China stars as quarterly clean energy investment numbers rebound 24% over Q1

Asset finance of wind farms and solar parks was up strongly and small-scale
PV installations ran at record levels

London and New York, 11 July 2012. The clean energy sector showed
resilience in the face of global economic ills and policy uncertainty in
the second quarter of 2012, with new investment totalling $59.6bn. This was
up 24% on Q1, but still 18% below the near-record quarterly figure of
$72.5bn in Q2 last year.

Today’s figures, published by research company Bloomberg New Energy
Finance, draw on the world’s most comprehensive database of transactions
in clean energy worldwide. They show a clear split between investment in
clean energy technology and equipment providers – which remained
depressed in Q2 in the face of world economic and stock market troubles –
and generating asset investment, which held up well.

It should be noted that this is the first time Bloomberg New Energy Finance
has included estimated quarterly figures for small-scale projects. Previous
published quarterly figures included only venture capital, private equity,
public markets and larger-scale asset investment; figures for small-scale
projects, such as rooftop PV, were provided only annually. The figures for
Q1 2012 and Q2 2011 quoted above have been restated for comparability.

The star performance in the second quarter came from China, which saw a
surge in investment to $18.3bn in the April-to-June period, up 92% from the
previous quarter, with several large solar photovoltaic and wind projects
each securing hundreds of millions of dollars in financing.

Europe and the US enjoyed solid but less spectacular gains in investment in
Q2, of 11% and 18% over Q1, to reach $20bn and $10.2bn respectively.
Overall, solar accounted for $33.6bn of investment in Q2, up 19% on Q1, and
wind $21.6bn, up 47%.

Michael Liebreich, chief executive of Bloomberg New Energy Finance, said:
“China has recently quadrupled its domestic goals for solar
installations. And it has been by far the biggest market for wind turbines
for several years. These figures underline the pivotal role China is
playing in the clean energy sector. Its torrent of supply-side investment
was one of the main reasons why renewable energy costs have been
plummeting; we are now seeing China creating enough demand to start mopping
up some of the resulting over-capacity.”

The continuing challenge for companies hoping to raise equity finance for
expansion was highlighted yet again by a fresh 15% fall in the WilderHill
New Energy Global Innovation Index, or NEX, which tracks 96 clean energy
stocks worldwide. At the end of Q2, the NEX stood at 115.25, 75% below its
record high posted in November 2007, and just 15% ahead of its indexing
start-point in 2003.

Public market investment in clean energy stood at just $1.2bn in Q2. This
was nearly double the rock-bottom first quarter figure, but 75% below that
for the second quarter of 2011. Venture capital and private equity
investment was also subdued, at $1.5bn in Q2 this year, down 28% from Q1
and 39% from the second quarter of 2011.

Asset finance of utility-scale renewable power and fuel projects, however,
rebounded strongly in the April-to-June quarter. It reached $35.9bn, up 50%
on Q1, albeit still 24% below the figure recorded in the second quarter of
2011.

Among the largest projects financed in the second quarter of this year were
the 270MW Lincs offshore wind farm, off the UK coast, for $1.6bn; the 419MW
Flat Ridge Wind Farm phase two in the US, for $800m; and the 250MW Guodian
Shanxi Qinyuan Taiyue Wind Farm phase two in China, for $317m. The largest
Chinese solar project financed was the Shanlu & Shengyu Bayannur Wuyuan PV
plant, at $316m.

Small-scale projects of less than 1MW, such as rooftop photovoltaics, were
estimated to be worth $21.5bn in Q2 this year, 13% more than in the same
quarter last year.

Liebreich said: “Small-scale projects are becoming an increasingly
important part of the world’s energy mix, particularly following the 75%
drop in the cost of PV modules over the past three years. Germany and Italy
remain the largest markets, but small-scale PV is now broadening its
geographic base, with installations in the US, Japan and China all growing
strongly. We see further expansion across the sun-belt as costs continue to
come down.”

The largest venture capital and private equity deals of the quarter saw
Fisker Automotive of the US clinch $148m for its plug-in hybrid vehicle
development, and Sapphire Energy, also of the US, secure $144m for its
algae-based biofuel business. The largest public market deal was a $340m
initial public offering by Chinese solar water heater company Jiangsu
Sunrain Solar Energy.

Among the smaller clean energy sectors, biomass and waste-to-power recorded
investment of $1.4bn in Q2, down 22% from the first quarter; biofuels saw a
12% fall in investment to $750m, and small hydro (projects of less than
50MW) a 30% slip to $1.1bn. Energy-smart technologies, such as smart grid
and advanced transportation, showed an impressive 74% rise to $1.1bn but
this was still down on the equivalent deal flow last year.


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



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