GDF Suez (GSZ.PA) created the Blue Orange fund to invest primarily in waste management. Energy Technology Ventures, a $300 million fund created by GE, NRG Energy, Inc. (NYSE: NRG) and ConocoPhillips (NYSE: COP), plans to invest in about 30 companies over the next four years. Their first portfolio companies are in Alta Devices (solar PV), Ciris Energy (cleaner coal) and CoolPlanetBioFuels (non-food biofuels).
Japanese companies including Sharp (6753.T), Toshiba (6502.T) and Panasonic (NYSE: PC) pledged to invest $4.5 billion in cleantech over the next 15 months. South Korean companies Samsung and LG Group have pledged billions more.
Public Markets
Despite strong cleantech investments on the private equity side in 2010, it was a dismal year for clean energy on the public markets. Worldwide, clean energy stocks were down 14.6% using the WilderHill New Energy Global Innovation Index (NEX) as a benchmark, compared to a 12.8% gain for US S&P 500 index and a 16.9% rise for the Nasdaq Composite.
Still, energy efficiency, smart grid, power management and electric vehicles stocks rose an average of 19.5%, while wind stocks gave up 37% and solar stocks fell 26%. Energy storage stocks were down 15% and biomass stocks were flat, down 1%.
Polypore International (NYSE: PPO), a US battery membrane technology specialist, was the best performing cleantech stock for 2010, rising 242%. Four other energy efficiency stocks followed: US-based Universal Display (Nasdaq: PANL), which makes organic light-emitting devices, rose 148%; Chinese LED supplier Zhejiang Yankon Group (600261.SS) increased 137%; US inverter maker Power-One (Nasdaq: PWER) gained 135%; and US efficient-motor manufacturer Baldor Electric (NYSE: BEZ) advanced 124%.
German solar cell manufacturer Q-Cells (QCE.DE) was the worst performing stock, falling 75%, followed by US wind component maker Broadwind Energy (Nasdaq: BWEN), down 71%, German solar panel maker Roth & Rau (R8R.DE), down 62%, US battery maker A123 Systems (Nasdaq: AONE), down 58%, and US thin-film producer Energy Conversion Devices (Nasdaq: ENER), down 57%.
"2010 was a disappointing year for stock market investors in clean energy. To some extent, the sector has been the victim of its own success: sharply reduced prices for solar panels and wind turbines are good news for the economics of clean energy generation, but they are not necessarily good for the share prices of the companies that make the equipment," said Michael Liebreich, CEO of Bloomberg New Energy Finance.
Clean energy shares also suffered because of unsettled tariff laws in Germany, Spain and France, and because of cheap natural gas prices.
"It will be most interesting to see what happens in 2011. You have an industry with sharply growing volume of investment in generating capacity, which now has a well-developed supply chain with a good track record of driving down costs," Liebreich said.
As retail investors have jumped into the market over the past few months, they're already showing an increased appetite for some publicly traded cleantech companies. Tesla (Nasdaq: TSLA) is up, Amyris (Nasdaq: AMRS) has more than doubled, and rare earth companies have more than tripled.
Much of the funding over the past year came from government, whether in the form of cheap debt in China, sweet off-take deals for European offshore wind, feed-in tariffs for solar or a regulatory push for smart grids. The industry needs to continue to drive down its costs and reduce its reliance on this sort of support.
Overall, it looks like cleantech will prevail this year even in the face of waning European feed-in laws and the lack of energy policy in the US. Bloomberg New Energy Finance has long predicted that $500 billion a year will have to be spent on clean energy for carbon emissions to peak by 2020. Even in a down year on the public markets, adding up government, angel and venture capital, M&A, and corporate investments, project finance, private equity - we are half-way there.
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Rona Fried, Ph.D. is CEO, SustainableBusiness.com
