New Investment in Renewables is just $2Bn short of overtaking Investments in Fossil Energy Sources. Read about trends in Renewable Energy Investments in First Issue of Better Energy Market Monitor

1. WHEN
244
BILLION
IS
NOT
ENOUGH…
Be#er
Energy
Monitor
October
2013

2. Propelled
by
reduced
technology
costs,
new
capacity
grows
by
record
numbers
Key
findings
§
Total
investment
in
renewable
power
and
fuels
amounted
to
€244bn,
down
by
12%
from
2011
record
figure
of
€279bn
§
Despite
this
drop,
2012
saw
second-­‐highest
total
investment
in
renewables
§
§
A
notable
shiE
in
momentum
between
developed
and
developing
countries
led
to
a
rise
of
19%
in
renewables
investment
to
$112bn
in
developing
countries,
while
funds
channelled
into
clean
energy
in
developed
countries
dropped
by
29%
to
132bn
AEer
closely
compeHng
with
the
US
in
2011,
China
was
the
dominant
country
for
investment
in
renewable
energy,
with
a
rise
of
22%
to
a
total
of
$67bn,
mostly
due
to
a
jump
in
solar
investment
§
Further
significant
reducHon
in
costs
of
solar
PV
technology
brought
increased
compeHHveness
of
solar
energy
across
all
segments,
parHcularly
in
small-­‐scale
residenHal
sector
§
New
solar
PV
capacity
installed
in
2012
was
a
record
30.5GW,
up
from
the
previous
year’s
28.8GW.
However,
the
total
amount
invested
in
solar
fell
by
11%
to
a
total
of
$140bn
§
New
installed
wind
capacity
reached
a
record
48.4GW
in
2012,
up
from
42.1GW
in
2011
§
Japan
became
an
unexpected
success
story,
as
it
saw
investment
in
renewable
energy,
excluding
R&D,
surge
73%
to
$16bn
§
Small-­‐scale
capacity
(of
less
than
1MW)
was
the
strongest
area,
rising
3%
to
$80bn
in
2012

3. UMlity-­‐scale
and
small
distributed
capacity
dominate
investment
flows
in
2012
Renewable
energy
investment
by
type
of
finance
in
2012,
$bn
400
52.2
300
80
297
244
148.5
200
100
0
2.3
4.8
4.8
Venture
capital
Corporate
R&D
Gov't
R&D
1.4
4.1
Private
equity
Public
markets
Asset
finance
-­‐
new
equity
Small
distributed
capacity
Total
new
M&A/buy-­‐out
Total
investment
transacHons
Source:
Global
Trends
in
Renewable
Energy
Investment,
Bloomberg
New
Energy
Finance,
2013
Maturing
sector
conMnues
to
add
installed
capacity…
…
but
some
concerns
remain
§ Asset
finance
of
uHlity-­‐scale
mature
technologies
(onshore
wind,
solar
PV)
is
the
major
driver
of
capacity
addiHons
§
Reduced
financing
of
early-­‐stage
technologies
via
venture
capital,
corporate
and
government
R&D
in
2012
leads
to
concerns
about
the
ability
of
supply
chain
to
respond
to
future
demand
with
new
improved
technologies
§
Public
markets
(new
share
lisHngs)
experienced
the
largest
drop
in
funding,
falling
by
61%
from
2011
level
to
$4.1bn
in
2012
§ At
the
same
Hme,
financing
of
small
distributed
capacity
has
increased
each
year
from
2004
to
2012,
and
at
$80bn
closely
follows
uHlity-­‐scale
asset
finance
§ Small
distributed
capacity
represents
residenHal
and
commercial
market
segments
where
high
retail
electricity
prices
make
distributed
renewables
cost-­‐compeHHve

4. Renewable
energy
ready
to
overtake
fossil
fuel
investment
by
end
of
this
decade
Investment
in
renewable
energy
generaMng
capacity*
and
fossil
fuel
capacity,
$bn
400
300
262
227
200
100
0
2008
2009
2010
Renewable
energy
2011
2012
Fossil
fuels
Source:
Global
Trends
in
Renewable
Energy
Investment,
Bloomberg
New
Energy
Finance,
2013
§
Narrow
difference
between
investment
in
renewable
energy
generaHng
assets
and
fossil
fuel
capacity
puts
renewables
on
track
to
overtake
fossil
fuels
by
the
end
of
this
decade
§
Due
to
capacity
reHrement
and
growing
replacement
needs
for
fossil
fuels
plants,
only
$147bn
out
of
total
$262bn
is
esHmated
to
be
invested
into
new
fossil
fuel
capacity
in
2012
§
In
contrast,
almost
all
of
$227bn
channelled
into
renewables
is
esHmated
to
be
for
new
build-­‐out
§
When
$33bn
of
large
hydro
is
taken
into
account,
total
investment
in
RE
generaHng
capacity
reaches
$260bn
*
Renewable
energy
generaHng
assets
include
asset
finance
of
and
exclude
biofuels
and
large
hydro

