Surging Global Clean Energy Investments in 2017
Global clean energy investments soared in 2017 — reaching $335.5 billion — to the second highest level in history — despite the falling cost of clean energy. This trend occurred even as President Trump tried to stall international progress with attempts to undo U.S. climate action, an announcement that he intends to pull the U.S. out of the Paris Agreement, and with a U.S. Administration pushing an international pro-fossil fuels agenda. Despite these potential headwinds, the markets and policies of key countries continued to push forward with clean energy. It is almost like the global clean energy market responded by saying: Trump can’t stop this.
According to Bloomberg New Energy Finance (BNEF), the $333.5 billion invested in 2017 is just 7 percent behind the highest amount in 2015 (see figure). And this significant investment occurred as the cost of clean energy — solar projects in particular — continued to drop meaning that this level of investment generated even more clean energy deployment than it would have only a few years ago.
Here are some other notable trends:
China rolls out huge numbers
China continued to break new records in terms of renewable energy deployment. According to BNEF, almost $133 billion was invested in clean energy in China in 2017 — beating its previous record in 2015 of $125 billion. A large part of this was driven by the massive installation of an estimated 53 gigawatts (GW) of solar photovoltaic capacity — up from the 30 GW of capacity installed in 2016. As my colleague put it, based upon a report from the Institute for Energy Economics and Financial Analysis: “China installed more solar power in one year than the total cumulative solar capacity of any other country”. With renewable energy continuing to boom in China and coal consumption remaining flat, the energy future of China looks very different than it did a few years back.
Mexico is starting to join the clean energy revolution
Over the years a wide variety of projections showed the significant renewable energy potential in Mexico — with some of the strongest wind in the world and loads of solar potential. But the government policies weren’t conducive to tapping into this potential. Recently, however, Mexico started to reform its electricity sector policies to better tap into this renewable energy potential. And that is starting to show up as the country witnessed a huge spike in clean energy investment in 2017 — from $1 billion in 2016 to $6.2 billion in 2017.
India keeps chugging along, with more investment in the wings
The BNEF data showed a slight downturn in clean energy investments in India — from $13.7 billion in 2016 to $11 billion in 2017. But this dip masks the fact that India is continuing to plug along on its efforts to deploy 100 GW of solar and 60 GW of wind by 2022. India recently conducted a round of auctions for wind power which resulted in a record low tariffs of INR 2.43 (3.8 US cents)/kWh — about 30 percent lower than the tariffs at the start of the year. A similar price drop occurred in solar as a recent auction came to as low as INR 2.44 (3.8 US cents)/kWh — amongst the lowest in the world. While, overall capacity addition in 2017 has been comparable to 2016, this coming year is expected to stimulate accelerated growth. As if to set the pace for the year to come, India auctioned 4 GW of solar power in the first week of 2018 alone.
US investment continued despite President Trump
Despite President Trump’s efforts to stall all action on climate change and clean energy deployment, the BNEF data shows that U.S. clean energy investments continued. In 2017, U.S. clean energy investments were up slightly compared to the 2016 levels — $56.9 billion in 2017 compared to $56.4 billion in 2016. State-level policies and markets continued to push forward with wind and solar deployment, despite President Trump’s efforts to support more fossil fuel deployment. You can see this dynamic clearly in the western part of the U.S. where wind and solar wind and solar prices hit record-breaking lows.
Banner year for clean energy, with more to come in 2018 and beyond
While it might have seemed like 2017 would be a tough year for clean energy, with a U.S. Administration trying to blow wind against renewable energy deployment, the facts show that despite this headwind 2017 was a great year for clean energy deployment around the world. And 2018 looks to be another powerful year for clean energy deployment — with BNEF projecting similar levels of clean energy investment and solar reaching more than 100 GW of new installed capacity, the International Renewable Energy Agency finding that the costs of renewable energy is falling so fast that electricity from renewable energy will be “consistently cheaper than from most fossil fuels” by 2020, and countries continuing to make progress towards their Paris Agreement climate targets.