Five quarter high for clean energy investment, lastest data reveals
- 09 July 2014
LONDON: Clean energy investment is at a five year high, with figures for the second quarter of 2014 showing a fluffy of new investment totaling US$66.2 billion, an 8% increase on Q213.
The data which was released on Monday by Clean Energy Pipeline, an independent analytics company, reveals that the appetite for sustainable energy is heightening as 2014 continues.
“It is perhaps a little early to make predictions, but based on investment levels during the first six months of 2014 last year’s total looks like it will be eclipsed,” remarked Douglas Lloyd, CEO of Clean Energy Pipeline. “This is very positive news given that total clean energy investment posted annual year-on-year declines in both 2012 and 2013.”
One notable development the company reported is that General Electric acquired power company Alstrom’s renewable, thermal and grid operations, in a US$16.9 billion deal. The transaction provoked a surge in clean energy M&A activity, which totaled US$17 billion in Q214; a 24% jump from last year's US$13.7 billion in the same period.
Globally, clean energy projects received a significant boost in quarter two, with final figures for new investment totaling US$40.1 billion – a 12% increase on the corresponding quarter in 2013. Wind energy projects were particularly popular, with new Mexican and Ethiopian farms securing financial support.
This continued interest in sustainable technologies both from an economical and environmental standpoint has resulted in a five quarter high for the financing of specific clean energy initiatives.
In addition, the researchers recognize the role of the public market in the clean energy success story. Since April clean energy businesses have secured US$5.3 billion on the public markets, a notable increase on the US$4.3 billion raised in the comparable quarter from 2013.
Furthermore, when buyouts are left out of the equation, private equity investment and venture capital reached US$1.8 billion during the same period, marking a 13% increase on the previous quarter. This increase was achieved due to significant sums being invested by a small number of firms, with the analysts noting the actual number of investments has declined.
Clean energy investment has been proven to make strong economic sense, with a report from CDP highlighting the average return on investment from carbon reduction projects is 33%, with payback taking just three years.
Ben Ferrari, Director of Partnerships, The Climate Group recently stressed the importance of investing in clean energy companies: “Businesses which are clean energy innovators deserve public and private support. Financial backing facilitates further research and development and enables these pioneering companies to cement their position in the global energy market.”
“The low carbon economy is contingent on clean energy investment; let us hope this trend continues in the years ahead."
By Alana Ryan