Australia’s new Prime Minister Julia Gillard has demonstrated strong support for her domestic renewable energy industry.

Sworn in last month to replace previous leader Kevin Rudd, Gillard said she is “committed to Australia’s largest ever investments in solar and other renewables.”

Gillard has not made specific mention of the controversial carbon cap-and-trade system which former PM Rudd had championed.

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Last week, President Obama offered a strong show of support for domestic solar power with the offer of $2 billion in loan guarantees for large scale solar projects in the Western United States.

Abengoa Solar is the recipient of the first offer, $1.45 billion to help finance the construction and start-up of a concentrating solar power (CSP) plant in Arizona.  Once operational, the “Solana” plant would add 250MW of electric capacity to the grid, enough to power 70,000 homes and reduce carbon dioxide emissions by 475,000 tons.

A loan of $400 million was also offered to Abound Solar Manufacturing to for the manufacture of thin-film cadmium telluride solar panels, the first time such manufacturing will be deployed anywhere in the world.  When completed in 2013, the manufacturing plant will be capable of producing enough panels to support up to 840MW of new solar every year.

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Worldwide, global venture capital investment in the green tech sector has climbed to $4.04 billion during the first half of 2010.  This represents a 65% increase from the same period last year, and slightly exceeds the investment record set during the “boom year” of 2008.

Data from The Cleantech Group and Deloitte shows that solar energy garnered about 40% of all investments, attracting about $811 million in funding.

“There’s been a very clear resurgence in solar activity and that is largely responsible for the strong quarter,” notes Richard Youngman, head of global research for the Cleantech Group.

Scott Smith, Deloitte’s U.S. clean tech leader believes this VC investment trend will have a positive impact on renewables and low carbon industries.    “The significant strengthening of corporate and utility investment into the clean tech sector, relative to 2009, is very encouraging, given the key role they will play in enabling broader adaptation of clean technologies at scale,” he said in a statement.

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According to an Ernst & Young global survey of 300 corporate executives, 70% of global firms with revenues of $1 billion or more say they will be increasing spending on climate change initiatives over the next two years.

Energy efficiency investments emerged as a major theme from the survey results.   More than 82% of respondents expected to make energy efficiency investments over the next year, and 92% of those polled said energy costs would be high on the list of priorities over that time period.

Melanie Steiner of Ernst & Young said these results show that despite uncertainty over climate change, “companies are really taking action anyway, because they’re seeing that this is a business issue and an opportunity to generate new revenue.”

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BEIJING, May 27 (UPI) — China and the United States signed eight green energy deals Wednesday in Beijing but financial details were not disclosed, Chinese media reported.

The deals, designed to increase cooperation in the sector, cover areas such as aviation biofuel, distributed energy systems using natural gas as fuel, smart meters and cellulosic ethanol, the China Daily reported. A number of Chinese and U.S. companies would be involved in the eight deals.

The report quoted analysts that the agreements between the world’s two largest energy users would encourage global collaboration in increasing energy efficiency and protecting the environment.

The agreements came at the conclusion of the two-day China-U.S. Strategic and Economic Dialogues in Beijing.

Zhang Guobo, head of the National Energy Administration, also noted bilateral collaboration in renewable energy development, adding: “The United States has advanced technology, and China has a huge market,” the China Daily reported.

U.S. Ambassador to China Jon Huntsman was quoted as saying the two countries will “take every angle” to ensure their cooperation in energy and environment.

Zhang said renewable energy development is important for China to achieve goals of increasing the use of non-fossil energy to 15 percent of primary energy use by 2020, and reducing carbon intensity by 40 percent to 45 percent in 2020 from 2005 levels, China Daily reported.

He said China will continue to focus on the development of hydro, wind, solar, and biomass energy in the renewable sector.

Earlier, U.S. Energy Secretary Steven Chu was quoted as saying improving energy efficiency would both reduce greenhouse gas emissions and boost economic growth.
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With domestic energy demand expected to grow almost 250% by 2028, Saudi Arabia must plan strategically to meet its future needs.  The desert kingdom is looking to renewable energy – specifically solar – to play a bigger role in its domestic energy mix.  Saudi Arabia is aiming generate between 10-20% of its energy from renewables by 2020.

In a recent statement, Saudi Aramco CEO Khalid A. Al-Falih warned “if no efficiency improvements are achieved, and the business is as usual, the oil availability for exports is likely to decline to less than seven million barrels per day by 2028, a fall of three  million barrels per day while the global demand for our oil continues to rise.”

The Kingdom is planning to invest nearly $80 billion to boost its power supply to 60,000MW, with solar energy likely to be the largest new contributor.  By 2020, solar technology could satisfy up to 5GW of Saudi Arabia’s total energy demand.

Saudi Arabia is reportedly in talks with Abu Dhabi’s carbon-free Masdar City initiative regarding a possible future collaboration.

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The United Kingdom’s offshore renewable energy capacity could one day generate as much electricity every year as would one billion barrels of oil, according to a recent report from the Offshore Valuation Group.

