The impact of the economic downturn on the renewables sector

In a period of economic decline and environmental regulation to source green energy by the EU Commission utilities are exposed to increasing pressure to mitigate costs as well as make the correct environmental choices either through M&A or through organic carbon offsetting measures. This brief examines the key issues surrounding utilities and the opportunities in the renewables market.

Report Highlights
The key macroeconomic indicators highlight the speed and the depth of the economic downturn with reference to supply and demand-side impacts on investment appraisal, the availability of credit and the attractiveness of the renewables sector as a growth and opportunities market.

Prices act as key signals to decision makers in business planning, current commodity prices will be positive

M&A activity has been bullish but is set to change through 2009 as the economic climate affects both expectations and the availability of credit.
[Studien Infos ausblenden]

DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
There was considerable warning of a global economic recession (1/2) 2
There was considerable warning of a global economic recession (2/2) 3
The 'greatest' recession is currently affecting the advanced economies 4
Datamonitor recognizes the speed and depth of the downturn in the UK 5
With the downturn come the market opportunities for innovators 6
Output has fallen globally and is set continue this trend for the foreseeable future 7
Equity markets around the world reflect the crisis in investor confidence 8
The business cycle has seen six recessions since 1970 9
Securitization has been at the root of the credit problem 10
The circular flow of income illustrates the capital funding dilemma 11
The paradox and failure of expanding credit has hurt renewables 12
The idea of renewables as 'distressed' assets will not help green growth 13
The price and opportunity cost of commodities will play an important role in renewables investments 14
Oil and gas prices will influence the uptake of green energy and the EU Emission Trading Scheme 15
Current generation spreads favor fossil fuel-fired plants 16
However, the power curve shows positive price signals to generate 17
UK coal will be the input fuel of choice at future EU ETS prices 18
Economics and environmental obligations do not mix well 19
On average, prices have been in favor of alternative sources of generation 20
Price signals have to remain over a longer period to be effective 21
According to the Stern Review, global growth rests on renewables 22
The use of fiscal force to assist a 'winner' is a dangerous strategy 23
A purely government-led recovery should be side-stepped through 2009 24
The economy should be decoupled from 'decarbonization 25
A simple SWOT analysis highlights the concerns and complexities surrounding renewables 26
The results show that, all other things being equal, renewable growth is uncertain in today's recession 27
Datamonitor's Financial Deals Database shows that the economic downturn offers a silver lining 28
The European wind market attracts the biggest deals by value1 29
Deals by regions illustrate Europe as a target destination 30
Wind and solar energy are the chosen technologies in Europe 31
By deal value, the EU is a highly attractive region for investors (2006-2009) 32
Two out of five deals globally are made in the EU region (2006-2009) 33
Adopting the Green New Deal will be important for the understanding of global renewable investment 34
The Keynesian Green New Deal ticks the boxes, but may fail to convince 35
Future forecasts predict light at the end of the tunnel 36
Government action and regulation will be the best signal to invest 37
The threat of nuclear remains a barrier to renewable success 38
Our bespoke services can be tailored to your specific needs 39
Ask the analyst 39
Datamonitor consulting 39
Disclaimer 39
[Inhaltsverzeichnis ausblenden]

Figure 1: There was considerable warning of a global economic recession (1/2) 2
Figure 2: The 'greatest' recession is currently affecting the advanced economies 4
Figure 3: Output has fallen globally and is set continue this trend for the foreseeable future 7
Figure 4: TypeFigTitleHere 8
Figure 5: The business cycle has seen six recessions since 1970 9
Figure 6: Securitization has been at the root of the credit problem 10
Figure 7: The circular flow of income illustrates the capital funding dilemma 11
Figure 8: TypeFigTitleHere 15
Figure 9: Current generation spreads favor fossil fuel-fired plants 16
Figure 10: However, the power curve shows positive price signals to generate 17
Figure 11: UK coal will be the input fuel of choice at future EU ETS prices 18
Figure 12: Economics and environmental obligations do not mix well 19
Figure 13: According to the Stern Review, global growth rests on renewables 22
Figure 14: A simple SWOT analysis highlights the concerns and complexities surrounding renewables 26
Figure 15: The European wind market attracts the biggest deals by value1 29
Figure 16: The European wind market attracts the biggest deals by value1 29
Figure 17: Deals by regions illustrate Europe as a target destination 30
Figure 18: Wind and solar energy are the chosen technologies in Europe 31
Figure 19: Wind and solar energy are the chosen technologies in Europe 31
Figure 20: By deal value, the EU is a highly attractive region for investors (2006-2009) 32
Figure 21: Two out of five deals globally are made in the EU region (2006-2009) 33
Figure 22: Future forecasts predict light at the end of the tunnel 36
[Tabellenverzeichnis ausblenden]