October 3, 2007 : (New Energy Finance) – Anyone who still doubted the powerful momentum behind world investment in clean energy will have found the last few days a struggle. The news has been full of money pouring into specialist funds, and of companies and governments proposing grand-scale renewable energy projects.
Among the big projects being mooted are utility-scale solar thermal generation plants in Florida and California, planned by FPL Group, and five ethanol refineries in Goias and Mato Grosso states from Brazilian oil giant Petrobras. Lew Hay III, president of FPL, announced at the Clinton Global Initiative in New York that his firm would splash out USD 1.5bn on solar thermal electrical generation (STEG) projects, including a 300MW installation in Florida in partnership with Ausra.
The Petrobras plants are the first step in a strategy that will establish the state-run oil company in a powerful position in ethanol, with shareholdings in some 20 distilleries by 2012.
In France, Sechilienne-Sidec announced that it wanted to invest USD 918m in solar projects, including what it believes will be the country’s biggest PV installation.
As if those plans were not grandiose enough for one week, they were dwarfed by the UK government’s decision to launch an “immediate” study into the feasibility of building a tidal barrage across the Severn Estuary, to generate up to 8.6GW of capacity.
The scheme is opposed by many environmentalists, mainly because of the threat to bird life, but could in theory produce some 5% of the UK’s total electricity requirement. If it gets the eventual go-ahead, it would probably become the world’s largest single renewable energy project.
Business secretary John Hutton said: “The government will drive forward with delivering a step change in our use of renewable energy and will now start work on the feasibility of a Severn Barrage.”
Even if the barrage gets approval from the government, it would likely spend several years in a planning enquiry process. Raising the finance – perhaps as much as USD 30bn – would be a huge challenge if it reached that stage.
While big ideas are circulating about the development of fresh renewable energy projects, money continues to pour into investment funds targeting the sector. In the last week, Capricorn Venture Partners said that it had reached the half way stage in raising money for its USD 140m Cleantech Fund, which will invest in European companies active in renewable energy, water purification, clean air and soils, greenhouse gas reduction and other areas.
Meanwhile private equity firm Environmental Capital Partners launched with USD 100m in funding, aiming at putting money into businesses in the US and Canada that are developing green consumer products, alternative energy and industrial environmental services.
In Canada itself, a firm called Venture Coaches is raising money for a private equity fund totalling just over USD 100m, with a brief to invest in the energy management, renewable energy and waste stream sectors.
Investors have clearly not been deterred by the fright caused to financial markets this summer by the credit market meltdown. Indeed yesterday the WilderHill New Energy Global Innovation Index (NEX) of 88 clean energy shares hit a new record, and took its advance since the beginning of 2007 to a mighty 44%.