According to the Renewable Energy Investment Tracker report, released by BNEF (BloombergNEF), new investments in renewable energy projects and companies totaled US$ 174 billion in the first half of 2021. This is the highest total ever recorded in the first six months of any year, and 1,8% more than during the same period last year, although it is 7% below the maximum limit set in the second half of 2020, the study found.
Among the main contributors to this growth are capital raised in public markets, which reached US$28,2 billion – up 509% compared to last year – as well as venture and private capital commitments to sustainable companies, which reached US$5,7 billion.
According to the research, the companies China Three Gorges Renewables, which raised US$3,5 billion, the manufacturer LONGi Green Energy Technology, which raised US$2,4 billion, and Plug Power, with US$2 billion, are among the largest share offerings.
For Leandro Martins, president of Ecori, the global demand for renewables has been growing every year and this movement is expected to continue for decades. “The so-called green economy has become a necessity for most of those committed to reducing carbon emissions,” he said.
In the executive's view, giant economies like China must reach the goal of becoming carbon neutral by 2060. “To finance such projects that help countries fulfill their commitments, both private and government funds show an appetite for financing. of the same".
“In Brazil, this movement is not differing with large banking groups, for example, increasing the portfolio of financial products aimed at photovoltaic energy. At the federal level, an increase in supply, such as the harvest plan, facilitates the expansion of the renewable sector with more attractive interest rates than other off-the-shelf financing lines”, highlighted Martins.
Read more: Harvest Plan 2021/2022 will boost solar energy
Investment in solar grows
According to BNEF, investment in solar projects grew 9% year-on-year, with a total of $78,9 billion invested in the first half of 2021. China, for example, raised $4,9 billion in the second quarter, compared with $2,8 billion in the first. The increase was largely driven by large, gigawatt-scale, subsidy-free financing from state-owned companies such as China Energy Investment Corp and Huanghe Hydropower, which are expected to be commissioned this year.
In the United States, investment in large-scale photovoltaic projects increased to US$6,4 billion in the second quarter of 2021, compared to US$5,3 billion in the first, due to the closure of several large-scale plants. “The major contribution comes from the acceleration of the energy transition based on sustainable development. In order to strengthen their goals to combat climate change, several countries have already defined their goals for carbon neutrality. This is already a global consensus,” emphasized Derek Wang, sales manager at Znshine Solar.
“Added to this, the competitiveness of renewable technologies, in comparison to energy produced from fossil fuels, also boosted the sector’s rise. Lately, China launched the world's largest carbon market to reduce greenhouse gas emissions. This initiative will also attract even more investment in renewables, especially solar, as it is a more accessible technology”, he added.
'Funds in circulation'
So-called ‘funds in circulation’, which include renewable energy project refinancing, mergers and acquisitions, totalled $68,3bn in the first six months of 2021, up almost 18% from a year earlier. “As the energy transition accelerates, investors are increasingly looking for ways to increase their portfolio exposure to renewables and related areas such as storage and hydrogen,” said Logan Goldie-Scot, head of clean energy at BNEF.
“This record first half of fundraising for clean sources highlights the strength of the appetite for sustainable investment opportunities aligned with a net-zero future,” he concluded.
Albert Cheung, head of research at BloombergNEF, also weighed in on the issue, noting that renewables investment has weathered the effects of the global pandemic, in contrast to other sectors of the energy economy, which have seen unprecedented volatility. “However, a 1,8% year-on-year increase is nothing to write home about. An immediate acceleration in financing is needed if we are to embark on a path to global net zero,” he concluded.
