore wind. 2 the need for expensive specialist installation vessels. Japan. and entire wind farms could be has delivered both reduced capital cost and higher built with a standardised substructure design. This imperative ethanol in countries such as the US and Brazil is has produced a number of hybrid drive trains safeguarded by blending mandates. due to heights grow. 3 Bloomberg New Energy Finance. will be 74% lighter per MW performance through ‘big data’ analysis. from Moventas and the Digital Displacement Confidence was helped in the US in December 2015 hydraulic system now integrated into the 7MW by a statement from the Environmental Protection Mitusubishi Sea Angel turbine. and actual production only 1. The than its first demonstration turbine in 2008. 20 August 2015. with pilot projects gallons. the potential to reduce the capital cost of a turbine is somewhat limited by the fact For most of the year. in 2020. pushing up the expense. FusionDrive on the part of both companies and governments. Floating wind is still expected Marine energy continues to be another area for to be twice as expensive as conventional offshore busy entrepreneurial and R&D efforts. there have also been gains. 9 October 2015. As a result. Emerald Biofuels pace. however. the Hywind continues to rise as technology improves. Research Note: Route to offshore wind 2020 LCOE target. efficiency. the LCOE has fallen by 15% over the float. Yet average load factor of new wind farms has risen another is that the turbine can be fully assembled from less than 20% in 2008 to 25% in 2015. with production mandates – that pitted pit (non-food) advances expected in areas such as blade length. there is no need to design an individual past six years and is forecast to fall a further 18% foundation tailored to the condition of the seabed over the next 10 years. from $176/MWh in 2015 to $122/MWh Solazyme and Gevo to focus on biochemicals. but it would which reduce both weight and cost compared to have been unsurprising if the fall in crude had led conventional three-stage gearboxes.6 where sea depths make conventional fixed-bottom million gallons. One way to grow the offshore wind industry is to US cellulosic ethanol production capacity was just open new markets. but R&D spending is now gathering including Fulcrum Bioenergy. such as ‘monopile’ or ‘jacket’ faced conflicting regulations – the 10% ‘blend wall’ foundations. In recent years this has forced second- offshore wind is forecast to fall 30% over the next generation biofuel developers such as Amyris. Research Note: The future cost of onshore wind. but supporters argue that the technology New Energy Finance estimates that specialist wave has inherent advantages that could make it and tidal stream technology companies have had 2 Bloomberg New Energy Finance. the LCOE of ethanol.

4 Bloomberg New Energy Finance. Pelamis Wave and OpenHydro were hoping to complete the Power and Aquamarine Power) went out of installation of demonstration arrays of several business in 2014-15 having spent more than $100 megawatts during the course of 2016. 4 Not all has advanced further and faster than wave. In general. CHAPTER 9 cash burn of nearly $1. point where companies such as Atlantis Resources three wave companies (Oceanlinx. tidal stream technology accumulated losses or as capitalised R&D. Research Note: Analyst Reaction Tidal and wave H1 2016 – the gulf widens.2 billion. 77 . either recorded as million each. to the of that spending has been successful: for instance. January 2016.

just 1% up on 2014 and less than half the figure reached in 2010. this is to be ($42.8 billion. a sign of how large the sector has grown in terms of both annual sales and installed capacity. the total rising just were subject to purchase. n Private equity buy-outs came to $3.7 billion takeover of E. 2004-2014. the largest figure ever over 10 times from 2004’s $8. some 36% higher than in 2014 and the biggest tally since the record year of 2009. as Figure Total values include estimates for undisclosed deals.2 billion. A big majority $93. These totalled $69.9 billion seen in 2015.9 billion. In a sense. n The only category not to show relative strength last year was public market investor exits. down 3% from the all-time high reached the previous year. 58 shows.CHAPTER 10 ACQUISITION ACTIVITY n Acquisition transactions in renewable energy jumped to a record $93. mean greater opportunities for asset owners to consolidate portfolios and for manufacturers to look to build revenue and profits by taking over rivals. up 7% on the previous year. n The largest category of acquisition activity was.3 billion in 2015. and yieldco TerraForm Power’s $2 billion acquisition of more than 90% of the 1GW North American wind portfolio of Invenergy. as usual. More projects operating. $BN capacity more than sevenfold in the case of wind (to 426GW).5 billion.9 billion in 2015. Wind is still the largest sector for acquisition transactions. asset purchases and refinancings.9 billion. and higher annual sales.6 billion activity in renewable energy. with new investment multiplying nearly FIGURE 57. Figure 57 shows a strong upward trend in acquisition and companies worth an estimated $57. wind assets Source: Bloomberg New Energy Finance 78 . n The biggest individual deals involving the purchase of pure-play renewable energy assets and companies included Macquarie’s $2. some 63% higher than in 2014 and the highest figure since the record year of 2011. In 2015. which were worth $1.ON’s Spanish and Portuguese clean power businesses. down 9%) was made up of asset expected – the sector has grown strongly over that 12-year period. to the record and up 9% on the previous year. n Corporate mergers and acquisitions were worth $19. and from almost zero to nearly 240GW in the case of solar. ACQUISITION TRANSACTIONS IN RENEWABLE ENERGY sixfold and cumulative installed GW BY TYPE.

