The research for the The Winds of Change report surveyed 200 senior executives from across the global energy industry, and concluded that the recession has changed the deal-making landscape of the industry dramatically, with the key beneficiaries being larger utilities and power companies who are well placed to take advantage of ‘opportunistic disposals’.
“Without doubt, the global financial crisis has made access to capital for even the largest players in the sector difficult. Nevertheless, the fundamental drivers which have made renewables such a dynamic sector in the last few years remain, notably the climate change agenda, dwindling fossil fuel stocks and concerns over the security of energy supply,” said KPMG Global Head of Energy and Utilities for Transaction Services Andy Cox in the foreword to the report.
The report said that the lack of strong balance sheets and long term relationships with lenders put many smaller developers at a disadvantage. Seventy per cent surveyed from smaller companies are finding financing harder to come by than a year ago, compared to 57 per cent of larger companies.
However it also found that 78 per cent of senior executives from across the industry believe renewable energy projects are economically viable despite collapsing fossil fuel and commodity prices, and the credit crunch.
In Australia, National KPMG National Leader of Renewables Matt Herring expects a boost in investment opportunities in the national renewable energy sector as a result of the passing of the Renewable Energy Target bill through Parliament, which mandates a target of 20 percent renewable energy by 2020.
“The RET scheme will create some challenges but, coupled with the funding programs for renewable energy and initiatives to combat climate change, there will be some exciting opportunities,” Mr Herring said.
Future investment is likely to favour the United States, with 42 percent of respondents intending to invest in the US, 24 per cent in India, 22 per cent in China and 21 per cent in Canada (respondents could be investing in more than one country). The report attributes this response to large portions of stimulus funding directed to the renewable sector in these countries.
“As governments seek to reinvigorate national economies through a series of fiscal stimulus packages, one of the key beneficiaries is clearly green energies. Nowhere is this more evident than in the United States, the country which respondents see as by far the most attractive for investment in the next 12 months,” said Mr Cox.
According to the findings, the renewable energy industry continues to favour more established technologies. Over 60 per cent of respondents believed that onshore wind and solar power will grow by more than 5 per cent in 2009, compared to only 38 per cent expecting similar levels of growth in offshore wind, and only 19 percent in marine technologies.
