Investment In Renewable

Overall Investment Surge:

Global new investment in renewable energy reached $358 billion in the first half of 2023. This represents a substantial 22% increase compared to the same period in the previous year, setting a record for any six-month duration.

Allocation Of Funds:

Out of the total investment, $335 billion was dedicated to project deployment through asset finance and small-scale solar, showing a 14% increase from the first half of 2022. The accelerated pace of the energy transition is evident as renewable energy continues to scale up.

Equity Funding Success:

Renewable energy companies saw success in raising equity, with venture capital and private equity commitments reaching $10.4 billion in 1H 2023—a 25% increase from the previous year. New equity raised on public markets reached $12.7 billion, reflecting a 25% increase.

Regional Contributions:

China maintained its position as the largest market in the first half of 2023, with $177 billion in new investments, a 16% increase from 1H 2022. The United States secured $36 billion, and Germany drew $11.9 billion.

Solar Energy Dominance:

Solar energy emerged as the standout performer, with a total investment of $239 billion in large- and small-scale systems. This comprised two-thirds of the global renewable energy investment during the period, showing a remarkable 43% increase compared to the first half of 2022.

Wind Power Dynamics:

Wind power investment experienced an 8% decline compared to 1H 2022, totalling $94 billion. Onshore wind investment faced challenges, recording a 21% drop to $64.5 billion, while offshore wind investment saw a robust 47% increase, reaching $29.2 billion.

Renewable Energy Deployment Shortfall:

Despite positive trends, the rate of spending on renewable energy deployment falls short of aligning with a net-zero pathway. According to BNEF’s New Energy Outlook, the world needs to invest $8.3 trillion in renewable energy deployment between 2023 and 2030 to meet a global net-zero trajectory by 2050.

The $335 billion spent in the first half of 2023 is insufficient to meet this target, emphasising the need for increased investment to accelerate the transition to net zero.

Importance Of Frontloading Spending:

Frontloading spending on renewable energy, particularly in wind and solar, is crucial to align with carbon budgets that keep global warming well below 2°C and support the decarbonisation of other sectors through greater electrification.

The information provided from Bloomberg Nef’s 2H