Walking down the cobblestone pathway that connects the buildings of the Potsdam Institute for Climate Impact Research (PIK), Dr Brigitte Knopf looked up at the white stucco Einstein Tower looming above her. Built in 1920, the observatory was designed to celebrate the mysteries of the universe that Einstein was helping to uncover. Today at PIK, researchers like Knopf are working through an issue that rivals the importance of the work done by Einstein: solving the climate crisis quickly and economically.

The few weeks since our last issue have been something of a rollercoaster ride for all of us. The banking 'bagatelle' had immediate consequences, and the renewables business was not immune. Quickly, contractors were finding that the usual 'working credit' from the banks, which routinely eases them through the cashflow troughs of project development, was no longer there. Some businesses were finding that customers were holding off, waiting to see what the price would look like 'next month'. And thus the wheels started to turn more slowly on existing plans. Spending on new projects seems set to be slower in 2009 in Europe and the USA, though development in China may maintain momentum. And the new involvement by the UAE's Masdar and Qatar in UK renewables could signal a future trend for more renewable energy investment by these and other 'oil-wealthy' nations.
Wind Power

In Las Vegas last month it was an honour to introduce one of the most senior people in US politics - Senate Majority Leader Harry Reid - to the audience gathered at our yearly Renewable Energy World Conference and Expo North America. Senator Reid gave an impassioned address that left no-one in doubt about his vision for renewables in that country, and called for support for the introduction of a nationwide Renewables Portfolio Standard, or RPS.

Late in November 2007 the Dutch-German consortium EcoPower Bonaire BV announced the signing of a contract with the Water and Energy Company of Bonaire to build and operate a sophisticated new sustainable wind-diesel power plant. From the end of 2009 the power plant is to supply the small Caribbean island with 10 MW wind capacity supplemented by 13 MW (bio)diesel power. Eize de Vries talked with Dirk Berkhout, a board member of EcoPower partner Econcern, about the project and its potential as a model for other island or remote regions.

During a busy season of renewables events over the past couple of months, and listening to a good number of industry leaders and CEOs discussing aspects of our industry, I was struck once more by something very special about the renewables business. For yes, while money does make the world go around (and some of the PV bosses said their firms are expecting growth of 70% or more this year) there is something else going on as well.

Floods and droughts have never been far from the news in the last few months. South-east Europe has seen record high temperatures, while much of northern Europe experienced its wettest July on record. Other extreme weather events have occurred in China and elsewhere. While no single weather event can ever be said to have been caused by a changing climate, the overall picture is in line with the predictions made by climate scientists. (Worryingly, one area where predictions and observations do differ is the rate of ice melt, which appears to be much faster in practice than predicted, with the feedback loops proving stronger than anticipated.)

If 2005 was the year that venture capital and private equity investment in clean energy went mainstream, 2006 was the year it won over the remaining sceptics. New investment through venture capital and private equity totalled US$7.1 billion worldwide in 2006, an increase of 163% over 2005 levels. This boom is more than just a short-term trend, as a new report by New Energy Finance and the United Nations Environment Programme reveals. By Angus McCrone.