Cleantech investment still down but outlook improving

The independent research company reported a nine per cent dip to $25.9 billion (£16.2 billion) in the third quarter compared to the three previous months and a 22 per cent fall on the same period last year. However, it forecast investment for the full year would be between $105 billion (£65.9 billion) and $115 billion (£72.2 billion), narrowing it from a previous forecast of between $95 billion (£59.6 billion) and $115 billion.

Although a long way off the global investment in cleantech that was seen in the fourth quarter of 2007, when it stood at $40.3 billion (£25.3 billion), and the second quarter and third quarter of 2008 – $35.7 billion (£22.4 billion) and $33.3 billion (£20,9 billion), respectively – New Energy Finance said these latest figures were still way ahead of the dramatic low of $13.3 billion (£8.3 billion) in investment reached in the first quarter of this year.

The firm said investment in the last three months of 2009 was helped by a “strong recovery in public markets” and the first fruits of the ‘green stimulus’ investment promised by major economies.

It said the shortage of debt finance caused by the banking crisis was holding back investment in wind and solar projects, but that there were signs the situation was improving. The first phase of the $897 million (£563 million) Belwind offshore wind part off the coast of Belgium which was financed in the Q3, was an example of an improving situation.

Despite this year’s falls, brought on by the global economic recession, New Energy Finance said it still expected total new investment in clean energy to exceed $300 billion (£188 billion) per year by 2020. But it warned that this was still $200 billion (£125 billion) a year under what was required to limit the rise of global temperatures to degrees centigrade or less.

“It is heartening to see that the collapse in investment see in the first quarter of this year is firmly receding in the rear-view mirror,” commented Michael Liebreich, chairman and chief executive of New Energy Finance. “However, the financing environment remains difficult, with undue reliance on stimulus funds, development banks and state-backed capital providers of various sorts. Most significantly, the levels of investment required to bring global carbon emissions to a peak during the coming decade are as far out of reach as ever – particularly significant given the rapidly-approaching Copenhagen deadline.”