The Group projects that utilizing just one third of the available wind and tidal resources off the UK coast could eventually transform the nation from a net importer to a net exporter of electricity by 2050.  At the same time, deploying these resources would result in a savings of 1.1 billion tons of carbon dioxide emissions and create infrastructure with a positive net present value of £35 billion.

“We have long been saying that the North Sea will become the Saudi Arabia of wind energy,” says Peter Madigan, head of offshore renewables at industry advocacy body RenewableUK.

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Over the next two decades, the world may be faced with a global infrastructure debt of as much as $2 trillion a year, according to the “Positive Infrastructure Report,” a new publication from the World Economic Forum (WEF).

Brazil, China, India and the United States are the largest infrastructure markets in the world, and as such, face the most severe challenges in the years ahead.  The WEF report says that the public sector has a vital role to play in successfully meeting these challenges, and advocates for a strategic deployment of public funding through centralized global stimuli packages.

Developing nations, on the other hand, face a dearth of sufficient capacity.  In order to satisfy increasing demand, the WEF suggests incentive measures such as optimizing existing structures via pricing schemes and advanced technologies.

Overall, the WEF report says the most successful infrastructure projects around the world come via public-private partnerships (PPPs).

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At first glance, Saudi Arabia may seem an unlikely supporter of renewable energy, considering the vast oil resources under its control.  On the contrary, Saudi Arabia is looking to take advantage of its other prolific resource – sunlight – with new solar power projects designed to keep the country competitive as renewables increasingly play a role in the overall energy mix.

Mohammed Y. Al-Qahtani, executive director of petroleum engineering and development at Aramco believes “renewables will have an important place in the total energy equation.”   Saudi Arabia is looking to use its substantial solar resources as a substitute for oil to generate power domestically as well as to power desalination plants.  Although solar is currently more a more expensive means of power generation than oil or gas, Al-Qahtani expects this will shift over time.

The Kingdom recently invested in one of the world’s largest solar-heated complexes at a school in the northwestern part of the country, and is considering participating in the Desertec Initiative which would transmit electricity from North Africa and Middle Eastern solar power plants to Europe.

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Grappling with skyrocketing energy demand, high pollution levels and international pressure to reduce greenhouse gas emissions, reports indicate China may consider instituting taxes on carbon or other resources to boost support for low-carbon energy technologies.

Experts from the Energy Research Institute under the National Development and Reform Commission – a Cabinet department focused on mid- and long- term domestic development – say if it is deemed beneficial, a carbon tax is likely to be levied during the 12th Five-year plan (2011-2015).

Jian Kejun, a senior researcher with the Institute, reaffirmed China’s commitment to reducing its carbon intensity 40-45% by 2020 in recent remarks to the newpaper China Daily.  To reach this target, the government is prepared to pursue “tougher measures” over the next five years, including subsidies and incentives for low-carbon technologies in addition to a potential tax.

Increasing support for scientific research is another top priority in China.  Right now, China’s investment in scientific clean energy research is only one-sixth that of the United States.  However by 2025, China’s investment in this area may overtake that of the United States.  ”If this comes true,” Jing said, “we can start to dream of becoming a low-carbon technology leader in the world.”

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The Asian Development Bank (ADB) is providing $2.25 billion in financing to the Asia Solar Energy Initiative, in the hopes of attracting significant additional investment – on the scale of $6.75 billion over  the next three years.  The Asia Solar Energy Initiative (ASEI) will develop large-scale solar power projects in the Asia and Pacific region, aiming for 3,000MW in installed generating capacity by 2012.

“With energy demand projected to almost double in the Asia and Pacific region by 2030, there is an urgent need for innovative ways to generate power whole at the same time reducing greenhouse gas emissions,” said Rajat Nag, managing director at ADB.  Central Asia is a region of particular interest, thanks in part to the vast amounts of desert land available for massive solar construction.

In 2009, ADB supplied nearly $1.3 billion in funding for clean energy projects, exceeding its $1 billion target.  Beginning in 2013, the Bank is aiming to increase its investment to $2 billion/year.

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The U.S. Department of Energy (DOE) under the leadership of Energy Secretary Steven Chu is not waiting around for the Senate as it works to draft new climate legislation.

Secretary Chu announced Friday that the DOE will invest over $200 million over the next five years to increase deployment of solar and wind energy technology throughout the United States.  This funding will “help strengthen American competitiveness in renewable energy and transform the US into a lasting manufacturing presence in the 21st century clean-energy economy,” said Chu.

The DOE funding will support both manufacturing-focused research projects in wind and solar, as well specific funding for research into advanced processes for use in the photovoltaic (PV) industry.

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Research expects investments in renewble energy to grow to $653.35 billion within five years, as governments and investors around the world funnel money into this growing sector.

Despite the widespread economic malaise and the tight credit market, global investment in renewable energy increased 43.4% between 2008 to 2009, reaching $336.78 billion.  Since 2001, the industry has achieved a combined annual growth rate (CAGR) of 30.8%.

China’s total investment of $11.48 billion made it a major player in the Asian markets, says GBI, with notable investments made in wind and solar projects.

