Investments in renewable energy hit a record during the first half of 2021

The investors spend in the renewable energy sector has been higher in the first half of 2021 compared to the previous year, supported by record public market financing and record levels of venture capital and private equity commitments. However, the spend is far from enough to sufficiently curb increasing carbon emissions worldwide.

As much as $174 billion was spent on solar, offshore wind, and other green technologies and companies in the period, according to data from Bloomberg (BNEF). While it’s 1.8 per cent more than a year earlier, the level is 7 per cent below the previous six months.

“Renewable energy investment has withstood the effects of the global pandemic, in contrast to other sectors of the energy economy where we have seen unprecedented volatility,” said Albert Cheung, head of analysis at BNEF. “However, a 1.8 per cent year-on-year increase is nothing to write home about. An immediate acceleration in funding is needed if we are to get on track for global net zero.”

New equity raised on public markets hit a record high at $28.2 billion in 1H 2021, as did venture capital and private equity commitments to renewable energy companies at $5.7 billion. These were major contributors to the strong overall first half. At the same time, investment in solar projects was up 9 per cent year-on-year. Wind asset finance, however, fell year-on-year, as it stands in contrast to 1H 2020, which was a bumper period for the financings of major offshore wind farms.

Investment in solar projects was up 9 per cent to a record $78.9 billion in the first half. Solar projects in China garnered $4.9 billion in the second quarter, up from $2.8 billion in the first quarter. Investment in China, the world’s largest wind market, was robust at $21 billion in 1H 2021, showing developers are continuing to build projects without feed-in premiums. EMEA accounted for 36 per cent of wind project investments. Europe had a strong first half, with Finland emerging as the top onshore market. RWE’s Sofia Offshore Wind Farm reached financial close as one of the cheapest projects in the UK, at $2.9 million per megawatt.

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