NEW ENERGY METRICS FROM THE MARKETPLACE

New Energy industries watcher Clean Edge Inc. brings good news and big numbers in Clean Energy Trends 2009, its assessment of 2008 and predictions for this year. Global revenues for the 3 major sectors it tracks (solar photovoltaics, wind power, and biofuels) expanded 50%, from $75.8 billion in 2007 to $115.9 billion.

The expansion saw revenue jumps in solar PV, wind, and biofuels deployment globally. Solar PV went from 2.8 gigawatts of installed capacity to 4.2 gigawatts. Biofuels increased from 15 billion gallons to nearly 20 billion gallons. Wind power expanded from 20 gigawatts installed to 27 gigawatts.

From Trends 2009 (click to enlarge)

There is also a frank assessment of this year’s prospects. Not surprisingly, Trends 2009 does not foresee another boom. The forecast is for constrained credit, cancelled plans, delayed plans and staff downsizing. 2009 will be a year of “refocus, consolidation, or retrenchment...” the report predicts.

The good news is, of course, that new government spending, new facilitative regulations, and stimulative policies will help New Energy do as well or better than any other sector through the financial crisis.

Trends 2009: “On balance, we believe clean energy and energy intelligence will be seen as a means to help economies around the world pull out of the current economic malaise.”

From Trends 2009 (click to enlarge)

New Energy revenues are expected to be flat or slightly decreased until (1) The initial public offering (IPO) market improves, (2) credit flows for new manufacturing and project deployment, and (3) stimulus money begins directly impacting the New Energy markets. Those things aren’t expected this year.

Ron Pernick, co-founder/managing director/report co-author, Clean Edge Inc.: "As many businesspeople, homeowners, and others can attest: 2009 will be a year to ‘get through.’"

But throughout the developed world, political leaders are funneling money to New Energy to feed their economic recoveries. Trends 2009 cites a Deutsche Bank report of 250+ climate change-related world policy developments and $200 billion in world stimulus spending for New Energy and other climate-related projects (green buildings, grid improvements, public transportation, etc.) from July 2008 to February 2009.

From Trends 2009 (click to enlarge)

The 3 most encouraging factors in U.S. New Energy: (1) Money from the stimulus bill (which can be tracked at Recovery.gov); (2) New policies recently passed by Congress (the 8-year solar investment tax credit (ITC) extension, the 3-year wind production tax credit (PTC) extension, new rules permitting utilities to use the ITC, the provision allowing New Energy developers to get 30% of their tax credits as a grant) and new policies in Congress's sites (RES, new transmission legislation, cap-and-trade system legislation); (3) Technical breakthroughs (cheaper solar panels, more powerful wind turbines, enhanced geothermal, proven hydrodynamic technologies, smarter grids, nest-gen biofuels breakthroughs, better vehicle batteries, improved efficiencies, bigger storage systems)

From Trends 2009 (click to enlarge)

Probably the most exciting part of Trends 2009 is its last section, a list of 5 trends to watch: (1) Smart grid development; (2) Efficiency technologies; (3) Emerging global New Energy markets; (4) Grid infrastructure expansion; and (5) Micropower. For each trend, there details on an exemplary new company and its market.

How important is all this? Why all the attention to these metrics?

President Barack Obama, in his address to the joint session of Congress last month: "We know that the country that harnesses the power of clean, renewable energy will lead the 21st century…"

From Trends 2009 (click to enlarge)

Getting Serious About Clean-Energy Stimulus
Ron Pernick, March 9, 2009 (Clean Edge)

WHO
Clean Edge Inc. (Ron Pernick is co-founder/managing director; Joel Makower, Ron Pernick & Clint Wilder, report co-authors)

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WHAT
Clean Energy Trends 2009 summarizes the 2008 boom and predicts a grimmer year in 2009.

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WHEN
- Clean Edge has been tracking New Energy markets for “nearly a decade.”
- Last year's Trends report predicted a boom year in 2008 and it proved right.
- 2007 to 2008: Revenue growth in the 3 key clean-energy sectors expanded 50% globally.
- 2007: 272 U.S. IPOs
- 2008: 43 U.S. IPOs

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WHERE
- Trends reports 2008 global investment growth, new investments and jobs.
- It reports on venture investment in the U.S.
- Noteworthy 2008 achievements, by sector: (1) Brazil gets 50% of its automotive fuel from ethanol; (2) Denmark gets more than 15% of its electricity from wind, the highest percent of any country; (3) Iowa gets 5.5% of its electricity from wind, the highest percent of any U.S. state; (4) China gets 20% of its new hot water capacity from solar.
- The U.S. became the biggest wind power producer in the world by adding 8+ gigawatts of capacity.

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WHY
The U.S. stimulus package (the American Recovery and Reinvestment Act of 2009) includes $70+ billion in direct spending and tax credits for New Energy and transportation programs: (1) $11 billion for “smart grid” development; (2) $4.5 billion to make federal buildings more energy efficient; (3) $2 billion in grants for advanced electric vehicle batteries; (4) $8.4 billion for mass transit; and (5) $20 billion in New Energy, plug-in hybrids, and Energy Efficiency tax incentives and credits.
- Factors in the 2008 boom: double-digit expansion of markets, growing wind farm development costs 2nd to high-demand/low-supply market dynamics.
- For the first time, a single New Energy – wind – had over $50 billion in revenues.
- Global investment in energy technologies (venture capital, project finance, public markets, and R&D) grew 4.7% from $148.4 billion in 2007 to $155.4 billion in 2008
- Biofuels was $34.8 billion in 2008, projected to $105.4 billion by 2018. 17+ billion gallons of ethanol and 2.5 billion gallons of biodiesel produced worldwide in 2008. Brazil got over 50% of its automotive fuels from bioethanol, the first time biofuels beat petroleum in any major market.
- Wind power (projected): From $51.4 billion in 2008 to $139.1 billion in 2018. Total installed capacity went to a record 27,000+ megawatts. Wind installations were 40% new electricity generating capacity brought online in 2008.
- Solar photovoltaics (modules, system components, installation) will grow from a $29.6 billion industry in 2008 to $80.6 billion by 2018. Installation for the year topped 4 gigawatts worldwide, 4 times the 2004 total.
- Biofuels, wind and solar PV together were $75.8 billion in 2007, 50% more to $115.9 billion in 2008 are projected to grow to $325.1 billion in 2018.

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QUOTES
- Pernick: “The clean-energy industry has primarily been a good-news story -- what other industry has sustained annual global growth rates exceeding 30 percent for the past decade? But clean tech, as noted above, isn't immune to or isolated from the forces impacting the broader economy. Yet new government spending, regulations, and policies should help the sector weather the current economic crisis better than most. On balance, we believe that clean energy and energy intelligence will be seen as a means to help economies around the world pull out of the current economic malaise, and we project that our three tracked sectors (solar PV, wind, and biofuels) will expand to $325 billion in global revenue by 2018.”
- Pernick: “In a mythical sense, out of the burning ashes of our crumbling post- industrial economy is emerging a new phoenix. Times of unprecedented chaos and crisis (which we are undoubtedly in) call for serious, purposeful response, vision, and action. While it won't be easy, we believe that cities, nations, businesses, investors, and individuals will rise to the challenge of forging a new clean-energy economy.”