Clean Technology Set to Accelerate in 2011, Ernst & Young Says - Bloomberg Investments in clean technologies from electric cars to light-emitting diodes are set to accelerate next year after gathering momentum in 2011, the global accounting firm Ernst & Young said.
Venture capital plowed into companies including renewable power generators and makers of batteries and biofuels rose 25 percent in the first three quarters of 2010 from the same period last year, and is set to total $4.9 billion by year-end, the company said today in a report. Share sales in the sector this year have grown 75 percent to $9.1 billion, led by Enel Green Power SpA’s $3.1 billion offering, it said.
Governments such as China, South Korea, Brazil and the U.K. have spurred growth in carbon-cutting technologies, driven by the desire to create jobs, achieve energy security by reducing the need for imported fossil fuels, and ensure competitive advantage in the future, Gil Forer, global cleantech leader at Ernst & Young, said today in a telephone interview.
“Governments have really realized the essence and benefits of cleantech and at the corporate level there’s an acceleration of activity on the investment and acquisition side,” Forer said. “We definitely expect it will continue to accelerate in 2011 and going forward.”
Forer said he hadn’t produced any numeric forecasts for growth of the industry next year.
While investments in clean technologies have increased, company shares have declined. The WilderHill New Energy Index of 87 companies developing low-carbon technologies has slid about 15 percent this year compared with a 13 percent rise in the Standard & Poor’s 500 Index. Forer said that’s not necessarily the best gauge of the sector’s health.
‘Lab to Market’
“The cleantech IPOs behaved no differently than other IPOs this year,” Forer said. “Some were below expected pricing, others were above. Investment bankers have no difficulty in getting interest from investors in cleantech companies.”
Technologies including LEDs, electric vehicles and replacements for oil-based chemicals are now moving “from the lab to the market,” an indication of the growing maturity of cleaner products, Forer said.
While China is now “definitely the leader” in spurring clean technologies, the U.S. “is still a very strong number two,” he said.
Growing global population and demand, the need for secure energy supplies, and the fight against climate change all will continue to spur the industry, Forer said.
“Those drivers haven’t reduced in importance, and the response from government can corporations is accelerating,” Forer said. “You have all the ingredients to say there’s no reason not to be optimistic in 2011.”
