The weak investment figures will make it almost impossible for global investment in renewable energy to reach the £175bn seen in 2012. The figures are especially poor considering investment in 2012 was itself down 11 per cent from 2011. Investment fell in Europe, China and the US with the only growth coming from the Americas outside the US and Brazil, with moderate growth in Canada, Chile and Uruguay. BNEW attributed the weak investment to the boom in US shale gas as well as cuts in subsidies for green energy in EU countries.
Michael Liebreich, chief executive of Bloomberg New Energy Finance, commented:
After the slightly more promising second quarter, we now have a very disappointing third quarter figure for investment. $45.9bn is still a substantial amount of money, greater than that invested in the whole of 2004, but the loss of momentum since 2011 is worrying.
The latest setback reflects policy uncertainty in Europe, the lure of cheap gas in the US, a levelling-off in wind and solar investment in China, and a general weakening of political will in major economies. Governments accept that the world has a major problem with climate change but, for the moment, appear too engrossed in short-term domestic issues to take the decisive action needed.
The figures were particularly poor for the venture capital and private equity side, where investment in the sector was at its weakest since 2005. Investment in small-scale energy capacity such as solar for homes and business buildings provided a ray of optimism, with investment holding at £10.6bn from the previous quarter, but still down from the £12.5bn recorded in the third quarter of 2012. BNEW attributes this entirely to the reduced cost of PV panels.