Renewable energy losing investor momentum

Friday 10 May 2013

 
A decade ago, large investors in so-called clean technology had a straightforward goal: finance companies that would help eliminate the world's dependence on oil, natural gas and coal. But as profits from wind, solar, biofuels and other alternatives consistently fell short of expectations — and as the fossil fuel business boomed — things got complicated. Venture capitalists and other investment funds started stretching the definition of clean technology almost beyond recognition in an effort to make money while clinging to their environmental ideals.

Today, clean technology investment funds are not trying to replace the fossil fuel industry; they're trying to help it by financing companies that can make mining and drilling less dirty. The people running these funds acknowledge the apparent hypocrisy, but defend a more liberal definition of clean technology.

Environmentalists have mixed feelings. They welcome technologies that reduce the environmental footprint of oil and gas development. But they worry the newfound abundance of oil and natural gas — and all the money that can be made helping drillers — has distracted clean technology backers from what once seemed to be their main goal: to make oil and gas a thing of the past.

The new energy technologies have proved much harder to master than predicted. Dozens of solar, biofuels and battery companies failed, unable to show enough promise to go public or attract the attention of bigger companies.

Even when clean energy companies have gone public, they haven't fared well. An index of clean energy companies is down 69 percent since it began in 2005. A similar index of traditional energy companies is up 75 percent over the same period.

The value of global clean technology deals fell 29 percent last year to US$7 billion, from a record US$9.9 billion in 2011, according to the Cleantech Group. But the portion of that sum focused on conventional fossil fuels nearly tripled, to a record US$556 million.

Source: Associated Press
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