World clean energy investment heading for a drop in 2012, after mediocre Q3

Morocco and Brazil are strong features, as third quarter investment slips
5% to $56.6bn

London and New York, 9 October 2012. Global investment in clean energy
totalled $56.6bn in the third quarter of 2012. This was down 5% on the
second quarter and 20% lower than in Q3 2011, explained partly by weaker
figures from the US and India, and a lull in wind farm financings.

Today’s figures, published by research company Bloomberg New Energy
Finance, suggest that the full-year 2012 figure for investment in clean
energy is likely to fall short of last year’s record $280bn . If so, 2012
would be the first down-year for world investment in the sector for at
least eight years.

The challenges facing clean energy in the third quarter continued to
include policy uncertainty in key markets such as the US, the UK and Italy,
and the dampening effect of low sector share prices on public market and
venture capital investment. In addition, the recent sharp falls in the
costs of wind and solar photovoltaic technologies have meant that the same
megawatt capacity can now be purchased for significantly fewer dollars.

Michael Liebreich, chief executive of Bloomberg New Energy Finance, said:
“The fact that 2012 looks like being a down-year is disappointing, but
not surprising – indeed we predicted as much in January. The decline
should not be exaggerated either. The third quarter figure was still well
over $50bn – roughly equivalent to investment in the whole of 2004.”

The third quarter figures, drawing on the world’s most comprehensive
database of transactions in clean energy worldwide, show that asset finance
of utility-scale projects such as wind farms, solar parks and biofuel
plants fell 10% to $32.3bn. There was a bigger reduction compared to the
third quarter of last year, when asset finance reached $49.5bn thanks in
large part to the final throes of the US federal loan guarantee programme.

Liebreich said: “The location of some of biggest projects financed in Q3
this year highlight the geographical shift that is taking place in clean
energy, with established markets such as the US, Europe and China losing
momentum while newer markets in South America, Asia and Africa pick up
steam.”

The top three projects getting the financial go-ahead between July and
September were the Masen Ouarzazate solar thermal plant phase one in
Morocco, at 160MW and $1.2bn; the Nareva and International Power Tarfaya
wind farm, also in Morocco, and at 300MW and $563m; and the Verace wind
portfolio in Brazil, at 258MW and $497m. The fourth largest asset finance
deal was a Chinese wind farm, and the fifth an Australian wind project. The
largest financing of undisclosed value was the Ukrhydroenergo Dnieper River
Small Hydro Portfolio consisting of 22 projects with a cumulative capacity
of 980MW in Ukraine.

Other categories of investment showed mixed fortunes. Small-scale projects,
such as rooftop solar, are estimated to have amounted to $21.3bn in the
third quarter, in line with the previous three months and 11% up on Q3
2011. Germany has remained a strong small-scale solar market this year and,
although Italy has dropped off sharply after the government brought an end
to its generous subsidy offer, activity has been brisk in China, the US,
Japan and the UK.

Investment in quoted clean energy companies on the public markets has
remained very sluggish. It totalled just $1.8bn in the third quarter,
although this was enough to represent an increase of 47% on the second
quarter and 28% on Q3 last year. The peak figure for public markets
investment in clean energy was $13bn way back at the share price peak in
late 2007.

The biggest public market deals of the latest quarter were secondary
issues, not initial public offerings. Solar cell maker Shanghai Aerospace
Automobile Electromechanical Company raised $302.8m, while US electric
vehicle concern Tesla Motors harnessed $225m.

Clean energy share prices bobbed around in Q3, but ended up almost where
they started. The closing figure of 116.69 for the WilderHill New Energy
Global Innovation Index, or NEX, which tracks 98 clean energy stocks
worldwide, left it 8% down for the year as a whole.

Venture capital and private equity investors ploughed just $1.3bn into
clean energy firms in Q3 this year, down 20% on the second quarter and 34%
lower than the third quarter of 2011. Among the few large deals were a
$200m funding round for US installer Solarcity Corporation, and a $104m
round for biofuel developer Elevance Renewable Sciences, also of the US.

A sector split of the Q3 investment total shows solar leading the way with
$33.8bn, up 1% on Q2 but down 22% on the third quarter of last year; wind
is second with $15.5bn, down 26% on the quarter and 23% on the year; small
hydro (projects of 50MW or less) is a distant third with $3.5bn; biomass
and waste is fourth at $2bn, energy-smart technologies fifth at $800m, and
biofuels sixth at just $700m.

A geographical split shows investment in the US in Q3 at $7.3bn, down 28%
on Q2, and 62% on Q3 2011. China saw investment slip 17% on the quarter to
$14.8bn, although this was up 6% on the same three months last year.
India’s investment fell 16% on the quarter to $1.5bn and was 60% down
from the same quarter in 2011, while Brazil showed a 94% increase on the
quarter to $1.9bn, some 24% up on the year. Investment in Europe was
$18.2bn, down 2% on Q2 2012 and 29% on Q3 2011.

A fact pack showing key figures and trends emerging from the Q3 investment
data is accessible at http://bnef.com/Presentations/download/114


For further information:
Angus McCrone
Bloomberg New Energy Finance
+44 (0) 203 216 4795
amccrone1@bloomberg.net



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