Bloomberg New Energy Finance recently presented the latest update of its ClimateScope survey of clean energy markets and developments at Ashden. Data is for 2016 and the tool is now highly interactive, allowing users to generate bespoke views at country, regional and global levels. 13 new countries are covered. There are links to the presentation and the slides below, with the slides providing some of the insights mentioned below.
The headline news from the report is that there was a major fall in investment in the year after the Paris agreement was signed, mainly as a result of China’s spend dropping from $113bn to $82bn, though the country remains by far the largest single investor with nearly ¾ of the global investment of $111bn. Because of the continuing steep decline in renewables costs, however, installed capacity continued to rise despite the absolute decline in investments.
For more climate finance news and comment, subscribe to our free weekly newsletter.
Beyond this kind of raw number, however, ClimateScope is now able to give some interesting insights into climate finance aspects of its data. For example, it found that investment in emerging markets “remains too low and too concentrated”: of 106 countries surveyed, only 27 saw investment of more than $100 million, a number that has barely changed since the first report in 2010. North/South investment levels are also running at way below what was promised in the lead-up to the Paris agreement, with just $12 billion flowing into emerging markets in 2016 from developed markets. Europe led the way, but still with investments of only $4 .6 billion.
One interesting chart shows the mix between private and the development finance in different types of country (see below). The data demonstrates the continuing high reliance of low and low and middle income countries on various kinds of development finance, and the low penetration of private finance in these countries, indicating the critical need for blended finance tools in meeting the NDCs in these economies.
Leverage of private capital by such public funding has, however, actually dropped over the past few years, with $2 of public funding needing to be spent to bring in every $1 of private capital in 2016. This ratio had actually been the reverse in 2012 (1:2), indicating that this key indicator of DFI success in ‘crowding in’ has actually declined over the past several years.
The adoption of renewables policy frameworks also remains very slow. Although 75% of countries had a renewables target in place, just 35% used feed-in tariff mechanisms or supportive utility regulation (24%) to promote their achievement.