Report: Global clean-energy investment falls 53%
Apr 1, 2009 - Sandy Shore - The Associated Press
DENVER - New global investment in renewable-energy projects fell 53 percent in the first quarter, an indication money from government stimulus packages has been slow to reach the industry, a report concluded Thursday.
The steep drop-off shows the global economy's continued deterioration despite a fresh emphasis on curbing pollution and promoting cleaner energy such as wind farms, solar parks and biofuels plants.
Without necessary financing, it has taken longer to finalize deals which could lead to industry consolidation, said Michael Liebreich, chairman and chief executive of New Energy Finance, an industry-research firm.
Other analysts are forecasting similar results for the quarter. "The economy in general, the capital markets overall have had a very difficult time of it," Ernst & Young clean-technology analyst Joseph Muscat said.
For the January-March quarter, new global investment in clean-energy projects totaled $13.3 billion compared with $28.3 billion in the year-ago quarter, according to an analysis by London-based New Energy.
Stock-market investors cut new investments in companies devoted solely to clean energy to about $100 million from $2.1 billion, the consulting firm found. Companies that offer clean energy as a part of their overall business did slightly better.
New venture capital and private-equity investment dropped to $1.8 billion from $2.7 billion in the first quarter of 2008. Merger, acquisition, buy-out and refinancing - which is on top of new money - totaled $8.8 billion down from $18.8 billion in the year-ago quarter.
In the United States, asset financing for new projects was $500 million, compared with a little more than $5 billion in the year-ago quarter.
While renewable energy remains a small fraction of all power used, wind and solar are among the fastest growing in the U.S. In 2008, the U.S. became the world's leading provider of wind power.
"Given the slowness of the first quarter of 2009, it will take a very large acceleration in investment in the remaining three quarters for this year to match 2008 levels," Liebreich said.
The U.S. has pledged billions of dollars to help the renewable-energy industry as part of its overall economic stimulus package. Money is earmarked for such measures as upgrading the nation's electrical-distribution system, tax cuts to promote development of alternatives to oil and energy-efficient improvements for federal buildings and modest-income homes.
Muscat believes a recovery will begin later this year as the stimulus money begins to filter down.
"Over time that will lead to an overall sector improvement but I think as far as I can see it's really going to be a company specific situation," he said.