The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Clean Energy 2010 Outlook: China, Green Banks, and IPOs

In our latest Clean Energy Trends 2010 report, we found reasons for the clean-energy sector to be hopeful. At the same time, we found a number of not-so-insignificant question marks surrounding the future of clean energy. These include the rise of China as a clean-tech leader and what it means for other nations; the current lack of reliable and sustainable financing for technology and project development and the need for new innovative financing models like "green banks;" and the issue of when and if initial public offering (IPO) markets will return so that early-stage investors have a viable "exit" strategy for their portfolio companies.

Before we delve into these issues, let’s look at the latest numbers from our report. In 2009, combined global revenue for the three major clean-energy sectors – solar photovoltaics (PV), wind power, and biofuels – grew by 11.4 percent over 2008, reaching $139.1 billion. These three sectors are expected to reach $325.9 billion by 2019, according to Clean Edge research and analysis. Indeed, following one of the worst years in economic history, signs of hope have begun to emerge for the clean-tech sector, with clean energy becoming a driving force for global economic recovery from Beijing to Seoul, and Washington D.C. to Brussels.

Additional findings include:

  • The global production and wholesale pricing of ethanol and biodiesel reached $44.9 billion in 2009 and is projected to grow to $112.5 billion by 2019. In 2009, the biofuel market consisted of more than 23.6 billion gallons of ethanol and biodiesel production worldwide.
  • Wind power (new installation capital costs) is projected to expand from $63.5 billion in 2009 to $114.5 billion in 2019. Last year’s global wind power installations reached a record 37,500 MW. China, the first-time global leader in new installations, accounted for more than a third of new installations, with 13,000 MW.
  • Solar PV will grow from a $30.7 billion industry in 2009 to $98.9 billion by 2019. New installations reached almost 6 GW worldwide in 2009, a nearly sixfold increase from five years earlier. But because of rapidly declining solar PV prices, industry revenue in 2009 fell about 20 percent, from $38.5 billion in 2008. This is the first recorded decline in solar PV global revenues since we began tracking the sector nearly a decade ago.
  • According to Bloomberg New Energy Finance, U.S.-based venture capital investments in energy technologies declined from $3.2 billion in 2008 to $2.2 billion in 2009. However, clean energy’s percentage of total U.S. venture capital investments continued to rise, accounting for 12.5 percent of total activity in 2009. Globally, investments in clean energy generation assets (private equity, R&D, government, projects, etc.) exceeded that for conventional energy industries for the second year in a row.

But as mentioned above, a host of challenges are present at both the micro and macro levels. Perhaps the most notable is the rise of China as a clean-tech powerhouse. Last month the Pew Charitable Trusts released a new report that echoed the findings in our Clean Energy Trends report: that China is now leading the world in the race to dominate clean energy. The Pew Report finds that in 2009, China took the top spot in spending on clean energy for the first time, pushing the U.S. into second place.  China also now leads the world in manufacturing solar PV and installing new wind turbines. In our report, we make it clear that while China is a formidable opponent, it's too early to declare the country the de facto winner. No one country or region will likely lead in all clean-energy sectors and China still faces significant pollution issues and free flow of information constraints (witness Google’s recent departure from China in March) that could stand in the way of true clean-energy leadership.

Another major issue facing the clean-tech sector during the Great Recession is access to capital – in particular for project development. In the U.S., we believe that at the state and federal level, we need new financing models to bridge this gap. One of the most interesting emerging ideas is the creation of a Green Bank at the federal level, or green banks scattered across the nation at the state level. Other ideas, some of which we highlighted in our recent Five Emerging U.S. Public Finance Models report, are clean-energy victory bonds, revolving loan funds, and investment tax credits and grants. But whatever the combination of public and private investment vehicles, we need to overcome the current dearth of financing options.

One of the other big threats to the expansion and growth of clean tech is the dearth of viable exit strategies for clean-tech companies. The exit strategy of choice for successful startups is an IPO. But as we explain in Clean Energy Trends 2010, IPOs in the U.S. continued at historic lows, with just 13 venture-backed IPOs in 2009 (up only slightly from a meager six venture-backed IPOs in 2008), according to Thomson Reuters and the National Venture Capital Association. And while U.S. clean-energy venture activity continues to expand – clean energy represented 12.5 percent of total U.S. venture activity in 2009, representing the largest share in the history of the clean-energy asset class – the limited number of IPOs remains an obstacle to continued expansion.

Next year, we’ll issue our annual Clean Energy Trends report again in mid March. We’ll get to see how some of the developments and issues we outlined this year panned out, how the market performed year-over-year, and where we see things headed. Stay tuned. These are, by any measure, interesting times we live in.

Ron Pernick is cofounder and managing director of Clean Edge, Inc. and coauthor of The Clean Tech Revolution.

Untitled Document

RELATED ARTICLES

States Already Seek To Delay Clean Power Plan

Andrew Harris, Bloomberg Fifteen states led by coal-rich West Virginia asked a federal court to stall Obama administration rules intended to c...

Stolen Solar Panels and Sabotage A Challenge for Powering India With Renewable Energy

Anindya Upadhyay, Bloomberg Disappointment spread across Tarun Singh’s face when he saw that parts of his solar power microgrid in eastern India’...

Suntech Parent Company Buys Majority Share of US-based Suniva

Ehren Goossens Shunfeng International Clean Energy Ltd., the Hong Kong-based solar company controlled by billionaire Zheng Jianming,...

Sunrise in Pakistan as the Country Delves into Solar PV

Robert Harker Pakistan has joined the list of countries that are exploring solar power as a means to bridge critical energy generat...

PRESS RELEASES

Free ImagineSolar Online Course Demonstration

ImagineSolar will be holding another live demonstration of PV250e: Solar PV Economics a...

Canadian Solar Announces Partnership in 200 MW Tranquility Solar Power Project

Recurrent Energy signed an agreement with Southern Power to partner on the Tranquility ...

AWS Truepower Announces Major Expansion of its Due Diligence Team in Response to Growing Market Demand

AWS Truepower, an international leader in wind and solar energy consulting and engineer...

FEATURED BLOGS

NATiVE Recognized for Excellence at 2015 Greater Austin Business Awards

NATiVE Recognized for Excellence at 2015 Greater Austin Business Awards NEWS RELEASE AUSTIN, Texas – Aug. 27...

Solar Energy Means Jobs, Savings, and a Low-Cost Future [infographic]

There are a lot of utility-sponsored legislative and regulatory attacks on solar energy lately, and we put together t...

How To Get People To Do Stuff

It’s no secret that psychology and sales go hand in hand. If you understand the principles of human psychology ...

FINANCIAL NEWS

Ron Pernick, co-founder and managing director of Clean Edge, Inc. (www.cleanedge.com) and co-author of Clean Tech Nation and The Clean Tech Revolution, is an accomplished market research, publishing, and business development entrepreneur with thre...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @jennrunyon

FEATURED PARTNERS



EVENTS

Doing Business in South Africa – in partnership with GWEC, the Glob...

Wind Energy in South Africa has been expanding dramatically, growing fro...

Intersolar South America 2015

Exhibition and Conference: September 1-3, 2015 Intersolar South America ...

Intersolar Europe 2016

Exhibition: June 22-24, 2016; Conference: June 21-22, 2016 Intersolar Eu...

COMPANY BLOGS

How To Recruit An Internal Ally

When you’re collecting information for a proposal, the person with...

The Proof Is Not Always In The Pudding

One of the best ways to turn a skeptical prospect into a buyer is to giv...

Pushing Beyond The Cushion

Efficiency projects are all too often viewed as “optional” o...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS