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ePaper created 2014-06-03, 15:03:20 | version 1.30.01
72 03 INVESTMENT FLOWS Global Innovation Index (NEX), which tracked 96 clean energy companies, rose 53.9%, making 2013 its best year since 2007. Venture capital and private equity investment (VC/PE) in renewable energy fell sharply in 2013, down 46% to USD 2.2 billion. This was the third consecutive year of decline, and investment reached the lowest level since 2005. The decline reflected the shortage of successful exits by VC/PE-backed companies in recent years, and by the depleted cash holdings of many clean energy venture funds. Although the United States saw VC/PE capital raisings fall from USD 2.8 billion to USD 1 billion, it remained the largest venture capital and private equity market, with twice the VC/PE investments of Europe. Solar power was the biggest loser, with venture capital and private equity investment down more than two-thirds from its 2012 level, to USD 549 million. This was an indication that investors remained scarred by the insolvencies resulting from chronic global overcapacity since 2008. For the first time in a decade, VC/PE investment in wind exceeded that in solar power. Wind power was the only technology to see an increase in 2013—it rose by 70% to USD 1 billion. Mergers and acquisition (M&A) activity—which is not counted as part of the USD 214.4 billion in new investment—continued the decline that began in 2012, to its lowest volume since 2006. Total acquisition funding in 2013 stood at USD 53.7 billion, down 11% since 2012, and nearly USD 20 billion below the peak level reached in 2011. The nominal value of renewable power assets acquired or refinanced declined by 18% to USD 39.9 billion. In contrast, the corporate buying and selling of companies increased by 45% to USD 11.5 billion, reversing the dynamic seen in 2012. Trade in renewable power projects still accounted for the largest share of overall activity—some 75% of the total— but this was down from 81% in 2012. ■■ RENEWABLE ENERGY INVESTMENT IN PERSPECTIVE In 2013, gross investment in new renewable electric generating capacity (not including hydro >50 MW) amounted to USD 192 billioni , down from USD 234 billion in 2012 due to lower technology costs and policy uncertainty.3 This compares with gross investment in fossil fuel-based capacity of USD 270 billion, down from USD 309 billion in 2012. By this measure, the gap between renewable and fossil fuels increased slightly in 2013, with investment in renewable power capacity down 18% relative to 2012 and fossil fuels down nearly 13%. However, much of the investment in fossil fuels went to replacing existing coal-, oil-, and gas-fired power stations, while only USD 102 billion went to establishing additional fossil fuel capacity. By contrast, almost all investment in renewable capacity is net, meaning that it adds to overall generating capacity. Considering only net investment in 2013, renewable power was ahead for the fourth consecutive year, with its USD 192 billion taking a wide lead over fossil fuels’ estimated USD 102. Taking into account investment in hydropower projects >50 MW, global investment in renewable power capacity was well over twice the net investment in fossil fuel power capacity in 2013. i - This number is for renewable power asset finance and small-scale projects. It differs from the overall total for renewable energy investment (USD 214.4 billion) provided elsewhere in this section because it excludes biofuels and types of non-capacity investment such as equity raising on public markets, and development R&D.