Investment trends in early 2011

Given the rush to complete a number of big investment transactions in the closing weeks of 2010 – in some cases to “catch” attractive subsidy deals before they expired – it was little surprise that activity in the first quarter of 2011 was relatively subdued. Financial new investment in renewable energy totaled $31 billion, down from $44 billion in the fourth quarter of 2010 and below the $32 billion figure for the first quarter of 2010.

In asset finance, the biggest reductions in terms of absolute dollars came in U.S. wind power and European solar power. The brightest spots of January–March 2011 were wind power in China, up 25% relative to the same quarter in 2010, and in Brazil, which saw investment double from a year earlier.

Key wind power projects going ahead included the 211 MW IMPSA Ceara wind auction portfolio and the 195 MW Renova Bahia portfolio, both in Brazil, and the 200 MW Hebei Weichang Yudaokou village wind farm in China. In Europe, there were several large offshore wind infrastructure commitments, including the Dan Tysk project off the coast of Germany, the Skagerrak 4 project off Denmark, and the Randstad project off the Netherlands.
In public market investment, transactions included a $1.4 billion share sale by Sinovel Wind and a $220 million offering by solar manufacturer Shandong Jinjing Science & Technology – both in China. In venture capital and private equity investment, the largest transaction of the first quarter of 2011 was a $143 million expansion capital round for U.S. biomass and waste-to-energy specialist Plasma Energy.

March 2011 brought a series of tragic events with potentially far-reaching consequences for energy, including renewable energy. The Japanese earthquake and tsunami, and the ensuing crisis at the reactors at Fukushima Daiichi, cast into doubt the future of nuclear power in Japan and also in other countries such as Germany. Initially, the result was a sharp rise in the share prices of renewable energy companies. But natural gas-fired generation, rather than renewable power, could prove to be the primary, short-term beneficiary of nuclear energy’s problems.
Source:  REN21.2011.Renewables Global Status Report (Paris: REN21 Secretariat)


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