The Abrams Clean Tech Report

 

Clean Edge Finds Four Benchmark Sectors Up 40% From Prior Year

Tuesday, March 11th, 2008

I sat in on CleanEdge’s Annual Clean Energy Trends Teleconference this morning, (and I always consider myself quite fortunate to be invited to do so), as Ron Pernick, Joel Makower, and Clint Wilder discussed what is the 7th report issued by CleanEdge.

There’s great progress being made with regard to clean energy. We’re talking pure plays here — electric cars, sustainable cities, solar, wind, and geothermal. The sector continues to grow despite the dollar’s weakness and recession worries.

From Cleanedge’s website:
“Amid a challenging economic outlook—plummeting housing prices, rising foreclosure rates, record-high oil prices, sinking consumer confidence, looming recession—2007 was another banner year for clean energy, with no signs of a slowdown in 2008. Solar, wind, biofuels, geothermal, energy intelligence, hybrid- and all-electric vehicles, advanced batteries, green buildings, and other clean-energy-related technologies and markets provided bright spots in an otherwise sluggish economy.

Clean Edge, which has been tracking the growth of clean-energy markets since 2000, reports a 40 percent increase in revenue growth for solar photovoltaics, wind, biofuels, and fuel cells in 2007, up from $55 billion in 2006 to $77.3 billion in 2007. For the first time, three of these are generating revenue in excess of $20 billion apiece, with wind now exceeding $30 billion. New global investments in energy technologies—including venture capital, project finance, public markets, and research and development—have expanded by 60 percent from $92.6 billion in 2006 to $148.4 billion in 2007, according to research firm New Energy Finance.

Further proof of clean tech’s move from marginalized to mainstream is abundant. A growing number of governments announced plans to generate electricity from renewables. Corporations continued to jump on, if not lead, the race to transition to a cleaner, greener economy. Venture capitalists in the U.S. invested $2.7 billion in the clean-energy sector, representing more than 9 percent of total VC activity. Cleanenergy indices outpaced the broader markets in 2007. For example, the NASDAQ® Clean Edge® U.S. Liquid Series index (co-developed by Clean Edge and NASDAQ) was up 66.67 percent last year, compared with 3.53 percent for the S&P 500 index and 9.81 percent for the NASDAQ Composite index.

According to Clean Edge research:

* Biofuels (global production and wholesale pricing of ethanol and biodiesel) reached $25.4 billion in 2007 and are projected to grow to $81.1 billion by 2017. In 2007 the global biofuels market consisted of more than 13 billion gallons of ethanol and 2 billion gallons of biodiesel production worldwide.

* Wind power (new installation capital costs) is projected to expand from $30.1 billion in 2007 to $83.4 billion in 2017. Last year’s global wind power installations reached a record 20,000 MW, equivalent to 20 large-size 1 GW conventional power plants.

* Solar photovoltaics (including modules, system components, and installation) will grow from a $20.3 billion industry in 2007 to $74 billion by 2017. Annual installations were just shy of 3 GW worldwide, up nearly 500 percent from just four years earlier.

* The fuel cell and distributed hydrogen market will grow from a $1.5 billion industry (primarily for research contracts and demonstration and test units) to $16 billion over the next decade.

Together, we project these four benchmark technologies, which equaled $55.4 billion in 2006 and expanded 40 percent to $77.3 billion in 2007, to grow to $254.5 billion within a decade.

U.S Venture Capital Continues to Grow and Grow

U.S.-based venture capital investments in energy technologies more than quadrupled from $599 million in 2000 to $2.7 billion in 2007, according to New Energy Finance (with supporting data from Clean Edge and Nth Power). As a percent of total VC investments, energy tech increased from .6 percent in 2000 to 9.1 percent in 2007. Between 2006 and 2007, venture investments in the U.S. clean-energy sector increased by more than 70 percent.”

One thing to note: the wind industry is on pins and needles waiting to find out if there will be a congressional extension of what is a very important production credit for wind, which is due to expire at year’s end. Without that extension, the wind industry will certainly suffer, according to Clean Edge’s report. So let’s hope we see that production credit extended…

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