G-20 Clean Energy Report


Figure 2: Sustainable Energy Finance Continuum


private equity financing dropped 43% last year to US$6.4 bn. The US remained the overwhelming leader in venture capital investment, with priority given to next-generation biofuels, advanced solar, energy efficiency and smart grid technologies. Brazil came in a distant second.


Renewable Capacity Growth The US leads the world in installed


Source: The Pew Charitable Trusts


investment that occurred from 2006 to 2007 have plunged in the last two years.


Asset Financing Pew identified trends in three types of investments and financing that are critical to technology R&D, manufacturing scale-up and project rollout in the clean energy sector: 1. Asset Financing: Typically associated with the installation of clean energy equipment and generating capacity, asset financing is the dominant class of clean energy finance. Because of the fiscal crisis, asset financing in 2009 fell 6% from the year before. Still, US$94.9 bn, more than 80% of all clean energy financing, was invested in physical assets that generate energy (power, heat, fuels), with onshore wind being the dominant sector because of its relative maturity and scalability. China was the leader in asset financing, followed by the US.


2. Public Market Financing: This class, which includes initial public offerings (IPOs), enables companies to raise capital for expansion and growth. In 2007, public funding peaked at US$23 bn. But G-20 public offerings declined by 45% over the last two years, with many companies cancelling their IPOs because of poor market conditions. Total public fundraising of US$12.1 bn in 2009 constituted less than 11% of G-20 clean energy investment. However, an extended IPO drought was broken late in 2009, particularly in China.


3. Venture Capital/Private Equity Financing: This class is closely linked with technology innovation and development. Reflecting the overall market downturn, venture capital/


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wind, biomass and geothermal power capacity but was very close to losing its top position in overall installed capacity as China surged forward. Despite pioneering development of numerous key solar technologies, the US lagged well behind G-20 leaders in installed solar capacity.


Germany was the undisputed leader in the solar sector. The advent of regional and global carbon trading markets,


along with strong policy frameworks in countries such as Spain, Brazil, India and China, accounts for the relative strength of these nations’ clean energy sectors.


The US remained the overwhelming leader in venture capital investment


Global stimulus plans target US$184 bn for clean energy,


led by the US (US$67 bn) and China (US$47 bn). By the end of 2009, only 9% (US$16.6 bn) had reached the sector, with the US and South Korea spending the most to date. Two-thirds of the stimulus funding is projected to be spent during 2010 and 2011. ■


The Pew Charitable Trusts is working on a second report that will investigate the direction of the clean energy economy in G-20 countries in the years to come. The report will harness Bloomberg New Energy Finance’s advanced modelling


capabilities to explore the contribution clean energy can make to the world’s economic and environmental future if certain policies and measures are adopted nationally by governments to accelerate private finance and investment.


www.pewtrusts.org Footnote:


1. Who’s Winning the Clean Energy Race? – Growth, Competition and Opportunity in the World’s Largest Economies. The Pew Charitable Trusts, 2010.


worldPower 2010


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