NEW ENERGY COULD CONSOLIDATE

Clean energy set for consolidation says E&Y
Nina Chestney (w/Jason Neely), February 16, 2012 (Reuters)

"The clean energy sector is unlikely to sustain its frenzied rate of investment growth and looks set for consolidation led by Asian players [according to an Ernst & Young renewables authority]… …[The global clean energy sector drew a record $260 billion in investment in the face of the financial crisis…Driving growth are countries keen to replace fossil fuel energy with cleaner sources, but the rate of growth faces challenges]…"

[Gil Forer, head of global cleantech, Ernst & Young:] "The (renewables) space has grown dramatically in the last seven to eight years. No industry can continue to grow indefinitely at such rates, there is always a point of correction…You cannot anticipate 40 to 50 percent growth rates year-on-year indefinitely…"

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[Gil Forer, head of global cleantech, Ernst & Young:] "In developed markets you see continuous growth, although its more pressured…On the other hand, many markets in the developing world have seen increases in government commitments such as in South America, Africa and the Middle East…[I] t takes several quarters for industry to synchronize…[and] stabilize…We will see consolidation for sure and big players doing acquisitions, particularly the Chinese, Japanese and South Koreans…"

"Uncertainty about governments' renewables policies and support is having an impact on financing projects in the sector…When investors do not have a stabilized long-term horizon they do not invest…Capital is scarce right now across the board, from venture capital to project finance…[and leaders are] looking at ways to move pension money into the industry because….[for] renewable energy projects…[with] power purchasing agreements, there is not that much risk…Venture capital firms are having difficulties raising cash…[but] there are still lots of opportunities in smart grid technology, electric car technology, solar components and wind turbine niche markets..."