7 billion. but to end by M&A deals for project-related businesses. the 2015 data are dominated at the top equity buy-outs were up more than 100%.2 billion. up 10% on the previous year. $BN Alstom. up they did not complete in the calendar year. and First State Wind Energy Investments’ This was dominated by the purchase of solar farm $956 million deal to buy Finerge-Gestao de assets. and SunEdison’s $1.4 billion. market exits and PE buy-outs both came to less than $1 billion.6GW acquisition activity worth $2. CHAPTER 10 FIGURE 58. Source: Bloomberg New Energy Finance turbines and grid businesses as well as wind and hydro. but the piece that grew most sharply Acciona. Enel-EGP and SunEdison-Vivint because in dollar terms in 2015 was corporate M&A. Its total for 2015. CORPORATE M&A Takeovers were in the air in the renewable energy sector in 2015. such as Macquarie’s $2.4 billion. some 16% higher at $23. and German wind turbine maker Nordex’s plan to buy the wind business of Spain’s Acciona for $880 million.7 billion. Part of the fivefold from 2014 and the second highest motivation for the move was to accelerate the figure ever. Public market exits and private Instead. 2004-2015. ACQUISITION TRANSACTIONS IN RENEWABLE ENERGY energy business of French group BY SECTOR. First Wind Holdings by SunEdison and TerraForm of $29.ON’s Spanish and Portuguese clean power businesses. Corporate Projectos Energeticos.7 billion. none of these four made it into the corporate M&A figures for 2015 – GE/Alstom because it involved gas. Biomass and waste-to-energy produced acquisition deals worth $2. down 24% and the lowest total since 2005. Corporate growth of SunEdison’s yieldco spin-off. while biofuels generated transactions worth $1. while public wind farms and co-generation plants.9 billion purchase of US project developer deals of more than $3 billion. behind only 2007. a Portguese operator of M&A in solar fell 12% to $4. geothermal saw and polysilicon maker (SunEdison) with 1.9 billion purchase of fellow US company Vivint Solar. coal and nuclear Total values include estimates for undisclosed deals. and Nordex- transactions. with events such as the completion of General Electric’s $9. up from almost nothing in 2014. Power. since it brought a solar developer Among the other sectors. was up 9% and a record figure.7 billion takeover of E.3 billion. Solar was the only other sector seeing acquisition the $1.5 billion purchase of the 79 . up under its belt into the wind business. TerraForm M&A dominated the 2015 total. 161% on the year at $10.8 billion. There was also Enel’s bid late in the year to buy out the minority shareholders in its Enel Green Power offshoot for $3. However. the third highest figure ever for wind. totals of just $1 billion and $3 billion respectively.1 billion. The First Wind transaction was particularly noteworthy. with a tally of $1.

