Investment in Renewable Energy Surging
Around the world, investment in renewable energy projects is skyrocketing. Last year, a slew of funds and venture capital firms targeting green technology emerged. The trend appears to be continuing in 2008. Executive recruiting firm, A.E. Feldman, says there continues to be a big rush of people and money into this area. Investment professionals who understand the burgeoning industry are hot commodities.
Venture capital investment in renewable energy reached a record level of $3.4 billion last year, according to new research conducted by Greentech Media Inc, reports The Boston Globe. More than $1 billion was funnelled into solar in upwards of 70 venture capital financing rounds last year, says Greentech Media Venture firms also poured more than $750 million into biofuels, such as cellulosic ethanol and biodiesel. ”VC investment in renewable energy in 2007 was up 50% over the previous year with more than 220 funding rounds across the entire spectrum of renewable energy - from solar to batteries to energy efficiency,” Eric Wesoff, senior analyst at Greentech Media, said in a statement.
Looking Ahead
GE Energy Financial Services announced that it has raised its 2010 renewable energy investing target by a staggering 50% to $6 billion. The new goal is a major jump from its previous target of $4 billion. ”Thanks to our strong customer relationships, our expertise, GE’s technical capabilities, high fossil fuel prices and popular support for cleaner power, renewable energy has become our fastest-growing business,” said Alex Urquhart, President and CEO of GE Energy Financial Services. Urquhart adds that, “With our broad capabilities to invest equity and debt within and outside the United States — not only in wind but in solar, biomass, hydro and geothermal power — we have become a major player in a $60 billion annual renewable energy market.”
GE Energy Financial Services has already crossed the $3 billion mark in its renewable energy investing with a $300 million investment in wind projects spanning four states - its single highest-value wind deal. The deal involved the 600-megawatt portfolio of wind farms in Oregon, Minnesota, Illinois and Texas owned by Houston-based Horizon Wind Energy LLC.
Speaking of wind, one of the largest wind energy developers and operators in the country, asset management group, Babcock & Brown, says it acquired seven Midwestern wind energy projects under various stages of development from Gamesa Energy USA and a Gamesa subsidiary, Navitas Energy, according to East Bay Business Times. The seven projects, located across five states in the Midwest, total more than 750 megawatts — enough to power more than 190,000 homes per year. ”We look forward to developing these projects and bringing them on-line in the near future, further adding to the production of clean and renewable wind energy in the Midwest,” said Hunter Armistead, Head of Babcock & Brown’s North American Energy Development Group.
Meanwhile, Google announced it plans invest in renewable energy technologies, particularly in solar, geothermal, and wind power. If successful, the company will be in a position to provide a large amount of electric power while reducing carbon dioxide emissions. “We expect this would be a good business for us as well,” says founder Larry Page, adding the company expects results “in years, not in decades.”
Morgan Stanley also recently announced plans to acquire a minority equity stake in NGEN Partners, a venture-capital firm with a focus on green technologies. The move underscores the growing interest and investment in alternative energy. The finance community has been investing at levels that imply expected disruptive change is now inevitable in the energy sector,” says Eric Usher, Head of the Energy Finance Unit at UNEP’s Paris-based Division of Technology Industry and Economics. It [renewable energy] is now a mainstream commercial interest to investors and bankers alike.”
