Nuclear fears help fuel record renewable energy investment

www.energymatters.com.au
1 Feb 2012

A new generation of renewable energy deals is elevating the global clean energy market to record high levels of investment. Fears in many countries over the safety of nuclear power following the Fukushima disaster is fuelling a rush of merger and acquisition (M&A) transactions in the renewable sector. Details of a report from PricewaterhouseCoopers (PwC) show billion dollar deals are the now the norm, with the value of new renewable energy deals rising 40% year on year, from $38.2 billion in 2010 to a record level of $53.5 billion in 2011.

For the first time, solar, wind and energy efficiency deals overtook hydropower as the major money-makers on the global market. Solar energy deals took a third of the share of M&A transactions in 2011, with the overall value of the solar sector rising 56% on the year, from $10.2billion to $15.8 billion.

According to the report, the fallout from Japan's Fukushima Daiichi nuclear power station crisis has led to many nations rethinking their long-term energy plans and including more renewable capacity in the energy mix. Solar power and efficiency measures alone accounted for a 79% increase in the value of renewable energy deals. The record low cost of photovoltaic materials on world markets and an increased willingness to invest in large-scale wind power would help consolidate these gains, according to PwC partner, Paul Nillesen.

"Staying out of the markets in the hope things will improve cannot be assumed to be the right strategy. The potential for further destabilisation domestically, or at an inter-governmental level cannot be ruled out, but if a deal is highly strategic, and mission critical, then parties will still feel it is worth doing on the right terms". While the report forecasts significant deal growth throughout 2012, it warns that continuing uncertainty in the Eurozone will cause unrest for the sector. It will be a year for the big players on the renewable energy field.