234 CO Competitiveness Not Key to Growth

234 CO Competitiveness Not Key to Growth - FILE NAME DDI...

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FILE NAME DDI 2008 <CO>    Your Name Forrest Comp. Work – He’ll Get More He Promises  1
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FILE NAME DDI 2008 <CO>    Your Name Renewable Competitiveness High Now Venture capital investment gives US the edge in renewable energy Angus McCrone , consultant at New Energy Finance, 7-1- 07 Winning over the sceptics: The continued rise of private equity investment in clean energy, http://www.renewableenergyworld.com/rea/news/story?id=51489 The US dominated VC/PE transactions in renewable energy in 2006, accounting for $3.8 billion (Figure 5). The total for the EU-27 countries was just $1.5 billion. The US has a long-established VC/PE investor base and a strong track record in developing new technology. This will surprise some who have criticized the US government’s refusal to sign the Kyoto Protocol. However, the enabling environment for innovation in the US is very strong, with the VC industry now a significant source of capital formation in the clean energy sector. Some federal regulations are also helping, such as the production tax credit, and there is plenty of impetus below the federal level coming from state and local governments and from private sector investors and businesses. FIGURE 5. VC/PE investment by country, 2006. Grossed-up values based on disclosed deals. The figures include PE buy-outs but exclude OTC & PIPE deals. EU-27 has been included, as have its constituents, but only for comparison purposes. Source: SEFI, New Energy Finance Since 2000, US companies have attracted well over $6 billion in VC/PE funding, around nine times more than their nearest rivals in Australia, Spain and the UK, each of which has attracted around $850 million of VC/PE investment. In 2006, China followed the US in terms of value of VC/PE investment. It accounted for 74% of such investment in developing countries - a dramatic increase. Europe lags behind in renewable energy investment Angus McCrone , consultant at New Energy Finance, 7-1- 07 Winning over the sceptics: The continued rise of private equity investment in clean energy, http://www.renewableenergyworld.com/rea/news/story?id=51489 By contrast, European companies lag behind in raising VC/PE funding. VC/PE investment in the EU-27 actually fell slightly between 2005 and 2006, despite the strong global rise. It is interesting that the UK, Germany and France , which are major European economies with important financial sectors, accounted for a very small share of VC/PE flows into sustainable energy. This may be due to the deeper financial markets and an increasingly sophisticated investor base in Europe, which is broadening the range of options available to growing companies and enabling them to access the public markets sooner than in other countries. London Stock Exchange’s Alternative Investment Market (AIM), for example, has become a focal point for renewable energy companies seeking capital, particularly over the past couple of years. AIM is less regulated than many other markets designed for small to medium-sized
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This note was uploaded on 02/23/2012 for the course DEBATE 101 taught by Professor None during the Spring '12 term at University of California, Berkeley.

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234 CO Competitiveness Not Key to Growth - FILE NAME DDI...

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