Investment Trends

 

 

 

 

While concerns are increasing over how long global oil supplies will match consumer needs, the pathway is widening for companies offering technological and environmental solutions. With increasing support from a Federal level and individual States increasing their incentives for energy saving products, companies already establishing themselves in this sector are also in a position to expand their product lines and reach into new areas being promoted at a government level.

The venture capital world has had a stormy relationship with energy technology. Over the past twenty years there have been a number of waves of interest in new and renewable energy technologies, usually coinciding with periods of high oil prices, but activity has always died back in the face of low-cost, fossil fuel-based energy. The past four years have seen a remarkable increase in funds flowing into the sector. Will things be any different this time?

 

Sales in this sector reached over $35 billion globally in 2005, an impressive growth from 2004.

Annual Investment in Renewable Energy

 

When one looks at financing and investment in renewable energy, certain key trends emerge:

  • Global investment is growing, but the emerging markets are exerting the real influence
  • Interest is growing as the technology matures and proves its merit, reducing risk
  • Private investors are showing more interest due to government policies and political influences
  • Investment banking firms are showing interest, further legitimizing the technology.
  • The bond market is beginning to invest in renewables.
  • Venture capital favors clean energy.
  • Renewable energy company evaluations have increased substantially.
  • Market growth appears to have stabilized

While many investors are still concentrating on the markets they are familiar with (North America and Europe), Asia is a new and massive target market. As one industry analyst has said: "the emerging markets won't be emerging any more, they'll be core markets". India has already surpassed the United Kingdom in Ernst & Young’s Renewable Energy Country Attractiveness Indices.

EU Renewable Energy Targets

 

The true turning point for renewable resource producers was 2005-2006, when a number of countries adopted aggressive targets and policies for biofuels.

In 2005 there were 60 renewable energy companies being publicly traded. In 2006 that number had increase to 80 with a market capitalization of more than $50 billion.

BioCRUDE Technologies Inc.
www.biocrudetech.com