Cement, Energy & Environment

stocks was severe pressure on solar and wind manufacturers driven by overcapacity, falling product prices, competition from Asia, and reduced subsidies in many European countries. Investment volumes were dominated by wind and solar, which each raised more than $4 billion on public markets during 2011. China continued to dominate new share issues at $4.8 billion. The next highest figures were produced by European exchanges ($1.9 billion), followed by Asian exchanges outside China and India ($1.4 billion), and US exchanges ($1.2 billion). Asset Financing: Asset finance of utility-scale renewable energy projects increased 18 per cent from $139 billion to $164 billion in 2011- making up nearly 64 per cent of total new investment in the sector. Solar asset finance jumped 147 per cent to $62.1 billion, while wind asset finance slipped 11 per cent to $82.4 billion in 2011. Biofuels, biomass-to-power and geothermal all saw falls in asset finance in 2011, but there was strong growth for small hydro. China led the world in this sector, seeing 20 per cent growth to $49.7 billion. US came second with $40.9, followed closely by Europe at $40.8. 2011, VC/PE investment in RE companies grew to $1.4 billion worldwide in the first quarter, up from $1.1 billion in Q4, and $1.2 billion in the equivalent quarter of 2011. Solar and biofuels were the two dominant sectors for VC/PE equity raisings. Public markets investment was just $473 million, down 46 per cent from Q4 and 87 per cent from 01 2011 . Public markets investment was just $473 million, down 46 per cent from Q4 and 87 per cent from Q1 2011. Courtesy: Green Energy, May-June & July -Aug 2012 Pp 19-20. WITH LACK OF SUPPORT FROM STATE GOVERNMENTS, INDIAN RENEWABLE ENERGY MARKET IN TROUBLE As national governments makes a final attempt to save the global carbon trading market, it is time for Indian policy makers to review the struggling renewal market in India. According to a recent study by Climate Policy Initiative (CPI) and the Indian School of Business, the lack of clarity over long-term commitments by Mergers and Acquisitions (M&A): The India Story states for buying renewable energy (RE) and the lack of price signals are acting as a dampener for the renewable market. Total spending on mergers and acquisitions in RE rose $3 billion to an all-time high of $68 billion in 2011 . Corporate M&A jumped 34 per cent to a record $28 billion, but asset sales and refinancing slipped 1 per cent from their 2010 peak, to $37 billion. Total M&A volumes reached record levels in wind ($42 billion) and also in solar ($17 billion). M&A activity fell 38 per cent in biofuels to $5 billion. Activity in Europe jumped $9 billion to $35 billion, but fell by a fifth in the US, and almost two- fifths (38%) in China. India witnessed a spectacular rate of increase in clean energy investment in 2011 (62% increase to $12 billion). Asset finance was by far the dominant component, and wind and solar the leading sectors within that. Asset finance in solar saw nearly ten fold growth from $426 million to $4.6 billion-driven largely by the Jawaharlal Nehru National Solar Mission, while that of wind was $5.5 billion, up just 5 per cent from 2010 levels. Biomass and waste-to-power asset finance rose 45% to $857 million last year, while that for small hydro tripled to $510 million. Public markets investment in clean energy companies in India fell steeply from $716 million in 2010 to just $189 million in 2011 , a casualty of the world stock market downturn for shares in the sector. Recent data shows the price of a RE certificate (REC), a tradable instrument, fell to Rs 1,500 last month on the Indian Energy Exchange (lEX) compared with Rs 3,900 (non-solar REC) in March last year. Alarmingly, there were 851,000 certificates on offer last month, of which only 132,000 found buyers. Investments in 2012: Investment in renewable energy was subdued in the first three months of 2012, in the face of financial uncertainty in Europe and the US. While asset finance of utility-scale RE Projects in the first quarter of 2012 was $23.3 billion, down 36 per cent from the fourth quarter of An REC is a tradable instrument, each representing 1 ,000 units of power generated from renewable sources and sold to the grid. Trading in RECs started in March 2011 . "In the one year of trading so far, participation in the REC markets has been low; they have failed to attract investment," said David Nelson, senior director at 19