Clean Energy Trends 2009
The following is an excerpt from Clean Energy Trends 2009. To read the full report, please download the PDF file by clicking on the link to the left.
In last year's Clean Energy Trends report, we noted that 2008 would prove to be another banner year for clean energy even in the face of a brooding economic storm. That prognosis proved correct, with revenue growth among our three key clean-energy sectors expanding by 50 percent globally between 2007 and 2008.
Last year's significant revenue increase was based on a number of factors, including the continued double-digit expansion of our tracked markets as well as growing wind farm development costs due primarily to high-demand, low-supply market dynamics that loomed throughout most of 2008. We don't see a repeat performance of such growth happening in 2009.
Clean Edge, which has been tracking the growth of clean-tech markets for nearly a decade, reports that global revenues for solar photovoltaics, wind power, and biofuels expanded from $75.8 billion in 2007 to $115.9 billion in 2008. For the first time, one sector alone, wind, had revenues exceeding $50 billion. New global investments in energy technologies—including venture capital, project finance, public markets, and research and development—expanded by 4.7 percent from $148.4 billion in 2007 to $155.4 billion in 2008, according to research firm New Energy Finance.
Severely tightened credit markets also began to take their toll. In late 2008 and early 2009, the extent of constrained credit became apparent, with a range of clean-energy companies delaying plans, laying off staff, or scuttling projects entirely. While we expect to see continued growth for the sector in the mid- to long-term, we believe 2009 will be a year of refocus, consolidation, or retrenchment for many firms. At the same time, new government spending, regulation, and policies should help the sector weather the current economic crisis better than most other sectors. On balance, we believe clean energy and energy intelligence will be seen as a means to help economies around the world pull out of the current economic malaise.
According to Clean Edge research:
- Biofuels (global production and wholesale pricing of ethanol and biodiesel) reached $34.8 billion in 2008 and are projected to grow to $105.4 billion by 2018. In 2008 the global biofuels market consisted of more than 17 billion gallons of ethanol and 2.5 billion gallons of biodiesel production worldwide. For the first time, ethanol leader Brazil got more than 50 percent of its total national automobile transportation fuels from bioethanol, eclipsing petroleum use for the first time in any major market.
- Wind power (new installation capital costs) is projected to expand from $51.4 billion in 2008 to $139.1 billion in 2018. Last year's global wind power installations reached a record 27,000 MW. In the U.S., which accounted for more than 8,000 MW, wind installations represented more than 40 percent of total new electricity generating capacity brought online in 2008 – and moved the U.S. ahead of Germany as the world's leading generator of wind energy.
- Solar photovoltaics (including modules, system components, and installation) will grow from a $29.6 billion industry in 2008 to $80.6 billion by 2018. Annual installations reached more than 4 GW worldwide in 2008, four times the total set just four years earlier, when the solar PV market reached the 1 GW milestone for the first time in 2004
Together, we project these three benchmark technologies, which equaled $75.8 billion in 2007 and expanded 50 percent to $115.9 billion in 2008, to grow to $325.1 billion within a decade.
Total Investments Reach $155 Billion
The global growth rate in clean-energy investments, across a wide range of investment categories, was much smaller than that exhibited in the U.S. venture sector. According to New Energy Finance, new global investment in clean energy increased 4.7 percent, from $148.4 billion in 2007 to $155.4 billion in 2008. 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. This is a far cry from the previous year's growth rate: Between 2006 and 2007, global clean-energy investments expanded by approximately 60 percent. One reason: Pubic market investments saw a significant decline, falling from $23.4 billion in 2007 to $11.4 billion in 2008, while other investment arenas either remained steady or increased slightly.