Alternative Energy attracts $180 billion: Solar $80 bil, Wind $50 bil

Green energy technology: Serious greenbacks hunt for clean power ideas


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http://www.busrep.co.za/index.php?fArticleId=4142278


By Leon Marshall

Any bright ideas out there on ways to curb greenhouse gases or to otherwise protect the environment? Come up with one and it could make you or your company rich, very rich indeed.

The world over, growing piles of money are searching for just such opportunities.

There may still be those who scoff at climate change as an anti-corporate scare story, or who dismiss conservation as a hindrance to development.

But investment markets are starting to suggest otherwise.

For all its socioeconomic challenges and related development priorities, South Africa has not been slow in grasping the shift in attitude.

The department of trade and industry launched an environmental goods and services forum in August to help local business tap into the world's multibillion-dollar green industry and steer the country towards meeting international environmental standards.

Already three years ago South Africa's demand for environmental goods and services was estimated at between R14.5 billion and R23.2 billion, and imports constituted a considerable portion of this.

Now a global perspective on the scale of the sector's growth has come from Paolo Pietrogrande, a leading businessman. Pietrogrande is the chairman of Atmos, an Italian company dedicated to innovation in the field of clean technologies and the financial aspects of greenhouse gas reductions.

He calculates that this year alone about $9 billion (R61 billion) of institutional funds has been scanning the globe for investment opportunities in clean technology. He believes the amount will grow rapidly as awareness takes hold of the need for industrial society to change its ways.

Pietrogrande, who has served with major firms such as Ryanair and Ducati, gave his prognosis earlier this month to an international group of journalists who met at Villa Mondragone, a Renaissance palace overlooking Rome. Environmental issues were discussed under the banner of the Italian Greenaccord Media Forum.

According to Pietrogrande, venture capitalists and other investors are starting to recognise the potential of the clean energy and clean technology sectors.

Real money is being invested, not just corporate social responsibility funds. These are serious investors who do due diligence studies and take expert advice. They expect good and dependable returns, and they have not been disappointed.

Renewable energy stocks have grown in value by about 250 percent over the past two years and have been noticeably unaffected by market downturns. Returns may still not be among the highest, but these tend to be seen as long-term investments.

The sentiment underlying the trend is inspired by growing public awareness of global climate change as well as the mounting energy crisis. Pietrogrande charges that the media is not appreciating the true scale of change happening in global markets and industry, and that journalists tend not to dig deep enough.

By the nature of his company's business, Pietrogrande may have a vested interest in talking up the green market. But his assessment is not disproportionate to that of, for instance, the South African trade and industry department, which sets the industry's global worth at $600 billion and growing at about 45 percent a year.

By Pietrogrande's calculations, European investors have already put e200 billion (R2 trillion) into clean technology. Europe is the trend setter in carbon trading, which is now a e20 billion a year business.

And alternative energy is gaining ground on world stock markets. Solar power has attracted $80 billion in funds, wind power $50 billion and biofuels another $50 billion.

Another statistic from Pietrogrande that shows the growing global awareness is that the term "climate change" has appeared no fewer than 130 000 times in English-language newspapers this year.

Published on the web by Business Report on November 23, 2007.