BNEF Forecasts Big Global Investment in Clean Energy, with Eyes on Asia and Africa

Globally, $7.7 trillion will be invested in new generating capacity by 2030, with 66%, or about $5.1 trillion, of that going on clean energy technologies including hydro, according to Bloomberg New Energy Finance (BNEF.)

Half of the renewable energy investment will come from Asia, the region where power capacity will grow the most, accounting for $2.5 trillion of it.  The Americas will account for $816 billion, Europe at $967 billion, and The Middle East and Africa will invest another $818 billion.

The report shows solar power outnumbering other renewable technologies in every region over the next 15 years with small-scale solar attracting the largest single share of cumulative investment from 2013 to 2026 across both developed and developing countries. Capacity will expand the most in Asia, where new solar sites will exceed gas and coal combined.

Asia’s Massive Investment

The Asia-Pacific region will invest $3.6 trillion in new power capacity through 2030, with $2.5 trillion to be invested in renewable energy. Solar photovoltaic (PV) will see “spectacular growth” in the region, with nearly 800 gigawatt (GW) of rooftop and utility-scale PV added.

China will be the biggest market for new power generation. The country is expected to boost power demand by 115 percent through 2030, adding a net 1.4 trillion watts of new generating capacity. Coal generation will dominate the power mix for the next 10 years but will peak in 2024, says BNEF.

This will require capital investment of around $2 trillion, 72 percent going towards renewable energy generation. China will add approximately 1,000GW of renewable capacity over 2013 to 2030, of which most will be solar PV and wind.

A recent EY report noted that Chinese government has announced plans to install 70GW of solar capacity by 2017, twice its previously announced target of 35GW by 2015. Pollution reduction has become an important driver for renewable energy investment in China, which has recently declared a “war on pollution.”  See CleanTechIQ’s analysis on what’s driving China’s investment in clean tech.

India is forecast to see a quadrupling of its power generation capacity, from 236GW in 2013 to 887GW in 2030, with 169GW of the additions taking the form of utility-scale solar and 98GW onshore wind. India’s total investment will be $754B through 2030, with $477B of that in clean energy, sparked by economic and population growth, changes in energy consumption and adoption of more electricity-intensive appliances, and a reduction in the fraction of the population which currently has no access to electricity at all.

Southeast Asia is also an important growth area with 233GW of new clean energy installations.

Small-Scale Solar Dominates in North America

The Americas region will invest $1.3 trillion in 557GW of new power generating capacity through 2026, driven by shale gas, coal retirements and increasingly competitive clean energy. The U.S. will see more than 100GW of coal retirements through the next decade due to clean energy policies implemented in the US and Canada.

Wind and solar will see their share of generation increase from 5 percent to 18 percent by 2030. Small-scale solar will be the most important form of clean energy, accounting for 18 percent, or a total of $231B, of all investment in power-generating capacity in the region from 2013 to 2026.

Europe Continues to Lead in Wind

The increasingly attractive economics of wind and solar PV will become the main driver of capacity additions in Europe where renewables will attract more than three-quarters of the $1.3 trillion invested in power generation from 2013 to 2030, according to the BNEF report.

Renewables capacity in Europe will climb from 41 percent in 2012 to 60 percent in 2030. Nearly 20 percent of Europe’s power generation will come from onshore wind by 2030 – up from 6 percent in 2013. Europe will also remain the hub of the offshore wind industry, seeing 61 percent of total global build in the sector. By 2030, Europe will have slashed its power sector carbon emissions by half,  to 0.6GtCO2 in 2030.

Big Developments in Africa

 The EY report noted that the 300MW Lake Turkana wind project in Kenya, expected to generate almost 20 percent of the country’s power, has secured $870M from 12 investors based in at least eight countries — making it Africa’s largest wind asset financing deal and the continent’s biggest clean energy project.

And the South African government has awarded additional capacity under Round 3 of its national renewable energy procurement program after allocating 1.5GW to 17 projects in late 2013. The Overseas Private Investment Corporation (OPIC) approved a $250-million loan for the project in June.

EY’s report names Nigeria as the “market to watch” in its report, with a targeted 20 percent growth in renewable energy capacity by 2030. The country is transforming its energy sector with government support for 3GW of solar projects requiring $5B of investment, marking a critical milestone for Nigeria’s renewable energy sector. SkyPower Ltd. and FAS Energy will be major solar investors in Nigeria.

Furthermore, a 10-year reform plan and a $2.5B unbundling of a state-owned power monopoly in 2013 are expected to spark further clean energy developments in Nigeria. These developments have attracted investors including Siemens AG, Korea Electric Power Corp. and Forte Oil Plc.

To read the full Bloomberg New Energy Finance report, click here.

To read the EY report, click here.




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