/24-7PressRelease/ - TOKYO, JAPAN, June 27, 2008 - Fairfield & Hays Global energy report says investment capital flowing into renewable energy climbed from $80 billion in 2005 to a record $100 billion in 2006. As well, the renewable energy sector's growth "although still volatile ... is showing no sign of abating."
The report offers a host of reasons behind and insights into the world's newest gold rush, which saw investors pour $71 billion into companies and new sector opportunities in 2006, a 43% jump from 2005 (and up 158% over the last two years. The trend continues in 2007 with experts predicting investments of $85 billion this year).
In addition to the $71 billion, about $30 billion entered the sector in 2006 via mergers and acquisitions, leveraged buyouts and asset refinancing. This buy-out activity, rewarding the sector's pioneers, implies deeper, more liquid markets and is helping the sector shed its niche image, according to the report.
While renewable sources today produce about 2% of the world's energy, they now account for about 18% of world investment in power generation, with wind generation at the investment forefront. Solar and bio-fuel energy technologies grew even more quickly than wind, but from a smaller base.
Renewables now compete head-on with coal and gas in terms of new installed generating capacity and the portion of world energy produced from renewable sources is sure to rise substantially as the tens of billions of new investment dollars bear fruit.
"One of the new and fundamental messages of this report is that renewable energies are no longer subject to the vagaries of rising and falling oil prices-they are becoming generating systems of choice for increasing numbers of power companies, communities and countries irrespective of the costs of fossil fuels.
"The other key message is that this is no longer an industry solely dominated by developed country industries. Close to 10 per cent of investments are in China with around a fifth in total in the developing world. We will need many sustained steps towards the de-carbonizing of the global economy. It is clear that in respect to renewables those steps are getting underway." Robbie Thompson Research analyst.
"Growing consumer awareness of renewable energy and energy efficiency - and their longer term potential for cheaper energy, and not just greener energy - has become another fundamental driver," it says. "Most importantly governments and politicians are introducing legislation and support mechanisms to enable the sector's development."
About Fairfield & Hays
Fairfield & Hays Advisory Board is a group of colleague venture capital specialists, company pioneers, and experienced executives who advise our management team on technology trends and attractive markets as they relate to making new investments. Well beyond the capabilities of the immediate management team, we draw top entrepreneurial talent and industry expertise from an extended network of over 60 individuals and organizations
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