5. Solar
PV
and
onshore
wind
lead
investment
while
investment
in
developing
countries
picks
up
pace
Total
investment
in
2012
by
technology,
$bn
New
solar
PV
capacity
installed
reached
a
record
of
30.5
GW,
up
from
28.8
GW
installed
in
2011
New
wind
capacity
installed
hit
a
record
of
48.4
GW,
up
from
42.1
GW
in
2011
Record
new
installed
capacity
is
due
to
falling
cost
of
renewable
energy
–
in
case
with
uHlity-­‐scale
solar
PV,
nearly
40%
cost
reducHon
between
2011
and
2012
§
Developing
countries
en
route
to
close
the
gap
in
investment
with
developed
countries
§
China
emerged
as
the
dominant
player
with
$67bn
channelled
into
clean
energy,
up
by
22%
from
year
before
§
Sharp
increases
in
investment
in
South
Africa,
Morocco,
Mexico,
Chile
and
Kenya
§
Solar
§
§
5
As
more
mature
technologies,
onshore
wind
and
solar
PV
conHnue
to
outpace
other
technologies
in
terms
of
total
investment
flows
§
Wind
§
Developing
countries
increasingly
akracHve
not
only
for
uHlity-­‐scale
installaHons
but
also
for
small
distributed
capacity
7.8
8.6
80.3
Biofuels
Biomass
and
WtE
Small
hydro
Geothermal
140.4
Marine
Total
investment
by
geography,
$bn
200
186
150
150
132
103
100
50
112
73
48
32
8
17
27
59
43
112
104
64
94
77
0
2004
2005
2006
2007
2008
Developed
countries
2009
2010
2011
Developing
countries
2012

6. Improved
electricity
grid
and
economically
sustainable
support
systems
are
key
to
cost-­‐
compeMMveness
of
clean
energy
Current
status
Key
developments
to
watch
for
Germany
Germany
added
a
record
7.6
GW
solar
PV
capacity
in
2012,
with
cumulaHve
34.5
GW
by
July
2013.
While
a
recent
freeze
of
levy
charged
to
consumers
for
support
of
renewable
energy
may
h a v e
r a k l e d
t h e
s e c t o r ,
G e r m a n y ’ s
comprehensive
framework
for
invesHng
in
renewables
remains
a
definite
advantage.
• ConHnued
grid
expansion
–
three
new
“power
autobahns”
approved
by
the
government
in
Q4
2012
consisHng
of
5,700
km
of
new
and
upgraded
cables;
• implementaHon
of
“Offshore
Grid
Development
Plan”
meant
to
give
a
Hmetable
for
offshore
grid
build-­‐out
for
the
next
10
years
Japan
As
a
relaHvely
new
market
entrant,
Japan
saw
investment
in
renewables
in
2012
soar
by
73%
to
$16bn,
mostly
due
to
a
boom
in
small-­‐scale
solar
PV
following
new
feed-­‐in
tariff
announcement.
• Government
announcement
of
plans
to
build
1GW
of
offshore
wind
off
the
coast
of
Fukushima
by
2020;
• evoluHon
of
the
FIT
regime
which
is
currently
very
akracHve
Poland
Poland
is
an
akracHve
wind
and
solar
market,
despite
a
delay
in
passing
comprehensive
legislaHon
to
support
renewable
energy,
originally
scheduled
for
January
2013.
An
industry
body
esHmates
a
potenHal
to
add
$20bn
to
the
country’s
GDP
through
a
build-­‐out
of
6GW
of
offshore
wind
capacity
.
• ImplementaHon
of
the
feed-­‐in
tariff
in
2014,
which
will
be
distributed
via
an
aucHon
system
• development
of
shale
gas
resource
and
its
impact
on
the
European
gas
and
electricity
prices
UK
The
July
2013
release
of
strike
prices
for
CfD
bodes
well
for
onshore
and
offshore
wind
which
will
receive
higher
CfD
payments
compared
to
current
levels,
albeit
for
15
years
instead
of
current
20
years.
Large-­‐scale
solar
PV
is
akracHng
higher
levels
of
both
private
and
public
funding,
however
concerns
grow
about
public
acceptance
of
large-­‐scale
greenfield
solar
plants.
• Gov’t
shiE
of
offshore
wind
target
of
18GW
by
2020
to
2030
dampens
the
sector
ambiHon
but
pipeline
remains
robust
• development
of
capacity
market
–
UK
will
experience
dramaHc
fall
in
peak
capacity
margin
by
2022,
hence
the
need
to
guarantee
sufficient
margin
may
increase
the
role
of
renewables
as
baseload
capacity

