Clean energy generating big results
Investment in green energy continues to grow, with the sector now valued at US$148.4 billion in 2007.
It is being driven by the demand for sustainable, secure sources of energy, New Energy Finance head of research Chris Greenwood said.
“We have seen the world moving away from a centralised distribution of energy to more dispersed distribution,” he told the Responsible Investment Association Australasia Conference in Melbourne.
“You can’t build high carbon power stations today, so there has to be changes to the way we generate energy.” Greenwood said the demand for clean energy is providing growth of between 50 to 60 per cent over a three-year period.
The growth in some sub-sectors of green energy is also delivering exceptional growth, he said.
Solar power is now worth US$28.6 billion and has experienced 199 per cent growth, according to research by New Energy Finance.
Biofuels is worth US$19.2 billion and has recoded 92 per cent growth, while biomass energy is worth $11.5 billion and has grown at 97 per cent.
The growth in green energy is being driven by Europe, which accounts for US$76.2 billion of investments.
This is followed by America with US$42.9 billion and Asia with US$29.3 billion.
“But we are seeing high levels of growth for green energy in both China and India,” he said.
Fund raising for investing in green energy is mostly from asset investments (US$84.5 billion between 2005—07) and public capital raisings (US$23.4 billion).
Most stock exchanges around the world are taking part in green energy initial public offerings, Greenwood said, with the Madrid exchange leading the way for the largest amount raised.
“We have established an index of green energy stocks and the returns seem to follow the NASDAQ,” he said.
“Last year our index delivered returns of 56 per cent, but that was not sustainable and it has fallen in line with other indices,” Greenwood said.
“We will see some consolidation in the sector and there will be winners and losers.
“We will see more investment money being directed to just the winners, so we expect about US$160 billion will flow into green energy investments this year, which is down on last year.”
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