New investment in the worldwide clean energy sector in the second quarter of 2009 has already surpassed that in the first quarter by a third, with several weeks still to go in Q2, according to analysts at New Energy Finance.
However, this is in comparison to a disastrous first quarter, which saw investment down 44% from the fourth quarter of 2008, and down 53% from the peak in the first quarter of 2008.
Overall, new investment is expected to finish 2009 between US$95 billion and $115 billion, a drop of between 26% and 39% on last year’s total of $155 billion, says New Energy Finance.
Total global new investment in clean energy jumped from $35 billion in 2004, to reach last year’s record. However in a report entitled “Green Investment: Towards a Low-Carbon Energy Infrastructure,” published earlier this year by the World Economic Forum, New Energy Finance demonstrated that annual investment in clean energy has to more than treble from $155 billion to $500 billion between 2008 and 2020 to ensure that carbon emissions peak before the end of the next decade. The release of this latest full-year forecast for 2009 shows that the financial crisis and recession have knocked these plans considerably off track.
Moving forward though, the figures indicate that the first quarter of 2009 is likely to prove the low point for clean energy investment in this downturn. Already in the second quarter, investment in clean energy companies via the public markets has rallied sharply, with well over $2 billion of completed secondary issues.
Even more importantly, the biggest single obstacle facing the sector this year — the sudden shortage of debt finance for wind farm, solar parks and other clean energy projects caused by the banking crisis — may also be past its worst. Another key issue is the timing of the arrival of “green stimulus” money from government programmes aimed at alleviating the recession. Since September 2008, major economies announced some $184.9 billion of stimulus funds aimed at clean energy or energy efficiency, the company notes.
“It is disappointing that 2009 looks likely to show such a significant fall in new investment in clean energy. However, the good news is that it does look as though the worst is past,” said Michael Liebreich, chairman and CEO of New Energy Finance.
“It is also worth remembering that our forecast investment figures for 2009 are still above the figures for 2006. There are plenty of other industrial and infrastructure sectors that would be delighted to be at the same level of activity this year as 2006.”