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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