Who will be world champion clean energy?

A striking aspect of the crisis in the ‘30s of the previous century was that this period
represented the final breakthrough of new technologies and industries.
The best-knows examples are electricity and the car industry. Will this crisis also be the cradle
of new technologies and industries?
Many politicians and policymakers hope so. They expect that the current crisis will be the
definitive breakthrough of the ‘green’ economy and its corresponding technologies and
industries.
Clean Energy
Clean energy will be an important branch of the green economy. It’s advantages are evident.
It helps the environment, has positive effects on global warming, reduces the West’s
dependence on the politically instable Middle East and – last but not least – it can be a
source of new prosperity and new employment opportunities’
In fact, clean energy is supposed to be the basis of the new economy. For that reason
governments and the private sector are willing to reach deeply into their pockets to fully
utilize this technology’s potential. A race between countries and continents to reap most
benefits of potential commercial products has started. The question is, who has taken the
lead of the marathon and who has the best prospects for the final victory.
The numbers
Investments in clean energy are not limited to a few countries or continents. It is a global
business. This is slightly exaggerated, because 90% of all investments are made within the
G20. In 2009, these investments amounted to a total of $ 162 billion, almost 7% less than in
2008. This might sound disappointing, but over the previous year investments in oil and gas
dropped almost 20%.
2009 and 2008 will probably be a dip in a long series of annual growth. According to
Bloomberg New Energy Finance, investment will grow 25% during the present year. Most of
this growth is due to governments that over the past few years reserved $ 184 billion to
stimulate this sector. The bulk of which will not reach the market until 2010 and 2011. Thus,
the effects of this huge effort will only become visible within a few years.
The private sector, on the other hand, made hardly any investments. In 2007 this sector
invested $23 billion in for example IPOs; in 2009 this amount had almost been halved.
The same holds true for venture capital. In 2009 its availability decreased to $ 6.4 billion, a
decline of 43%.
And the winner is…..
So, 2008 was a bad year for clean energy and the results of the first quarter of 2009 weren’t
promising either. During the other three quarters, the investments skyrocketed to an average
of $ 32 billion.
De auteur is zelfstandig gevestigd analist. Hij schrijft over uiteenlopende onderwerpen die de beleggingswereld
raken. Daarnaast geeft hij lezingen en presentaties. Weblog, http://wijtvliet.blogspot.com
Informatie: WijtvlietResearch@hotmail.com Tel. 0611918878/0416-854416. Cor Wijtvliet is partner bij De
Weygerbergen, bureau voor performancemeting en vermogensbegeleiding. WWW.Weygerbergen.com
© Wijtvliet Research23
The list of countries that are big time investors in clean energy is not lead in 2009 by the
United States, but by China. The latter invested almost $ 35 billion in clean energy in 2009
only. That year, the United States ‘only’ spent $ 18.6 billion, more than 40% less than in the
year of disaster 2008.
If it wasn’t for the American Recovery and Reinvestment Act, the situation in America would
have been worse.
And how is the European Union doing? This continent likes to promote itself as the content
where the ‘green economy’ is beginning to take shape. For once, the EU is living up to
expectation. In 2009 more than $ 40 billion was invested. Leading country is the United
Kingdom, with investments totaling $ 11.2 billion. Second in line is Spain, which invested over
$ 10 billion. Germany is third, investing an amount of $ 4.3 billion. The Netherlands are not
among the top ten investors. As the Netherlands are only a small country, this is not really
surprising. But the Netherlands also aren’t among the countries whose investments in ‘clean
energy’ have most rapidly increased over the last five years!
This list is (surprisingly) lead by Turkey, whose investments have grown 178% over the past
five years. Brazil and China share the second place, growing 48%. Fourth in line is the first
Western country, representing a growth of 127%: the United Kingdom. Until today, the
Netherlands have not been able to live up to its expectations and ambitions.
What separates the winners from the ‘losers’? Policy! Countries such as China, Brazil, Spain
and Germany have clearly set objectives and started investment- and incentives policies.
Brazil, for example, wants to become the main producer and supplier of bio-ethanol.
Where is all the money going?
In spite of the Brazilian efforts, the world saw a considerable decline of investments in biofuel
in 2009. In contrast with wind- and solar power, this fuel is believed to be
environmentally unfriendly. In 2009, more than 50% of the total investments regarded wind
energy, an almost-ready technology whose prices are dropping sharply. Wind energy is
already starting to look like a mature industry
Solar power is expected to thrive the same way, even though the level of investments was
considerably lower than in wind energy. Its prices are dropping and the so-called thin-film
technologies are said to be the final step towards the take-off phase.
Of all investments in ‘clean energy’, 80% is spent on infrastructure, expanding capacity, by,
for instance, building wind turbines. This is mostly done onshore. Here, China is the leader.
Within the EU, the United Kingdom is the number one investor in wind park offshore. Wind
energy is the first clean energy segment that has reached the industrial phase. The green
economy is finally beginning to take shape. For the moment China is in the lead, the USA is
lacking a coherent strategy, while the EU is a strong runner-up. The race is still too close to
call.

Expected IPOs in the US, 2010 and 2011
Codexis Biofuels and Biomaterials, Advanced Enzymes
www.codexis.com
Fallbrook Technologies High-efficiency transmission
www.fallbrooktech.com
Solyndra Solar PV, CIGS
www.solyndra.com
Tesla Motors Electric Vehicles, Automobiles
www.teslamotors.com
Amyris Biotechnologies Synthetic biology for jet fuel,
industrial chemicals and biodiesel
www.amyrisbiotech.com
BrightSource Energy Concentrated Solar Power
www.brightsourceenergy.com
Miasolé Solar PV, CIGS
www.miasole.com
Silver Spring Networks Smart Grid, Networking
www.silverspringnet.com