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Sandra Lozo| Programme Officer|International Renewable Energy Agency (IRENA)
November 7th, 2018
Re n e w a b l e E n e r g y I n v e s t m e n t Tr e n d s
AGENDA
1. Technological investment trends
2. Geographic trends
3. Investments by source
4. The road ahead
Renewable power capacity additions
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
180 000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Hydropower Wind Solar PV Bioenergy Other
MW
Annual capacity additions, by technology, 2001-2017 Cumulative renewable
power capacity
2,179 GW
Source: IRENA REsource
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
180 000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Hydropower Wind Solar PV Bioenergy Other Conventional
MW
Rapidly declining cost of renewables Renewable power capacity is increasingly outcompeting new power capacity from non-renewable sources.
Source: IRENA REsource
Annual capacity additions, by technology, 2001-2017
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
180 000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Hydropower Wind Solar PV Bioenergy Other
MW
Source: IRENA REsource
Annual capacity additions, by technology, 2001-2017
Solar PV and wind power represented 88% of the total renewable power addition in 2017.
0
50
100
150
200
250
300
350
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Solar Wind Biomass & waste-to-energy Small hydro Biofuels Geothermal Marine
USD
bill
ion
Source: Frankfurt School-UNEP/BNEF (2018)
47.0
72.7
181.4
112.7
158.9178.3
243.6
287.8
234.4
284.3
323.4
274.0 279.8
255.5
Annual renewable power investments
Annual investments, by technology, 2004-2017
USD
bill
ion
s
125138
167158
Source: IRENA and CPI (2018)
Solar power investments are largely made up of PV generation (88% in 2016) and are driven by developing countries.
Annual solar investments, 2013-2016
Source: IRENA and CPI (2018)
Offshore wind grew four-fold in 2013-2016 and as a share of total wind power (10% to 25%).Wind investments are about evenly divided between developed and developing markets.
Annual wind investments, 2013-2016
0
50
100
150
200
250
300
350
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
United States Brazil AMER (excl. US & Brazil) Europe Middle East & Africa China India Asia-Oceania (excl. China & India)
47.0
287.8
243.6
178.3181.4
158.9
112.7
72.7
234.4
284.3
323.4
274.0 279.8
255.5
Source: Frankfurt School-UNEP/BNEF (2018)
USD
bill
ion
Geographic destination of renewable investments
Annual investments, by region, 2004-2017
New investments in renewable energy, by region, 2004-2017, USD bn
Source: Frankfurt School-UNEP/BNEF (2018)
5.711.9
29.339.2 35.9
23.9
35.4
49.240.6
33.739.1
46.7 43.1 40.5
0
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
United States
0.9 2.7 5.19.8 11.5 7.8 7.4 10.2 8.1 4.3 7.7 6.7 5.6 6
0
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Brazil
1.8 3.3 3.7 4.9 5.9 5.512.4 9.6 10.4 12.5 14.4 11.4
613.4
0
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
AMER (excl. US & Brazil)
24.933.1
46.8
67.4
81.3 82.5
113.9
128.4
88.9
59.467.9
62.9 64.1
40.9
0
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Europe
0.6 0.8 1.2 1.9 2.3 1.7 4.2 3.210.2 9.2 8.3
13.39 10.1
0
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Middle East & Africa
38.7 11
16.625.3
38.1 41.548.2
58.363.4
85.3
121.2
96.9
126.6
0
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
China
2.7 3.2 5.4 5.4 5.7 4.29
13.88 6.8 8.4 9.9 13.7 10.9
0
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
India
7.4 9 10.1 12.8 13.7 14.519.8
25.230.9
45.153.1 51.2
35.731.4
0
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Asia-Oceania (excl. China & India)
Source: BNEF database
USD
bill
ion
Renewable investments in Africa
Annual renewable energy investments in Africa, 2004-2018(3Q)
0,8 1,1
1,91,3
6,7 6,5
2,8
5,2
2,21,7
5,2
0,30,3
1,0
0,4
1,7
0,8
2,3
0,9
4,6
3,1
0
1
2
3
4
5
6
7
8
9
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018**
Sub-Saharan Africa North Africa (Algeria, Egypt, Libya, Morocco, Sudan, Tunisia)
7.5
3.6
6.6
