Wind Energy Investment, Financing Activity Surge Higher in 2011 Despite Economic Headwinds
Capital intensive and with an installed capacity now totaling more than 238 gigawatts (GW), the wind energy market and industry is easily large enough to compete in a market where large, well-established businesses predominate. It remains competitive enough to be driven by innovation, however, and it’s built on a supply and value chain made up of a diversity of smaller product and service suppliers, which spells opportunity for promising new market entrants and business development investors.
Installed global wind energy capacity increased a robust 21% in 2011, as Josh reported yesterday, despite economic and political headwinds. More than 41,000 MW of new wind energy capacity were installed last year, bringing cumulative total installed capacity to more than 238,000 MW, based on latest figures from the Global Wind Energy Council (GWEC). Some 75 countries are now taking advantage of clean, renewable energy provided by wind power, and 22 of them having already passed the 1 GW mark.
“Despite the state of the global economy, wind power continues to be the renewable generation technology of choice. 2011 was a tough year, as will be 2012, but the long term fundamentals of the industry remain very sound,” stated Steve Sawyer, Secretary General of the Global Wind Energy Council (GWEC).
2011 Wind Energy VC, Company and Project Funding
Mercom Capital reports that venture capital (VC) funding for wind energy continued to increase in 2011, growing to $369 million as compared to $277 million in 2010 and $198 million in 2009. Fourteen deals were completed last year, as compared to 11 in 2010 and 20 in 2009.
Most VC wind energy company and project funding took place in the US—$294 million in 9 deals and $2.9 billion in 19 deals, respectively. Germany came in a close second with $2.8 billion in large-scale project funding, followed by Canada, with $1.1 billion, according to Mercom’s “Wind Funding and M&A 2011 Fourth Quarter and Annual Report.” Wind energy start-up Renew Wind Power raised $202 million in VC funding, the largest of the year. Boulder Wind Power and Wind Energy Direct ranked second and third, respectively, having raised $35 million and $29 million, respectively.
Wind energy project funding also continued to rise, reaching nearly $11 billion in 2011, $1.6 billion more than 2010’s total. Offshore wind energy project funding increased and accounted for $3.4 billion spread across five deals, while $7.5 billion was raised to finance 46 onshore wind energy projects. Some $1.5 billion was raised to fund Germany’s 400-MW Global Tech I offshore wind project, the largest project finance transaction in the wind energy industry in 2011.
New Wind Energy Installations 2011
In terms of new wind energy installations across countries, reiterating some and expanding on what Josh reported yesterday, China continued to solidify its position as the world’s largest wind energy market, having installed some 18,000 MW of wind power capacity in 2011, 44% of total wind energy installations worldwide. The USA ranked second, with 6,810 MW of new wind energy installations, while India moved up the table to third, having installed 3,019 MW of new wind energy capacity last year.
Wind energy activity in emerging markets outside the OECD—in Latin America, Africa and Asia—drove growth in 2011. India was one particularly bright spot for wind energy in 2011, while activity in Latin America—led by Brazil—also ran strong.
“India reached another milestone with adding over 3000 MW of wind power installed in 2011. This is likely to go up to 5000 MW per year by 2015. Ongoing initiatives of the Indian government to create new policies will attract large quantities of private investments to the sector”, commented D.V. Giri, chairman of the Indian Wind Turbine Manufacturers Association.
Brazilian wind energy installations rose 50% with the addition of 587 MW of new wind energy installations. Brazil’s installed wind energy capacity totaled just over 1,500 MW as of year-end 2011, and more than 7,000 MW of projects are expected to be completed by the end of 2016.
For a complete rundown on wind energy industry and market statistics, check out GWEA’s “Global Wind Statistics, 2011” report.
Wind Energy M&A 2011
Looking at wind energy mergers and acquisitions (M&A), Mercom found that 17 company transactions totaling $1.7 billion were completed in 2011, the largest being ZF Friedrichshafen AG’s $724 million acquisition of wind gear maker and Suzlon subsidiary Hansen Transmissions. CPFL Energia’s $596 million acquisition of Brazilian wind power operator Jantus ranked second. Wind component company M&A transactions accounted for $1 billion and downstream wind energy company M&A $700 million of the 2011 total.
Activity was also high in wind project M&A, where $4 billion of transactions spanning 61 deals were completed. The $1.1-billion, 50% acquisition of Dong Energy’s Anhold offshore wind farm was the largest transaction, while the $850 million acquisition of 11 wind farms by Bridgepoint from Auxiliar de Construccion y Servicios ranked second.
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