Clean Energy Trends 2010
The following is an excerpt from Clean Energy Trends 2010. To read the full report, please download the PDF file by clicking here
2009 will go down as one of the worst years in economic history. Overall venture capital spending fell to its lowest level in more than a decade. Initial public offerings (IPOs) in the U.S. continued at historic lows, with just 13 venture-backed IPOs in 2009 (up only slightly from a meager six venturebacked IPOs in 2008), according to Thomson Reuters and the National Venture Capital Association. Once stalwart financial and market leaders crumbled under new harsh economic realities, with many shuttering their operations or surviving as a mere shell of their former selves. Governments around the world, working to stave off a global depression, announced unprecedented commitments to stimulus programs to keep the global economy on life support.
But signs of hope have begun to emerge for the clean-tech sector. From Beijing to Seoul, and Washington, D.C. to Brussels, clean energy has become a driving force for economic recovery. Approximately $100 billion of the $787 billion stimulus package in the U.S. will go to clean-tech investments and activities; South Korea’s “Green New Deal” is estimated to commit $84 billion to clean-tech investments by 2013; and China, by some estimates, could end up spending $440 billion to $660 billion toward its clean-energy build out over the next ten years. And while total venture activity was down, clean energy’s percent of the total continued to increase, to 12.5 percent of total venture activity in 2009 in the U.S. alone.
Against this backdrop, combined global revenue in 2009 for solar photovoltaics (PV), wind power, and biofuels expanded by 15.8 percent over the prior year, reaching $144.5 billion. All three sectors saw an increase in total deployment, with increased revenue for both biofuels and wind power. Solar, however, saw its first decrease in total revenue over the prior year since Clean Edge began tracking global revenues in 2000. This was a direct result of the rapid decline in solar PV pricing (see “Steep PV Price Drops Redefine the Solar Industry” on page 10).
According to our research:
* Biofuels (global production and wholesale pricing of ethanol and biodiesel) reached $44.9 billion in 2009 and are projected to grow to $112.5 billion by 2019. In 2009 the biofuels market consisted of more than 23.6 billion gallons of ethanol and biodiesel production worldwide.
* Wind power (new installation capital costs) is projected to expand from $63.5 billion in 2009 to $114.5 billion in 2019. Last year’s global wind power installations reached a record 37,500 MW. China, the global leader in new installations for the first time, accounted for more than a third of new installations, or 13,000 MW.
* Solar photovoltaics (including modules, system components, and installation) will grow from a $36.1 billion industry in 2009 to $116.5 billion by 2019. New installations reached just more than 7 GW worldwide in 2009, a sevenfold increase from five years earlier, when the solar PV market reached the gigawatt milestone for the first time. But because of rapidly declining solar PV prices, industry revenue between 2008 and 2009 was down about 6 percent – from a revised $38.5 billion in 2008 – as solar prices dropped from an average $7 peak watt installed in 2008 to $5.12 peak watt installed last year.
Together, we project these three benchmark technologies, which totaled $124.8 billion in 2008 and grew 15.8 percent to $144.5 billion in 2009, to grow to $343.4 billion within a decade.
U.S. Venture and Global Clean-Energy Investments:
In 2009, U.S.-based venture capital investments in energy technologies declined from $3.2 billion in 2008 to $2.2 billion in 2009, according to Bloomberg New Energy Finance. However, as a percent of total VC investments, energy tech grew from 11.4 percent in 2008 to 12.5 percent in 2009. This represented the largest share in the history of the clean-energy asset class.
The global growth rate in clean-energy investments, across a wide range of investment categories, declined as well, impacted by the overall economic climate. However, government investments helped soften the blow and clean-energy investments still remain at near-historic levels. According to New Energy Finance, new global investment in clean energy declined from $155.4 billion in 2008 to $145.3 billion in 2009. This figure includes investments made by VC and private equity investors; public market activity (IPOs, etc.); project financing; asset financing; government research & development; and corporate research, development, & deployment.