The renewable energy sector saw an estimated $21.7 billion worth of transactions completed in the first quarter of 2012, accounting firm Ernst & Young said on its most recent quarterly global renewable energy report.
It was however, a bad time for renewable energy companies seeking to become publicly traded enterprises as Ernst & Young found that this was the poorest quarter on record for the sector since the second quarter of 2009.
China retained its No. 1 rating on Ernst & Young's all renewables index, followed by the United States, Germany, India and Italy. While the countries at the top of the index remained unchanged, all five of the top-ranking countries shed points during the first quarter.
"The growth of China's wind sector continues to be stifled by insufficient access to the grid, while a boom-bust scenario appears to have returned to the U.S. as a result of uncertainty over the expiry of key stimulus programs," said Gil Forer, Ernst & Young's Global Cleantech leader.
In Germany and Italy, tariff cuts and grid challenges likewise reduced short-term attractiveness, while the end of a key tax break incentive in India is likely to dampen wind sector growth through 2012.
The global I.P.O. market for renewables this quarter recorded approximately $14.3 billion raised from 157 issues, down 69 percent from the same period last year.
New asset finance also fell sharply, resulting in only $24.2 billion raised in the quarter, a 30 percent decline from the previous quarter and a 7 percent decline compared with the same period last year.
I.P.O. readiness and timing will be key for businesses looking to list in the coming quarters. Many renewable businesses were said to have indicated intentions of listing but are waiting for conditions and market sentiment to improve. (See related story.)
Meanwhile, Ernst & Young's report included a global survey of 100 $1 billion-plus companies operating within energy-intensive sectors, to identify the key strategic issues they face.
With 38 percent of the respondents expecting energy costs to rise by 15 percent or more in the next five years, plans to improve energy efficiency, the increased use of renewables, and growing energy self-generation are in play for many of those surveyed.
Technologies used by companies to achieve energy efficiency objectives include energy demand management (47 percent), building energy management systems (20 percent), energy-efficiency lighting (18 percent) and building automation (18 percent).
Around 41 percent of respondents have launched initiatives to generate their own renewable energy. However, this is not substantial, with only 11 percent of respondents reporting that clean energy accounts for more than 5 percent of their companies' total energy production.
A large majority, 68 percent, did say they purchase some electricity generated from renewable resources. But only 39 percent said they would be willing to pay a premium for renewables.
Ernst & Young has been running quarterly reviews of the global renewable energy since the beginning of 2003. Called the Country Attractiveness Indices, it monitors 40 countries in the developed and developing regions. – K.R. Jalbuena