Bloomberg New Energy Finance (BNEF) analyst Jenny Chase has made the bullish prediction the world could add 151-194 GW of new solar generation capacity in another record year, as her employers published their energy transition investment assessment of 2020.
To help publicize the 2021 Energy Transition Investment Trends report by BNEF, the new-energy branch of the New York-based financial data and media company made a series of predictions for the year ahead.
BNEF head of solar Chase is anticipating another record year for solar after the world added an estimated 132 GW of generation capacity last year on the back of project investments of $149 billion – a rise of 12% on 2019 despite the Covid-19 crisis, just as wind, biomass and waste-to-energy spending all retreated.
Glass
The analyst also predicted a recovery of the supply of glass needed for solar panels would see average module prices fall a further $0.02/W to $0.18/W this year.
Although China spent the most on new generation capacity from all non-large-hydro renewables in 2020 – according to BNEF – the $84 billion invested represented a 12% fall on 2019, enabling Europe to almost close the gap, with $82 billion invested last year, for a thumping rise of 52%. Contributors to that European clean energy advance included the Netherlands, whose $14 billion investment represented a year-on-year rise of 221%; France, which committed 38% more, at $7.3 billion; Spain, which saw investment rise 16% to $10 billion; and Germany, which spent $7.1 billion more, for a rise of 14%.
Transitioning out of the EU club, the U.K. spent $16 billion on renewables capacity last year, for a year on year rise in investment of 177%. More than half of that figure was represented by the $8.3 billion allocated to the Dogger Bank offshore wind facility BNEF described as the biggest ever financing of non-hydro renewable energy capacity. Impressive renewables generation capacity investment was also recorded in Vietnam, up 89% from 2019 to $7.4 billion; Brazil, up 23% to $8.7 billion; and Japan, up 10% to $19 billion. There were notable reductions in spending in India, which fell 36% to $6.2 billion; and in the U.S., which invested 20% less, year on year, into renewables capacity, at $49 billion, as spending on wind projects halved.
Total spend
Bundling in investments into other parts of the energy transition picture, such as energy storage and electric vehicles (EVs), BNEF has calculated the world saw $501 billion committed to zero carbon goals last year, a rise of 9% from the $459 billion witnessed in 2019. And the analyst expects the figure to remain steady this year as the world tries to recover from the Covid-19 pandemic, with the 2021 figure helped along by sustained rises in EV sales as well as that anticipated bumper solar crop.
Sustainable debt finance will also set a new record this year, according to BNEF, with the analyst predicting $900 billion will be offered through green bonds and other sustainable funding pots, such as those linked to social impact. With clean energy stocks having reversed years of underachievement by appearing to offer a safe haven amid global energy turmoils last year, BNEF has warned energy transition-linked share prices are likely to have a bumpier ride this year, as is always the case with a new investment type after the initial lift-off.
Spending on energy storage capacity last year remained stable at $3.6 billion, according to the BNEF report, even as the technology became cheaper. China, South Korea and Japan together accounted for half that figure and the Americas invested a record $1.2 billion in stationary storage but Europe, the Middle East and Africa saw spending fall back to $600 million after a record 2019. The world also installed its largest batteries to date last year. California hosts the 300 MW/1200 MWh Vistra Moss Landing project and the 250 MW LS Power Gateway and China's Qinghai province connected up the 200 MW/200 MWh SPIC Huanghe New Energy Base.
Renewables-powered green hydrogen appears to be losing out to carbon capture and storage (CCS) in the energy transition, according to the update, although BNEF does not include industrial uses of clean hydrogen in its figures.
Investment in fuel-cell bus sales more than halved last year, from $865 million in 2019 to $400 million, but BNEF noted electrolysis investment rose from $168 million in 2019 to $189 million and added: “Hydrogen investment is expected to grow in the coming years, driven by increasing policy support.” That prediction was fleshed out by the statement the 90 MW of hydrogen electrolyzer capacity completed last year is dwarfed by the 240 MW set to fire up this time around.
Green finance
Nevertheless, non-industrial green hydrogen investment fell 20% to $1.5 billion last year as CCS spending rose 212% to twice that figure. BNEF said big investments by companies including Equinor, Shell and Total drove most of the advance and set up what could be “a pivotal year” for CCS if early stage government funding can be transformed into long-term finance. Those big project sponsors also reflected the trend, reported by BNEF, for the oil and gas majors to continue to invest heavily in zero-carbon technology.
EV sales offered further reasons for optimism, though, with BNEF estimating a record $139 billion was spent on passenger vehicles and charging infrastructure last year. That could set up another sector where Europe – with an anticipated 1.9 million EV sales this year, according to the analyst – could gain ground on China, which is expected to shift 1.7 million units. The U.S. market is expected to number 500,000 sales in 2021 although BNEF noted the arrival of the Biden administration could lift that volume.
Electromobility companies raised a record $28 billion on stock markets last year – up from $1.6 billion in 2019 and seven times higher than the previous high-water mark, achieved in 2016. That was part of overall energy transition public fundraising of a record $20 billion in 2020, a rise of 249% on the previous year on the back of those bouyant stocks. Cash calls included $2.8 billion raised by Chinese battery maker Contemporary Amperex Technology, $846 million from investors in U.S. business Plug Power and $777 million from Chinese solar manufacturer JA Solar, added BNEF.
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