Investments
Although investment in renewables dipped in dollar terms in 2016-2017, they have continued to gain ground against conventional energy sources, particularly for new power plants.
The report finds:
- Renewable energy capacity has grown at record-high levels, even as investment has dipped in dollar terms in 2016. Investment levels are highly responsive to policy changes.
- Offshore wind investment has risen steadily – quadrupling in 2013-2016 – and is poised for further growth.
- Private sources provide the bulk of renewable energy investment globally – over 90% in 2016. Conventional debt and equity are the most prominent financing instruments.
- But public finance can play a key enabling role – covering early-stage project risk and getting new markets to maturity. Public spending on policy implementation far outweighs public investments.
- Project developers account for about two-fifths of private investment in the sector. Institutional investors – pension funds, insurance companies, sovereign wealth funds and others – only make up less than 5% of new investments.
- Private investors overwhelmingly favour domestic renewable energy projects (93% of the private portfolio in 2013-2015), whereas public investment is more balanced between in-country and international financing.
Global investment in renewable energy has experienced unprecedented growth in recent years, and yet it remains below its potential. Scaled up renewable energy investment on the foundation of sound enabling policy framework is critical to rapidly mobilize sustainable energy transition.
Our activities focus on mobilizing various sources of investment (including private capital) in renewable energy projects through the effective use of financial instruments and risk mitigation tools.
Investment needs
If the global energy transformation is to happen, renewable energy investment needs to be scaled up significantly above current levels. Over time, we have developed scenarios to estimate the investment required to progressively increase the shares of renewables in the global energy mix (up to 36% by 2030, and up to 65% by 2050), in line with the objectives of the Paris Agreement.
Sources of investment
Public finance, including climate finance, provides an important resource to bridge the financing gap and attract further investment to renewables. Institutional investors such as pension funds, insurance companies, endowments and sovereign wealth funds have the potential to scale up major investments.
Mobilizing private investment
To address the question of ‘how’ to scale up renewable energy investment rapidly with financing from prospective sources, We have been engaging with governments and the international investor community to identify key risks and barriers and examine the current financing landscape in the renewable energy sector.
Financing renewable energy projects
To overcome some of the barriers and challenges facing project developers and scale up renewable energy investment in developing countries, We aim to facilitate project initiation, development and financing by offering appropriate tools and platforms to key market players including governments, project developers, investors.
Global renewable energy investment trends
Global investment in renewable energy has experienced unprecedented growth in recent years, and yet it remains below its potential. Scaled up renewable energy investment on the foundation of sound enabling policy framework is critical to rapidly mobilize sustainable energy transition.