Finance

Clean Energy Investment Has Record Breaking Third Quarter

By Joseph Baker on October 14, 2011

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Global investment in clean energy jumped 16% to $45.4 billion in the third quarter of 2011 from Q3 2010 according to research released by Bloomberg New Energy Finance (BNEF).
This investment spike was driven by a record breaking $41.8 billion asset financing of utility-scale renewable energy projects. BNEF highlighted that over $6 billion of the asset financing went to three offshore wind developments in the North Sea that are expected to generate 1 GW of clean, renewable energy. In the US, the $1.6 billion financing of the High Plains Ranch II and III PV represents the largest solar financing of the last three months.

Q3 2011 also produced record breaking clean energy merger and acquisition numbers. Led by EDF’s purchase of the remaining shares it did not own of its subsidiary EDF Energies Nouvelles, for $7.9 billion, M&A activity was up 59% over last year's third quarter reaching $25.9 billion.
The company's Q3 2011 clean energy findings did not all reflect a boom. Public market investment in clean energy companies was down 71% from the same period in 2010.
In the wake of the Solyndra bankruptcy the market place is reflecting the unease surrounding government backed clean energy projects. The bankruptcy "hasn’t helped clean energy share prices," noted Michael Liebreich, chief executive of Bloomberg New Energy Finance. He added that, with the steady falls in the prices of clean energy equipment, like solar panels and wind turbines, there is not enough demand to use the over supply which is "crushing" manufacturers share prices.
Liebriech says in the current market, "You would love to be a developer with access to funding, but not a supplier."
In the US solar manufacturers feel that subsidies which support low-cost solar products imported from China are contributing declining share prices. Last week a collective of solar manufacturers announced intentions to file a formal trade complaint against China with the U.S. Department of Commerce and the U.S. International Trade Commission.
With the U.S. Treasury cash grant program dubbed “Section 1603″ expiring at the end of the year US developers may find it more difficult to fund project development. As a provision of the American Recovery and Reinvestment Act 1603 provides a cash grant to renewable energy developers equal to 30% of initial investment in lieu of a tax credit. The loss of 1603 combined with higher scrutiny surrounding Department of Energy loan guarantees finding funding could prove challenging in 2012.
Image Credit: C. G. P. Grey via Flickr.

Tags: Yes, Bloomberg New Energy Finance, China, USD, 1603, Bloomberg New Energy Finance, Chinese Solar Subsidies, Department of Energy, EDF Energies Nouvelle, mergers and acquisitions, Solyndra bankruptcy, U.S. Department of Commerce, U.S. International Trade Commission., US Solar, Department of Energy, energy, Michael Liebreich, U.S. Department of Commerce

Joseph Baker is a freelance writer living in Vancouver BC. His areas of focus include renewable energy, sustainability and climate change.

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