LONDON: The slump in oil prices that’s brought upheaval and cost-cutting to the traditional energy industry spared renewables such as solar and wind, which raked in a record $329.3 billion of investment last year.

The four per cent increase in clean energy technology spending from 2014 reflected tumbling prices for photovoltaics and wind turbines as well as a few big financings for offshore wind farms on the drawing board for years, according to research from Bloomberg New Energy Finance released on Thursday.

“These figures are a stunning riposte to all those who expected clean energy investment to stall on falling oil and gas prices,” said Michael Liebreich, founder of the London-based research arm of Bloomberg LP. “They highlight the improving cost-competitiveness of solar and wind power.”

While oil companies such as Exxon Mobil and Royal Dutch Shell cut jobs and curb capital spending to cope with prices that have fallen two-thirds in 18 months, renewables are enjoying a renaissance underpinned by rules designed to curb fossil-fuel emissions damaging the atmosphere.

Fears that low oil prices will continue into 2016 have knocked confidence among oil companies, delaying $380bn worth of investment in upstream projects, according to analysis by industry consultant Wood Mackenzie Ltd. on Jan. 12.

Companies are “going into survival mode” this year with more projects delayed and budgets cut, said Angus Rodger, one of the report’s authors.

Brent has traded near $30 a barrel this month, down from more than $110 in 2014 as exporters led by Saudi Arabia battled for market share. Coal and natural gas prices have followed, already pushing a handful of producers into bankruptcy.

While BNEF has said lower prices may hurt funding for efficiency projects and the spread of electric cars, the main clean energy technologies enjoyed record installations in 2015.

Balancing that is a potential slip in funding for yieldcos, which drew higher investment in 2015, and a clouded outlook for offshore wind in its biggest market.

Bloomberg-The Washington Post Service

Published in Dawn, January 16th, 2016