Confidence is returning to the renewables M&A market, according to PricewaterhouseCoopers.
A recent report from the firm found that deal volumes in North America increased by 71% during the last twelve months, with deal values rising by 43% to $12.9 billion. However, recent regulatory uncertainty seems to be clouding the environment in Europe: although deal volumes rose by 50% in the region, deal values fell by more than half. Certainly the latest regulatory ambiguity in the UK and Italy have had an effect on sentiment when it comes to cleantech equities.
PwC also noted that energy efficiency deals trebled in volume to represent more than $3 billion globally, or 11% of the value of all renewable transactions (overtaking last year’s dominant market segment: hydro power). According to PwC, this trend is not surprising, particularly in North America, since, when trying to reduce emissions, energy efficiency is “where the quick wins can be found”.
Overall, PwC expects confidence levels in renewables M&A to remain relatively strong throughout this year, which has to be a good sign for cleantech investors in general.
Helping this confidence is likely to be the political fallout from the Japanese nuclear reactor disaster. While, as PwC notes, it won’t “raise a red flag” to investment in nuclear, it could in the short term spur moves towards renewables by utility companies. Meanwhile, the return to an oil price of $100-plus per barrel is unlikely to do any harm either.
Since the inception of Quoted Cleantech we have maintained that cleantech investing in general makes for a sensible strategy over the long term. Furthermore, if one takes the view that events such as the unrest in the Middle East, as well as one-off incidents like the Fukushima nuclear reactor accident, only serve to highlight the precariousness of the world’s energy situation, it seems that cleantech investments could end up benefiting a lot sooner than previously expected.
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