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The Carbon Trust report, carried out by Cleantech Advisers LLC, a division of the Cleantech Group™ LLC also shows that if growth continues at the current rate, investment in clean energy could reach around €3.5 billion in 2007 – 2010, an increase of 75 per cent. Clean energy companies are those operating within the energy system or supply chain with the potential to reduce C02 or other greenhouse gas emissions.
Analysis of the technology types that are attracting investment in Europe highlights an interesting trend – significantly more capital was raised in Europe for energy consumption and efficiency technologies than in North America. This indicates an emerging energy efficiency specialisation for Europe that could further develop in the next few years.
Geographical trends are also appearing. Fifteen per cent of deals involved companies based in Scandinavia, with France and Germany also performing well with seven and fourteen per cent respectively. Regional clusters of clean energy companies have also appeared, with examples including London, Oxford, Munich, Paris and Berlin.
Peter Shortt, Managing Partner, CT Investment Partners LLP, commented:
“Five years ago, clean energy was not viewed as a sector that could offer good returns for investors. Today, it is a multi-billion Euro market where new technologies and business models are already exploiting the opportunities presented by the low carbon economy. What is really exciting is that the clean energy is still maturing so we can expect to see many other innovative ideas and high growth companies emerge over the next few years as part of a buoyant clean energy market in Europe.”
Nicholas Parker, Chairman and Co-founder of Cleantech Group LLC, an international organisation that tracks cleantech investment worldwide and focuses on accelerating cleantech solutions for global problems said:
“This timely and insightful report points out the continued leadership role Europe is playing in the growth of clean technology with the global community. This level of investment highlights investor confidence in consumer and business adoption of the technology that will lead to competitive returns going forward.”
The Carbon Trust’s research looks in detail at trends in venture capital investing in European clean energy companies between 2003 and 2006. Other findings include:
- Although renewable energy generation technologies are as popular as technologies aimed at energy conservation and energy efficiency in commercial buildings and industrial settings, significantly more capital was raised for consumption and efficiency technologies in Europe than in North America – could this be an emerging specialisation for Europe?
- The IPO market is becoming increasingly important for clean energy investments – during 2003 – 2006, 45 venture capital backed clean energy businesses based in Europe raised more than €2.5 billion from the quoted markets;
- The North American clean energy market remains larger than that in Europe – European clean energy markets raised on average 60 per cent of their North American equivalents by number of investment rounds made and 40 per cent by amount invested;
- Investment growth in Europe was strong during the period but did not accelerate at the same rate as North America, in part owing to the IPO market displacing venture capital investment that could normally be sought by businesses raising growth finance;
- New markets for clean technologies are emerging such as the portable power electronics industry, which demand ever more power and put pressure on existing battery technology;
- Clean energy companies in our dataset averaged €4.4 million invested per round;
- Upstream technologies accounted for 23 fundraising rounds during 2003 – 2006, infrastructure for 36 rounds, energy generation for 165 rounds, services for 17 rounds and consumption/energy efficiency for 203 rounds;
- There are still very few funds specialising in the clean energy sector and with the exception of the Carbon Trust, CDC Ixis and Emerald Venture Partners, few clean energy funds have demonstrated a consistent track record in the sector
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