8.4
1.7
2.9
0.4
1.41.1
0.70.40.3
8.3
6.3
3.1
Source: BNEF database
USD
bill
ion
North Africa investments, split by technology (2007-2018 Q3)
0
1
2
3
4
5
6
7
8
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Biofuels Biomass and waste Geothermal Small hydropower Solar PV Solar CSP Wind
0
1
2
3
4
5
6
7
8
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Biofuels Biomass and waste Geothermal Small hydropower Solar PV Solar CSP Wind
USD
bill
ion
Sub-Saharan Africa investments, split by technology (2007-2018 Q3)
Annual renewable energy investments in Africa, 2004-2018(3Q)
USD
bill
ion
0.8 1.1
1.91.3
6.7 6.5
2.8
5.2
2.21.7
5.2
0.30.3
1.0
0.4
1.7
0.8
2.3
0.9
4.6
3.1
0
1
2
3
4
5
6
7
8
9
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018**
Sub-Saharan Africa North Africa (Algeria, Egypt, Libya, Morocco, Sudan, Tunisia)
7.5
3.6
6.6
8.4
1.7
2.9
0.4
1.41.1
0.70.40.3
5.2
8.3
6.3
3.1
2.21.7
2.8
6.5
5.2
0.2
1.3
6.7
1.9
0.81.1
3.1
0.9
4.6
0.1
0.8
2.3
0.4
1.0
1.7
0.20.30.3
Sources of capital for direct investments in renewables
Private
92%
Public
8%
Share of public and private direct investments in renewable energy, 2016
92% Private sources
Source: IRENA and CPI (2018)
8% Public sources
Public sources of capital for investments in renewables
Private
92%
Public
8%
Share of public and private direct investments in renewable energy, 2016
8% Public sources
Public investments in renewable energy by source, average over 2013-2016
85% DFIs
40%
32%
11%
14%
Public financialinstitution - National
Public financialinstitution -Multilateral
Public financialinstitution - Bilateral
Governments
Source: IRENA and CPI (2018) Source: IRENA and CPI (2018)
92% Private sources
Private sources of capital for investment in renewables
Private
92%
Public
8%
Share of public and private direct investments in renewable energy, 2016
8% Public sources
41%
21%
20%
16%Project developers
Commercial FI
Corporate Actor
Households
Institutional investors
PE, VC, infra funds
Corporate end-user
Utilities
Private investments in renewable energy by source, average over 2013-2016
Source: IRENA and CPI (2018) Source: IRENA and CPI (2018)
92% Private sources
New investment in renewable energy by asset type, 2017
Balance sheet; 56%
Project finance;
42%
Source: Frankfurt School-UNEP/BNEF (2018)
Financing instruments & business models deployed
Bond/other, 2%
Balance sheet & Project finance
New investment in renewable energy by asset type, 2017
Balance sheet; 56%
Project finance;
42%
Source: Frankfurt School-UNEP/BNEF (2018)
Financing instruments & business models deployed
Bond/other, 2%
Institutional investors
• Pensions plans, SWFs, insurance co’s
• Own 20% of total capacity of the commissioned offshore wind assets in Europe, from 6% in 2013.
Pay-as-you-go (PAYG) model
• Increasing affordability of small solar
systems in Sub-Saharan Africa
• M-KOPA, BBOXX, Fenix, d.light
Corporate procurement
• Occurs in 75 countries, 465 TWh in 2017
• 3.5% of electricity demand in the Commercial and Industrial sector.
Green Bonds
• USD 155bn issued in 2017
• Official green bond guidelines catalyse new markets.
• Sovereign bonds: Poland, Fiji, Nigeria, Indonesia... [Kenya]
Balance sheet & Project finance
Enabling policies & tools
Risk mitigation instruments
Innovative financial & business models
Standardisation, aggregation & securitisation
Pay-As-You-Go (PAYG), Microfinance
Green bonds, green equity, green indices
Supportive and holistic policies and regulations
Project preparation and development
On-lending and co-lending/syndications
Resource risk mitigation
Guarantees and liquidity facilities (political, offtaker risk)
Currency hedging instruments
Scaling up renewable energy investments
IRENA’s project facilitation tools
FEASIBILITY DEVELOPMENT DOCUMENTATION MATCH-MAKING DEPLOYMENT
Policy analysis and country profiles
Site identification
Project development support
Standardisationof solar PV documentation
Project assessment and match-making
Addition of risk mitigation instruments
Project pre-screening and co-financing
OPEN SOLAR CONTRACTS
INITIATIVE
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