7. More
investment
into
renewable
energy
is
urgently
required
10,000
CumulaMve
installed
capacity
of
renewable
and
convenMonal*
energy
under
2
Degree
Scenario**
to
2050,
GW
8,134
CAGR
renewable
energy
2009-­‐2030:
6%
8,000
7,159
6,255
5,293
6,000
4,292
4,000
2,000
3,235
1,253
1,957
2,453
0
2009
2015
2020
2025
2030
Non-­‐renewables
2035
2040
2045
2050
Renewables
Source:
Tracking
Clean
Energy
Progress,
OECD/IEA
2013
Drivers
of
renewable
energy
investment
§
§
§
§
Further
reducHons
in
installaHon
costs
across
all
technologies
Growing
demand
for
electricity
and
heat
from
developing
and
developed
economies
Carbon
constraints
and
depleHon
of
cheap,
easily
accessible
deposits
lead
to
increasing
fossil
fuel
prices
Fossil
fuel
prices,
rather
than
subsidies,
become
a
defining
factor
for
renewable
energy
prices,
making
renewables
increasingly
compeHHve
with
convenHonal
power
*
ConvenHonal
energy
includes
coal
w/o
CCS,
coal
with
CCS,
natural
gas,
natural
gas
with
CCS,
oil,
nuclear
Renewables
include
biomass
and
waste,
hydro
(inc.
pumped
storage),
solar
PV,
solar
CSP,
wind
onshore,
wind
offshore,
geothermal
and
ocean
power
**
2
Degree
Scenario
foresees
limiHng
the
global
temperature
rise
to
2
degrees
this
century
• CAGR
2009-­‐2030
for
renewables:
6%
• Installed
renewable
energy
capacity
is
expected
to
overtake
convenHonal
capacity
in
2030-­‐31
• Solar
PV
is
projected
to
grow
from
2%
of
total
world
power
generaHng
capacity
in
2012,
to
16%
by
2030
•
Wind
energy
is
forecast
to
expand
from
5%
of
world’s
installed
power
generaHng
capacity
in
2012
to
15%
by
2030

8. Our
views
on
the
future
of
renewable
energy
investment
We
expect
the
imperaMve
to
invest
into
clean
energy
to
become
even
stronger,
boosted
by
improving
cost-­‐compeMMveness
of
renewables
UHliHes
focus
away
from
ownership
and
towards
development
and
operaHon
of
clean
energy
infrastructure,
in
2012
€9.6bn
of
renewable
energy
assets
were
sold
by
major
uHliHes,
with
87%
of
that
amount
divested
by
European
uHliHes
§
This
move
by
uHliHes
away
from
ownership
allows
dedicated
investors
(infrastructure
funds,
insHtuHonal
investors)
to
acquire
ownership
stakes
in
operaHng
projects
in
larger
numbers
§
§
Debt
finance
is
sHll
difficult
to
obtain
as
banks
look
to
match
their
long-­‐term
liabiliHes,
making
debt
from
development
banks
and
green
bonds
ever
more
important
for
asset
finance
§
§
Green
bonds
conHnue
their
ascent
in
the
hierarchy
of
clean
energy
finance
–
in
2012,
renewable
energy
projects
issued
$2bn
in
green
bonds,
while
total
green
bond
issues
neared
$5bn,
up
by
44%
from
2011
§
Emerging
markets
are
going
to
conHnue
to
add
capacity
While
insHtuHonal
investors
dominate
the
uHlity-­‐scale
asset
market,
a
lively
small
distributed
capacity
market
and
mid-­‐sized
assets
<1MW
represent
a
playing
field
for
smaller
retail
investors
“Sustaining
the
uptake
of
renewable
energies
will
be
crucial
to
the
success
of
both
Sustainable
Development
Goals
and
the
need
to
limit
the
global
average
temperature
rise
to
less
than
two
degrees
Celsius
this
century.
Renewable
energy
has
been
thriving
despite
an
unequal
landscape
with
respect
to
fossil
fuels
and
the
$600
to
$800
billion
of
subsidies
they
conHnue
to
akract.
The
costs
of
fossil-­‐fuel
based
generaHon,
ranging
from
impacts
on
human
health
to
damage
to
ecosystems
such
as
forests,
water
demand
and
yes,
climate
change,
are
also
currently
leE
outside
the
ledgers
of
profit
and
loss.
If
renewable
and
clean
energy
systems
are
to
reach
their
full
potenHal
over
the
medium
to
long
term,
these
imbalances
need
to
be
addressed
and
these
externaliHes
recognised.”
Achim
Steiner,
UN
Under-­‐Secretary
General
and
UNEP
ExecuHve
Director
ChrisHana
Figueres,
ExecuHve
Secretary
of
the
UN
Framework
ConvenHon
on
Climate
Change
Udo
Steffens,
President
and
CEO,
Frankfurt
School
of
Finance
and
Management

9. About
Be#er
Energy
" Who
we
are
Beker
Energy
is
a
plaworm
for
funding
renewable
energy
enabling
investors
to
invest
directly
in
renewable
energy
projects
such
as
solar,
wind
and
bioenergy
to
achieve
stable
returns
based
on
the
sale
of
the
energy
produced
Mark
Augustenborg
Ødum,
CEO
mao@be#erenergy.dk
" What
we
do
We
make
renewable
energy
investments
available
to
everyone
by
offering
a
price-­‐
effecHve
structure
where
the
investor
gets
the
full
benefit
of
their
investments
www.bekerenergy.dk
Follow
us
on
linked-­‐in:
Beker
Energy
Invest
A/S
Katya
Peremanova,
OriginaMon
and
Research
kp@be#erenergy.dk