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European Union countries aim to reduce emissions of carbon dioxide by 80% below 1990 levels by 2050; keeping within scientific recommendations to limit global temperature increases to 2°C.  Major new investment will be needed to achieve cuts on this scale, specifically in renewable power projects and electricity infrastructure upgrades.

However, despite these costs, a new report from three leading consulting firms predicts that the cost of electricity in Europe in 2050 would be no higher than it would under a “business as usual” plan with no carbon-reduction action taken.

The study, jointly published by McKinsey, European Climate Foundation and E3G, highlighted the following 3 points:

- Renewable power infrastructure is capital-intensive at the onset, yet over time costs less to run than do traditional power plants.

- Replacing outdated coal-fired power plants with new ones is actually more expensive that substituting wind or solar farms instead

- Smart grid investment continent-wide will provide major savings in energy efficiency, and help improve the reliability (and price) of renewables.

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Abu Dhabi-based Masdar has begun drilling on what will be the first geothermal project in the Middle East region.

Masdar, which was founded in 2006 to advance research, development and commercialization of renewable energy and clean technologies, has employed an Australian company to do preliminary drilling for subterranean geothermal energy sources such as steam or hot water.  Two wells have been drilled so far, with potentially more to come.

Masdar reportedly is planning to invest around $11billion into this venture, and aims to produce 5MW of power to power the air conditioning systems in MaAbu-sdar City.  Masdar City is the world’s first carbon-neutral zero waste city, and is the global headquarters of the International Renewable Energy Agency (IRENA).

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Bloomberg New Energy Finance says although global spending on renewable energy may double by 2030, it still may not be enough to combat the worst dangers of climate change.

Projections from the Global Energy and Emissions Model (GE2M) shows that investment in renewable energy must reach at least $230 billion by 2020, and $500 billion by 2030.  Likewise, to achieve a high level of carbon emissions reductions, the price of carbon will need to increase to $100/ton by 2030.

“These findings confirm that in spite of the ongoing economic malaise, investment in renewable energy should continue to grow, driven heavily by existing government targets.  If governments take the threat of climate change seriously, there will be an increasing role for renewable energy up to 2030,” remarked Guy Turner, director of Carbon Market Research at Bloomberg New Energy Finance, who foresees growth in wind, solar PV and biomass technologies.

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The global clean energy sector was predicted to take a bath or at best remain flat last year in light of the dismal global economy.  However, according to a new report from clean tech research and publishing firm Clean Edge, the sector not only stayed afloat, but produced increased revenues in three major areas.

Clean Edge data shows that combined global revenues for solar photovoltaics (PV), wind energy and biofuels grew 11.4% from 2008 levels to reach $139.1 billion in 2009.

Significant growth in China’s clean tech sector contributed to this growth in global revenues.  China is now the world’s largest PV cell manufacturer, and over the past year has announced major plans to build wind and solar “megaprojects.”  China may end up spending between $440 billion to $660 billion on clean energy over the next ten years.

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Sustainable investments in Switzerland rebound strongly to hit new peak

Sustainable investments run by Swiss fund managers rebounded after the financial crisis to reach a new high of CHF34.1bn (€23bn) during 2009 – with investment inflows outstripping the market average – according to a report from Zurich-based consulting firm onValues. The rise in sustainable assets managed by fund managers at the end of last year represented a 63% increase over the figure at the end of December 2008. The figures comprise assets in investment funds, segregated mandates and structured products.

In a 12-page report surveying 19 asset managers, onValues said the net asset flow into sustainable funds was approximately 22.9%, during 2009 compared to 4.5% seen by the average Swiss fund provider over the same period. The report said the sustainability asset inflows were “particularly marked” for thematic equity funds and new funds in the real estate and emerging market equities.

In a breakdown of Swiss sustainable assets, onValues said funds accounted for approximately 55% of the total, segregated mandates for 40% and structured products 5%. Institutions account for 45% of the sustainable assets market, with the balance invested by retail/private banking investors. However, the report said fund manager respondents believe institutional investors will drive the main growth in the sector in the next three years. OnValues said it set out to assess the market for specialist sustainable investment products and not the degree to which ESG factors are being used in mainstream investment portfolios. It said this means there are probably more total assets in Switzerland run via broader sustainability criteria.

The survey was backed by Bank Sarasin, Bank Vontobel, Ethos, Forum Nachhaltige Geldanlagen, INrate, Kaiser Ritter Partner, SAM, Swisscanto, UBS and Zürcher Kantonalbank.

Climate change investments hold both immediate and long-term potential for growth, says Deutsche Bank Climate Change Advisors in a new report.

Kevin Parker, DB’s Global Head of Asset Management, had this to say about this growing investment space:

“The shift to a low-carbon economy to mitigate global warming will require the creation of new technologies, industries and jobs on a massive scale.  The absolute imperative to prevent climate change is therefore also, I believe, the economic and investment opportunity of a lifetime.”

“…  In other words, climate change is not merely an investment sector that may hold future promise; it is a sector that has already delivered and is continuing to deliver.  That is is why we believe institutional investors should be shifting their asset allocation towards climate change.  For fidiuciary reason, if for no other, they should be seeking out this attractive source of alpha.”

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