World Economic Forum Says Alternative Energy Investing Growing
Report Also Warns That Investing Must Continue To Increase
In the face of some pretty lean economic times, green energy investing fared quite well in 2009, according to a recent report from the World Economic Forum (WEF).
Bolstered by some encouraging stats showing strong positive trends, the future of funding for green companies is looking good. However, while alternative energy investing appears healthy at the close of 2009, investors must keep up the pace in 2010 and beyond in order to continue making headway against carbon emissions.
H2: Wind, Water, Solar, Biofuels And More Expected To Play A Huge Role
The World Economic Forum’s report, “Green Investing: Towards a Clean Energy Infrastructure,” identified eight alternative energy sectors the authors expect to “significantly contribute in the move to a clean energy infrastructure of the future,” including:
• onshore wind;
• offshore wind;
• solar photovoltaic;
• solar thermal electricity generation;
• municipal solar waste-to-energy;
• sugar-based ethanol;
• cellulosic and next generation biofuels; and
• geothermal power.
And these emerging technologies are drawing a huge share of attention and capital, according to the World Economic Forum. “Clean energy opportunities have the potential to generate significant economic returns. The report shows that even after a tumultuous 2008, an index of the world’s 90 leading clean energy companies had a five-year compounded annualized return of almost 10%, unmatched by the world’s major stock indices.”
Alternative Energy Investing Is Profitable, So How Much Money Is Being Invested?
The flashiest numbers from the World Economic Forum’s report show exactly how fast investment in green companies is growing. These numbers (from a January 2009 World Economic Forum press release) speak for themselves:
• Clean energy investments increased from around $30 billion in 2004 to over $140 billion by 2008. Investments in 2008 exceeded expectations at $155 billion (the report is based on projections for 2008 – which suggests that $142 billion would be invested by year-end).
• Investment in clean energy has not only increased, but has also diversified geographically. Developing countries attracted 23% ($26 billion) of asset financing in 2007, compared to 13% ($1.8 billion) in 2004.
• In addition, four key enablers for a shift to clean energy will be energy efficiency, smart grids, energy storage, and carbon capture and storage.
• Well-developed conditions for innovation, markets for clean energy through public procurement, energy efficiency standards and stable and simple policies are essential to meet the climate change challenge.
H2: Investment In Green Companies and Alternative Energy Investing Needs To Keep Growing
While the numbers are trending favorably, the World Economic Forum Report issued a strong message of cautious optimism. Green investment funding is booming, but the ultimate goal is to reduce carbon emissions and a reliance on foreign sources of energy.
“New Energy Finance, which collaborated with the World Economic Forum on the report, warns that unless at least US$ 515 billion per annum is invested in clean energy between now and 2030, carbon emissions will reach a level deemed unsustainable by scientists, causing temperatures to rise by two degrees globally.”
Find out more about our Green Venture Fund, JPF Venture Fund 1, LP and how we are working to spur the type of alternative energy investing that the World Economic Forum’s report concluded is much needed.
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