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Clean Tech: One Sector Is Bucking Global Economic Blues


By Keith Johnson
Wall Street Journal
August 5, 2008


The global economy and markets may be tottering, but clean tech is still a
magnet for investment dollars. Private equity and venture capital deals in
clean-energy companies notched a record $5.8 billion in the second
quarter, according to New Energy Finance, a London-based clean-energy consultant.

The big winners? Wind power, solar power, and second-generation biofuels.
The dark cloud? Uncertain equity markets, which pushed back several
planned listings and are making it harder for early-stage investors to cash out.

New Energy Finance says the second-quarter numbers more than doubled the
$2.6 billion invested in the first quarter. Plenty of traditional
clean-energy plays got fresh funding—like solar-panel makers and
wind-turbine manufacturers. But NEF also noted that investors are looking
further along the clean-energy value chain. UK fund Doughty Hanson paid
$724 million for a Danish maker of brakes for wind turbines, hoping to tap
into strong demand for the building blocks of clean energy.

Wind energy in the U.S. is still going strong, despite the lingering
uncertainty over congressional extension of tax credits for clean energy.
The American Wind Energy Association today said second-quarter wind-power
installations fell slightly from the first quarter, to 1,194 megawatts.
But the wind lobby said 2008 should be another record year overall, with
more than 7,500 megawatts installed, provided Congress finally renews the tax credits.

Two other attractive clean-energy sectors, according to New Energy
Finance: utility-size solar power and second-generation biofuels. Power
companies in the U.S. and Europe are increasingly looking to new types of
solar power for big clean-energy installations, rather than do-it-yourself
rooftop arrays. Biofuels have gotten a bad rap, but the next
generation—made from stuff you can’t eat like waste wood and algae—is
drawing multi-million dollar investments.

The downside is that renewable-energy companies are finding it harder to
go public. Though companies raised $5.2 billion in public markets in the
second quarter, a huge jump over the dismal first quarter total of $1
billion, half of that came from one listing, Portugal’s EDP Renovaveis.
Even companies already esconced on the stock market are finding it tough
to live up to sky-high growth expectations for clean energy.
Now, that second-quarter record coincided with oil’s record high. Will
crude’s recent retreat take some shine off clean tech?

 

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