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article imageInvestments in global clean energy projects drops 18 percent

By Karen Graham     Jan 14, 2017 in Technology
Global investment in renewables and low-carbon technologies suffered a setback in 2016 as demand in China and Japan faltered, according to new research from Bloomberg New Energy Finance (BNEF).
Worldwide, investments in clean energy fell by 18 percent to $287.5 billion last year, after posting a record high of $348.5 billion in 2015. This was due to steep drops in the price of renewable energy technologies and less spending by China and Japan. But in the long run, this is not doom and gloom news, reports Reuters.
The UK's Independent is blaming the drop in investments on the rise of Donald Trump and the anti-environmental policy movement he fueled while campaigning for the presidency, the UK Independent Party and others. They are calling it the "Trump-Brexit effect."
But there are several reasons that explain the drop in worldwide investments in renewables in 2016, BNEF points out in the report. Of course, the primary drop in investments occurred in China and Japan. China's investment totaled $87.8 billion in 2016, down 26 percent from an all-time high of $119.1 billion in 2015, while Japan's investments totaled $22.6 billion, dropping 43 percent from the previous year.
"After years of record-breaking investment driven by some of the world's most generous feed-in tariffs, China and Japan are cutting back on building new large-scale projects and shifting towards digesting the capacity they have already put in place," said Justin Wu, head of Asia for BNEF. In other words, China and Japan are focusing on grid investment that would allow clean energy to reach its full potential.
The most positive bit of information in the 2016 Investment in Clean Energy Report was the news that the decline in investments globally was in part due to the sharp falls in equipment prices: cost-competitiveness improvements that made it possible to install more megawatts of solar and wind power at a lower price.
Offshore wind power experienced a record year in 2016, with capital investments hitting $117.5 billion, up from $97 billion the previous year. The development of bigger turbines and improving economies all helped to fuel increased investments, especially in China and Europe.
It is also important to realize that the huge investments in clean energy made in 2015 were in the development and installation of projects that took place in 2016. Keep in mind that the cost of raw materials has fallen, even as the technologies have improved.
More about global clean energy, Investments, Brexit, Trump, slowdown in China