The world of finance continues to believe in renewables. According to BloombergNEF data, in 2018 solar photovoltaic reaches 100 GW of newly installed capacity for the first time.
For five consecutive years one after another, investments in the renewables sector have exceeded 300 billion dollars a year, and 2018 was the first year in which the solar photovoltaic sector surpassed 100 gigawatts of newly installed capacity. A sign that finance continues to believe in renewables. Over the twelve months of 2018, the world invested 332 billion dollars (291 billion euros) in renewable energy, down 8 per cent compared to 2017. The data come from BloombergNEF's latest annual report on global investment in the renewable energy sector.
In the wind sector, investments rose by three percentage points (+3 per cent) compared to 2017, reaching 128 billion dollars; the growth was driven above all by offshore wind, which in 2018 recorded its second-best annual milestone. Investments in smart meters and electric vehicles also grew, while those in solar photovoltaic fell, posting a decline of -24 per cent. Despite this, last year the world invested more capital in photovoltaic (130 billion dollars) than in wind (128 billion dollars). The reason for the collapse in solar investment is due above all to the fall in cost per installed kilowatt-hour, which BloombergNEF estimates at -12 per cent, caused by an overproduction of solar modules that drove down the price of solar panels.
The Chinese government revised its solar incentives downwards in the middle of last year, thereby triggering a sharp fall in photovoltaic investment and negatively affecting the performance of the global solar market. In 2018, solar investments in China reached 40.4 billion euros, a decline of 53 per cent compared to the previous year. A collapse in investments did not, however, correspond to a fall in installations at the global level: these rose from 99 gigawatts in 2017 to 108 in 2018.
Last year, two major plants were finalised: one, NOOR Midelt, is a concentrated solar power and photovoltaic plant located in Morocco with a capacity of 800 MW and an investment of 2.4 billion dollars, while the second plant, NLC Tangedco, is located in India and is a 709-megawatt facility worth 500 million dollars. With this latest installation, India reconfirms its position as the country with the lowest cost per installed MW.
According to the BloombergNEF report, the wind sector invested 25.7 billion dollars in offshore installations, 14 per cent more than the previous year. Among the plants completed in 2018 is Moray Firth East, in the North Sea (950 megawatts, 3,300 million dollars), but the greatest growth was recorded above all in China, with thirteen offshore wind farms and a total investment of approximately 11.4 billion dollars.
In 2018, investments in biomass power plants grew by 18 per cent, reaching 6,300 million dollars, while biofuels recorded explosive growth, posting a +47 per cent with 3,000 million dollars. Geothermal energy also attracted more investors than the previous year: +10 per cent and 1,800 million dollars. Investments in small hydro (1,700 million) fell by 50 per cent, while those in marine energy rose by 16 per cent to 180 million dollars.
In geographical terms, China leads investments with 100 billion dollars, followed in second place by the United States, with 64.2 billion dollars. Here, project developers rushed to finance wind and solar plants in order to take advantage of tax credit incentives before they expire in 2020. There was also a boom, both in the United States and in Europe, in the construction of projects benefiting from long-term bilateral energy purchase agreements, the so-called PPAs (Power Purchase Agreements), signed by major companies such as Facebook and Google.