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March 18, 2008
New Energy Technologies Entice Investors
    by Anne Moore Odell

A report from Clean Edge looks at developments in the clean energy markets and forecasts clean energy sectors will continue their rapid rate of expansion.


Although clean energy is currently only supplying a fraction of the world's energy, investors are rushing to put their money into clean energy, according to the new report "Clean Energy Trends 2008." Produced by Clean Edge, who has been following the clean-energy markets for the past eight years, the report examines clean energy trends for the upcoming year and beyond.

With a 40% increase in clean energy markets from 2006 to 2007, the report puts clean energy and technology squarely into the mainstream. In 2007, G.E. reaped $4.5 billion in revenues from its wind turbines the report offers as one example of mainstream corporate involvement in clean energy.

"G.E. in 2002 purchased Enron Wind for $350 million, for pennies on the dollar," said Ron Pernick, co-founder and principal of Clean Edge, and one of the report's authors. "$4.5 billion may be a rounding unit for G.E. However, it is still significant for G.E. to go from $2 billion in wind turbine revenues in 2005 to $3 billion in 2006 to $4.5 billion in 2007."

The four clean energy sectors-solar photovoltaics, wind, biofuels, and fuel cells-saw an increase in revenue growth from $55 billion in 2006 to $77.3 billion in 2007. Solar, wind, and biofuels each had more than $20 billion is revenues. The Clean Energy Trends 2008 report's authors Joel Makower, Ron Pernick and Clint Wilder project revenues from clean energy technologies will grow to $254.5 billion by 2017.

Pernick told SocialFunds.com, "Solar and wind have sustained a 40% growth since the beginning of the decade. The question is can you sustain 20-30% growth rates? The PC industry had growth rates of 28.5 % for more than two decades. We believe solar and wind can sustain as well."

Although solar energy is still two to three times more expensive than traditional energy, as costs come down solar will increase its market share. In 2007, almost 3,000 mega-watts of solar power were installed worldwide. "We'll see solar energy prices come down more than half in the next decade," said Pernick.

"Why solar is ramping up has very little to do with oil," Pernick said. "Currently, oil has to do with transportation, while solar has to do with electricity. Of course, as hybrid and plug-ins increase this will change. Solar electricity is competing with dirty coal and volatile natural gas. Solar energy is everywhere."

Pernick pointed to Japan and Germany, who are currently the largest producers of solar energy. "If Germany, which gets less sun than the Pacific Northwest, can be a major player in the producing solar energy, solar energy can be produced anywhere," Pernick said.

Investors from every corner of the globe are putting their money in energy technologies. Citing New Energy Finance, a provider of information and research to investors in renewable energy, low-carbon technology, and the carbon markets, investments in energy technologies have grown more than 60% from 2006 to 2007 to $148.4 billion. In the US alone, venture capitalists have invested $2.7 billion in clean energy, almost a tenth of all venture capital investments.

Start-up companies rule the electric car niche the report offers as one of five trends to watch in for in the upcoming years. It points to Delaware Power Systems, Intrago, Phoenix Motorcars, REVA Electric Car, and Venturi as companies to watch as electric cars start to hit the highways.

The second trend noted in the report is sustainable cities. Forward-looking clean-energy cities will be constructed from scratch, like in the case of Masdar City in the United Arab Emirates which is planned as the first no waste, carbon-free city. Sustainable cities can also be existing cities, such as Chicago, London, Seoul, and Tokyo, who have dedicated themselves to cutting greenhouse gases and become more energy efficient.

"Overseas players power US wind market boom" is the third trend noted in the report, as foreign companies look to make their mark on the growing US market. The report projects that by 2009 the US will take over Germany's top spot as the world's largest wind market.

Investors should keep geothermal power on their radars as well the report suggests, as the fourth clean-energy trend. Along with hydroelectric power, geothermal power is the only 24-hour day clean-energy power producer. The fifth trend outlined in the report is that ocean-going cargo ships are moving toward cleaner energy supplies and away from burning bottom-of-the-barrel bunker fuel.

The Clean Energy Trends 2008 report makes it clear that the world is in a state of transition around energy. As more stakeholders, companies, and local, state, and federal governments become involved in addressing future energy needs, clean energy is helping solve problems and create opportunities.

"There is no silver bullet approach," said Pernick. "This is not winner-takes-all. Coal, oil, and natural gas aren't going away."

Pernick concluded, "If you had said ten years ago that the EU was going to have 20% of its energy from renewable sources, people would have laughed. Today their goal is to have 21% renewable energy by 2010. They aren't going to hit the mark, but they will be close, at 19% or 20% of their needs met by clean energies."

 

 
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