Offshore wind grids boost clean energy investment in third quarter
London and New York, 13 October – Financial investment in clean energy worldwide rose 12% in the third quarter of 2010 compared to Q2, helped by a burst of financings for offshore wind transmission infrastructure.
The latest authoritative data, published today by analysis company Bloomberg New Energy Finance, show that financial investment in Q3 was $37.9bn, up from $33.9bn in the second quarter of 2010 and $34bn in the third quarter of last year.
The highlight of July-to-September 2010 was a record figure for asset finance, of $32.8bn, helped by $1.9bn of investment in offshore wind transmission in the North Sea. Two big high-voltage cabling projects off the German coast got the financial go-ahead - HelWin 1 and DolWin 1. They are being developed by Transpower, part of the Dutch state-owned TenneT Holding, and are expected to come online in 2013, linking German offshore wind projects to the grid.
Asset finance was also strong in China, with an all-time high of $13.5bn invested, mostly in wind; and Europe saw a rebound in asset financing after a weak Q2. Among the big investment decisions made were those to proceed with two 50MW solar thermal projects in Spain from Ibereolica, and a 217MW extension to ScottishPower’s Whitelee wind farm.
The US remained relatively subdued in terms of asset finance in Q3, with $4.4bn invested, down from $5.1bn in Q2. Low natural gas prices remained a problem, since they bring down the cost of gas-fired electricity and therefore make it hard for wind project developers to negotiate attractive power purchase agreements with US utilities.
Also included in financial investment is new equity finance provided to clean energy companies by public market investors, and by venture capital and private equity funds.
Public market investment rose to $3.7bn in Q3, from $2.6bn in Q2, one of the largest deals being a $350m IPO by China Ming Yang Wind Power in New York. Venture capital and private equity investment slipped 39.6% to $1.4bn in the third quarter.
Q4 may see a higher total for public market investment. Enel Green Power, the renewable energy arm of giant Italian utility Enel, is expected to launch a EUR 3bn IPO in Milan and Madrid later this month.
The third quarter numbers for financial investment do not include clean energy research, development and deployment spending by governments and companies, or small-scale projects such as rooftop solar. These categories are however included in Bloomberg New Energy Finance’s annual data for total new investment in clean energy, and on this measure the company continues to expect 2010 to be a record year. Total investment is likely to be nearer the upper end of our forecast range of $175bn to $200bn, compared to $173bn in 2008 and $162bn in 2009.
Michael Liebreich, chief executive of Bloomberg New Energy Finance, said: “Clean energy investment continues to show hot spots and cold spots in 2010. The latest hot spot is infrastructure spending for North Sea offshore wind. It is reassuring to see billions being committed, although this is only a start – to make the most of this huge resource, countries such as the UK, Germany, Denmark, Netherlands, Belgium and France will have to commit many tens of billions of dollars to offshore wind transmission.
“One of the cold spots is venture capital and private equity investment. Funds have found it difficult to raise new money in the last two years. Many are heavily committed to existing portfolio companies and being cautious about extending equity to new opportunities. This problem could ease if we see more exits as a result of a pick-up in the IPO market, or a big rise in corporate M&A,” Liebreich added.
For further information:
Sarah Feinberg, Bloomberg LP
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