JERSEY BETTING ON NEW ENERGY

N.J. firms pouring billions into wind, solar ventures
Abby Gruen, July 18, 2010 (Star-Ledger)

"Investors chasing high returns…[in] pioneering firms in New Jersey…are committing their own capital, or that of large investors, to building wind and solar farms and developing other types of renewable power, as well as smart-grid and energy-storage technologies.

"…[T]otal venture capital and private equity investment in clean energy went up 24 percent in the first quarter of 2010…In the past nine years, venture capital investment has grown from $350 million to more than $2 billion…Hudson Clean Energy Partners, a billion-dollar private-equity firm based in Teaneck, exclusively invests in clean energy. Energy Capital Partners, a Short Hills private-equity firm focused on fossil fuel and renewable power, has a $2.25 billion fund with significant clean energy investments. Denham Capital Management, another Short Hills-based private-equity firm, has $4.3 billion under management, with more than 20 percent of its two most recent funds dedicated to clean and renewable energy. Ridgewood Capital, a $2.6 billion energy-focused private-equity firm with offices in Montvale, also has a dedicated renewable-energy subsidiary…"

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"In addition to private-equity funds, billions have been dedicated to growing a global green economy by Jersey-based money managers and energy companies including Prudential Financial and Public Service Enterprise Group in Newark; Lord Abbett in Jersey City; Siemens Financial in Iselin and NRG Energy in Princeton.

"Returns on these investments are still highly uncertain…The Cleantech Index, the first stock index for the market, outperformed the S&P 500 Index by 4 percent in 2007; underperformed it by 39 percent in 2008 and outperformed it by 27 percent in 2009…Despite the appeal of doing good for the environment and society, making money is the first priority for clean-energy financial firms…[It is vital to take] a long view on clean energy investments, particularly because of their dependence on government subsidies."

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"For companies like Siemens Finance, part of a German multinational conglomerate that also manufactures clean-energy equipment, they can participate in the market by providing credit lines for projects using their equipment…Public Service Enterprise Group, the unregulated public energy firm, has $650 million invested in solar, wind and compressed air energy storage and wind projects…PSEG Energy Holdings said it had invested $100 million on solar projects in several states, including its first project, a 2 megawatt solar farm in Hackettstown.

"NRG Energy, a Fortune 500 energy firm that owns power plants nationwide and a utility in Texas, their clean energy portfolio includes four big wind farms in Texas. They also have the largest solar farm in California, and are farthest along on a billion dollar Mid-Atlantic offshore wind project, off the Delaware coast, of any developer…"