A new, broad measure of ‘energy transition investment’, compiled by BloombergNEF (BNEF), shows that the world committed a record $501.3 billion to decarbonization in 2020, beating the previous year by 9% despite the economic disruption caused by the Covid-19 pandemic.
BNEF’s analysis shows that companies, governments and households invested $303.5 billion in new renewable energy capacity in 2020, up 2% on the year, helped by the biggest-ever build-out of solar projects and a $50 billion surge for offshore wind. They also spent $139 billion on electric vehicles and associated charging infrastructure, up 28% and a new record.
Other areas of energy transition investment also showed strength. Domestic installation of energy-efficient heat pumps came to $50.8 billion, up 12%, while investment in stationary energy storage technologies such as batteries was $3.6 billion, level with 2019 despite falling unit prices. Global investment in carbon capture and storage (CCS) tripled to $3 billion, and that in hydrogen was $1.5 billion, down 20% but the second-highest annual number to date.
A geographical split of BNEF’s energy transition investment data shows that Europe accounted for the biggest slice of global investment, at $166.2 billion (up 67%), with China at $134.8 billion (down 12%) and the U.S. at $85.3 billion (down 11%). Europe’s impressive performance was driven by a record year for electric vehicle sales, and the best year in renewable energy investment since 2012.
Global investment in renewable energy capacity moved up 2% to $303.5 billion in 2020. This was the second-highest annual figure ever (after 2017’s $313.3 billion), and the seventh consecutive total of more than $250 billion. Falling capital costs enabled record volumes of both solar (132GW) and wind (73GW) to be installed on the basis of the modest increase in dollar investment.
Highlights of the renewables investment total included a leap of 56% in financings of offshore wind projects to $50 billion, including the largest deal ever in that sub-sector – $8.3 billion for the 2.5GW Dogger Bank project in the U.K. North Sea. The year also saw the largest single solar park ever funded, the 2GW Al Dhafrah in the United Arab Emirates, at a cost of $1.1 billion.
Overall, solar capacity investment was up 12% at $148.6 billion, and wind (onshore and offshore) down 6% at $142.7 billion. Biomass and waste-to-energy financings were down 3% at $10 billion.
In terms of regions, renewable energy capacity investment in Europe, at $81.8 billion, up 52%, was its highest since 2012 and almost caught up with China, at $83.6 billion, down 12%. The U.S. fell 20% to $49.3 billion, as wind investment almost halved, and India slipped 36% to $6.2 billion.
More information at the link: https://about.bnef.com/blog/energy-transition-investment-hit-500-billion-in-2020-for-first-time/