Australia's renewables ranking falls behind Algeria, Myanmar

Bloomberg New Energy Finance released last week its global clean energy investment figures for the third quarter of this year. A factpack consisting of the trends and a breakdown of clean energy by region, sector and asset class is available here.  

In the three months to September, clean energy investment was up 12 per cent, to $US55bn from the $US48.9bn in the same period of 2013. However, the number was down 16 per cent from Q2 of this year – not much of an aberration there because the third quarter is generally weaker than the second. 

The high point of Q3 2014 was a leap in Chinese solar investment to a new record of $US12.2bn, up from $US7.5bn in Q3 2013 and $US8bn in Q2 2014. The country is set to become the biggest market this year for utility-scale photovoltaic projects, and could install as much as 14GW of capacity, according to a Bloomberg New Energy Finance forecast. Japan too is expected to install as much as 11.9GW this year. Its Q3 spending was $US8.6bn, up 17 per cent from the equivalent period in 2013.  

In contrast, Australia continues to cause grief to its clean energy industry, which is still awaiting the government’s response to the Renewable Energy Target review. The country is on track this year to register its lowest level of asset financing since 2002 as policy uncertainty prevents any private investment in new large-scale assets. 

Only $A193m ($US169.9m) was invested in new large-scale renewable energy projects in Q3 in Australia, bringing year-to-date investment to $A238m. So far, just seven projects have been financed since the start of the year, with none of them being backed by non-government lenders or investors. 

Large-scale asset finance Down Under in Q3 this year was down 78 per cent on the $A861m invested in the same quarter in 2013. Trailing 12-month large-scale asset finance was also down 70 per cent compared to the period between Q4 2012 and Q3 2013. 

According to a Bloomberg New Energy Finance note entitled Investment freeze in Australia continues and published on October 3, Australia has slid from being the 11th largest investor in large-scale clean energy projects in 2013 to 31st in 2014 so far, lagging behind some surprising new names in the list such as Algeria (26th) and Myanmar (19th). 

In other clean energy news, Canadian utility SaskPower commissioned its 110MW coal-fired unit with carbon capture and storage, the largest operational project on a power plant in the world. The plant will burn coal but cut carbon emissions by 90 per cent by trapping it before it enters the atmosphere and pumping it underground. 

The economics of this $US1.2bn Boundary Dam power plant, like any other CCS project, are entirely dependent on regional conditions: how much subsidy is available from the government or rate-payers, and whether there is a local buyer for the captured CO2. 

However, according to Bloomberg New Energy Finance, even the existence of a few successful projects is unlikely to lead to a resurgence of interest in CCS. For a detailed analysis of this project, and its significance for the nascent CCS industry, see the Analyst Reaction published on 6 October, and entitled “Operational CCS: blueprint or one-hit wonder?"

Graph of the week: Development banks invested $US85bn in clean energy last year, marking a 10% decline on the 2012 level

Originally published by Bloomberg New Energy Finance. Reproduced with permission.