World Economic Forum report says cleantech investments are vital

By Luke Geiver | April 12, 2011

The World Economic Forum has issued a report titled, “The Green Investing 2011: Reducing the Cost of Financing,” in conjunction with Bloomberg Clean Energy Finance, and numbers from the report show that clean energy investments are “a vital component to sustained economic growth.” In September 2010, WEC issued a report that recognized a $295 billion potential for the biorefining industry by 2030, but the recent report focuses on investment trends happening today.

“This year’s report finds that, despite the challenging economic environment, the clean energy sector has made significant progress and investments have increased to approximately $250 billion per annum,” the report states. “Given the long-term importance of growing the clean energy sector to both help address climate change and provide alternatives to traditional sources of energy, policy makers will need to find ways to make clean energy available at the lowest cost possible.”

Like the September 2010 report that called on policy makers to support a biobased product market, this report also pointed to the importance of policy as a means to expand investment in the clean energy sector, noting however that “ultimately, there is no one-size-fits-all clean energy policy prescription sure to succeed in every part of the globe.”

Projects based on biomass, geothermal or wind can compete with fossil-based fuels in significant energy markets, the report said. And to do that, there are ways that can help drive down the costs to produce renewable energy. One of those is continued support for R&D, which in 2010 grew to a record level, reaching 24 percent at $35 billion in the U.S., from $28.6 billion in 2009. “The fruits of this growing research pipeline will filter into the market over the coming years,” the report explained.

Good news for public market investments in 2010 as well. After recession-driven lows in 2008 and 2009, the U.S. reached $17.4 billion in 2010, an 18 percent increase over previous years. While that number was still lower than the $24.6 billion seen in 2007, the report added that “the fact that public market investment bounced back…signifies the resilience of the sector.”

And, for cleantech startups, 2010 was a “decent rebound” from 2009, considering that Series A investments rose from 104 to 129. “This,” the report said, “was a hopeful sign that new, fresh-from-the-lab ideas were increasingly able to secure funding.” Also in 2010, the average amount of money invested by venture capitalists into cleantech firms reached $28 million, up $11 million from 2007.


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