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Green energy market jumps 16 per cent in a year

New research indicates that total global investment in clean energy technology in 2014 stood at £205 billion, an increase of £20 billion since 2013, with investors struggling to keep pace.

New research indicates that total global investment in clean energy technology in 2014 stood at £205 billion, an increase of £20 billion since 2013, with investors struggling to keep pace.

The figures, compiled by Bloomberg New Energy Finance (BNEF), demonstrate a bounce back in market confidence, which had seen investment decrease by 16 per cent between 2011 and 2013.

The jump was fuelled by a 25 per cent growth in solar projects and 11 per cent growth in wind energy, which outweighed falling investment levels in biofuels, biomass and waste-to-energy and hydro-electric technologies.

BNEF expects a further 10 per cent growth in solar and wind in 2015.

‘Exceeded expectations’

Michael Liebreich, chair of the advisory board for BNEF, said: “Throughout last year, we were predicting that global investment would bounce back at least 10 per cent in 2014, but these figures have exceeded our expectations. 

Liebreich also pointed out that the research seems to show that investment in low carbon solutions can continue unabated despite the low price of oil.

Resilience against oil

“Healthy investment in clean energy may surprise some commentators, who have been predicting trouble for renewables as a result of the oil price collapse since last summer,” he said.

“The impact of cheaper crude will be felt much more in road transport than in electricity generation.”

Ben Warren, head of environmental finance at Ernst & Young, confirmed that the “trend is set to continue as technology around renewables becomes more affordable.”

UK performance

Despite impressive growth rates in China, Japan, Canada and the US, as well as a host of emerging economies, Europe performed less strongly, increasing by only one per cent against 2013.

Investment in the UK outperformed the wider continent, increasing three per cent to £10 billion, just behind Germany on £10.1 billion.

Investors ‘under-exposed’

Meanwhile, global indexing firm MSCI has argued that many institutional investors are missing out by not moving investments towards clean technology fast enough to capitalise on the sector’s rapid growth. 

Citing the International Energy Agency (IEA)’s claim that renewables will command 25 per cent of the global energy market by 2020, a new MSCI report warns that “without deliberately tilting more aggressively to the companies with large and growing renewable capacity, investors potentially risk being under-exposed to significant growth in future fuel technology.”

Private equity growth

Similarly, investment from private equity firms is also starting to gather pace in an attempt to keep up with developments in the low carbon and environmental goods and services market.

Speaking to BusinessGreen, Mark Keeley, a partner focusing on sustainable energy investments at private equity house, ECI, said that more and more of the sector was now ripe for investment: “Increasingly, clean tech and sustainability has become more mainstream.

“What we’ve seen is that a lot of those early stage investments are getting to a stage now where they would certainly fit our investment criteria.”