There were $23. and Bluewater Power Distribution’s TerraForm Power’s $2 billion acquisition of 91% acquisition of Unconquered Sun Solar Technology. of its 288MW Meerwind Sud und Ost offshore wind farm phase one in German waters.4 billion of asset acquisitions and refinancings last year. and to expand in emerging markets.9 billion in solar. catching up the US figure of $25. $BN reduced consumption thanks to energy efficiency and the digital revolution. The move was part of Engie’s plan but hardly used at all on the other side of the to double renewable energy capacity in Europe Atlantic. renewable energy sources.9 billion were for projects in the most mature technology. In its statement Many of these were relatively small. up 160% at $8. there was a transactions were the Americas excluding the US slew of interesting transactions completed. and by 2004-2015.3 billion. and the only other renewable energy technology excluding large hydro to see asset deals of more than $1 Total values include estimates for undisclosed deals. 80 . The latter was One transaction with particular symbolic particularly significant as it was by far the largest significance was the purchase by Engie. the newly renewable energy project bond issue in Europe renamed French gas and electric utility GDF Suez. and Blackstone’s $1. down 22% at $3. there were 599 asset acquisitions and the Solairedirect transaction with the words “solar refinancings logged in renewable energy in 2015. greeted Overall. Gerard Mestrallet. and Brazil. up 5% at in the hundreds of millions of dollars rather than $4. project bonds have been commonplace in the US for $223 million. of in recent years – coming after a period in which Solairedirect.2 billion.CHAPTER 10 FIGURE 59.2 billion. Power. within a decade. a Paris-based solar project developer. and included yieldco Topcell Solar. China. characterised or their London-based equivalents. down 13% on the 2014 figure.6 billion. some $42.” PROJECT ACQUISITIONS Of the $69. and there two months earlier. These included China-owned Bluestar Elkem See Figure 59. Investment’s purchase of Singapore-based PV panel manufacturer REC Solar for $462 million. quoted project by decarbonisation and the development of funds. by handing it the operating-stage assets of First Wind. announcing the change of was a big representation of projects bought at company name. Engie’s chief executive. billion was biomass and waste-to- Source: Bloomberg New Energy Finance energy with $1. down 28% on the year.5 billion. The move also gave SunEdison itself a Europe saw a 12% increase in asset acquisitions portfolio of wind farm development assets adding and refinancings in 2015. The next largest regions for these In the category of more classical M&A. ASSET ACQUISITIONS AND REFINANCINGS BY REGION. wind. Engie said: “The energy transition the operating stage by North American yieldcos has become a global movement. to $23. is becoming totally competitive”.2 billion – nearly up to more than 1GW. of the 1GW North American wind portfolio of a Canadian lightweight PV panel maker. up 16%. mostly and Brazil. larger. both of Invenergy.1 billion refinancing the last two for undisclosed sums. Motech The largest deals were scattered through different Industries’ takeover of Taiwanese PV cell maker developed economies. some 9% down in the 2014 figure.

to $328 million sale of a stake in Abengoa Yield by Centerbridge Capital Partners for $1. and the wind turbine manufacturing arm. Saeta Yield. also had a strong yieldco flavour – the sale by Actividades de Construccion y Servicios. Senvion.2 billion. Spanish infrastructure company The biggest public market investor exits of 2015 Abengoa. to was Suzlon Energy’s sale of its Germany-based stock market investors for $503 million. or ACS. The top private equity buy-out of the year of 51% of its project-owning arm. CHAPTER 10 OTHER TYPES OF ACQUISITION its former parent. 81 .

industrial buildings or equipment. 1 Further definitions and explanations can be found in Private Financing of Renewable Energy – a Guide for Policymakers. decide that the investment will definitely go ahead. whether from internal company balance sheets. using money from their internal resources. the proceeds of which will go entirely into clean energy and other environmentally-friendly projects. Hamilton. LEVELISED COST OF The all-in cost of generating each MWh of electricity from a power plant. Chatham House. December 2009. 82 . construction. Also referred to as “flotation”. TAX EQUITY Tax equity investors invest in renewable energy projects in exchange for federal tax credits. from debt finance. or from equity finance. UNEP Sustainable Energy Finance Initiative. operation and maintenance. FINAL INVESTMENT DECISION Moment at which the project developer. VENTURE CAPITAL AND All money invested by venture capital and private equity funds in the PRIVATE EQUITY (VC/PE) equity of companies developing renewable energy technology. ELECTRICITY (LCOE) including not just fuel used but also the cost of project development. or group of investors and lenders. Justice/K. It excludes refinancings. INITIAL PUBLIC OFFERING (IPO) A company’s first offering of stock or shares for purchase via an exchange. financing. GREEN BOND A bond issued by a bank or company. and Bloomberg New Energy Finance. The project may or may not be commissioned in the same year. FEED-IN TARIFF A premium rate paid for electricity fed back into the electricity grid from a designated renewable electricity generation source. NON-RECOURSE PROJECT Debt and equity provided directly to projects rather than to the companies FINANCE developing them. The asset finance figures in this report are based on money committed at the moment of final investment decision. ON-BALANCE-SHEET Where a renewable energy project is financed entirely by a utility or FINANCING developer. INVESTMENT TAX CREDIT (ITC) Allows investment in renewable energy in the US to be deducted from income tax. MERGERS & ACQUISITIONS The value of existing equity and debt purchased by new corporate buyers (M&A) in companies developing renewable technology or operating renewable energy projects. PRODUCTION TAX CREDIT The support instrument for wind energy projects at federal level in the US. The issuer will normally label it as a green bond. S.GLOSSARY GLOSSARY1 ASSET FINANCE All money invested in renewable energy generation projects. Some investment will translate into capacity in the following year. (PTC) PUBLIC MARKETS All money invested in the equity of publicly quoted companies developing renewable energy technology and generation. CAPITAL EXPENDITURE Funds used by a company to acquire or upgrade physical assets such as property.

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