OWA Industry watch | A plunge in global offshore wind investment "dragged down" overall spending on renewable energy for the first time

Global investment in renewable energy declined in a half-year for the first time since the coronavirus outbreak in 2020, according to a new report from Bloomberg New Energy Finance. This trend is mainly triggered by a significant decline in offshore wind investment, even as the global share of clean energy in electricity supply has climbed to a record high.

In the first half of this year, global offshore wind investment fell by 56% compared with the same period last year. This downturn resulted in overall wind investment falling 26% from the second half of last year and 11% from the first half of last year to $90.7 billion, the lowest level in three years. BNEF stressed that offshore wind investment fluctuations are often influenced by the government's auction schedule for large projects.

At the same time, onshore wind investment achieved 13% year-on-year growth, showing a different development trend. Although the solar industry has set six consecutive semi-annual investment records, it has failed to compensate for the negative impact of the decline in offshore wind investment on overall renewable energy investment, resulting in global renewable energy investment shrinking by 11% in the first half of this year compared with the second half of last year.

It is worth noting that despite facing a semi-annual decline, the total global investment in renewable energy in the first half of this year remained flat compared with the same period last year, reaching $313 billion, demonstrating the continued vitality of the industry. Meredith Annex, director of Clean energy at BNEF, stressed that while some oil majors have reduced their focus on renewable energy, this has not affected global investment flows, and capital continues to keep pace with project preparation and progress. At the same time, she called for streamlining the development process of wind and solar power worldwide.

During the pandemic, the low interest rate environment prompted oil majors to increase investment in renewable energy. However, with the global energy crisis triggered by the conflict between Russia and Ukraine, these companies have made large profits from oil and gas operations, and have reduced investment in renewable energy. See OWA's report "OWA Industry Watch | facing a downturn? Equinor also withdraws from Vietnam Offshore Wind Market" and today's update. This trend has collided with a difficult period for the offshore wind industry, which has been hit hard by supply chain pressures, soaring inflation and high interest rates, leading to the cancellation of several large projects and the reduction of targets, markets and personnel, including Danish wind giant Orsted.

Despite the challenges facing offshore wind, a separate report from BNEF revealed that the world's existing clean energy assets reached a new high last year, meeting more than 40 percent of global electricity demand. In 2023, hydropower will account for 14.7 percent, wind and solar will reach a record 13.9 percent, and nuclear will account for 9.4 percent. Wind and solar accounted for almost all of the new global electricity capacity installed last year (nearly 91 percent), while the share of fossil fuel installations fell to an all-time low of 6 percent.

Sofia Maia, analyst at BNEF, said: "Compared to a few years ago, we are seeing a significant change in renewable energy. There is no doubt that renewables have become the largest source of new power generation everywhere."

In 2023, the world's 10 largest economies will contribute nearly three-quarters of global renewable power generation, led by China, which accounted for nearly a third of global renewable power generation last year. Europe's share of wind power exceeded 10%, accounting for nearly 13% of its power generation portfolio, making it the first region to reach this milestone. More remarkably, the Asia-Pacific region surpassed fossil fuels in installed clean energy capacity for the first time, "narrowly beating" fossil fuels with 2.31 terawatts of clean energy capacity.