Commodity Online
NEW DELHI: Even as Carbon trading market is booming and witnessed a growth of 36 % between January-Septmember 2008, investments in clean energy is certainly down this year, according to New Energy Finance, a London based company that tracks energy markets.

The global market for "carbon trading" grew 36 percent between January and September, to $84 billion from $67 billion. By the end of the year, the market is expected to surpass $100 bn. Going further, New Energy projected that the carbon market would continue to grow -- to $500 billion by 2012, and $3 trillion by 2020.

New Energy Finance data shows that capital and private equity investments in clean energy have dropped 24 percent in the third quarter of 2008. In July-September, such investments totaled $4.4 bn when compared to $5.8 bn in the previous quarter.
Investment in clean energy firms via public markets has been well down so far this year compared to 2007 levels. This has reflected distress in wider stock markets, and a sharp fall in quoted clean energy shares. The pattern continued in Q3, with just $2.9bn of new money raised, most of that from convertible issues rather than initial public offerings or rights issues.

The largest public capital raising was a $734m secondary issue by French renewable power leader EDF Energies Nouvelles, while the largest IPO was by California efficiency firm Energy Recovery, raising a modest $87m of new money.

The biggest slice of overall investment in clean energy is the financing of new capacity, such as wind farms, solar parks, biofuel plants and mini-hydro generation schemes. This continued at a high level in Q3, totalling $18bn, modestly below the figure for the second quarter.

New Energy Finance expects merger and acquisition activity in clean energy to accelerate in coming quarters, as opportunistic buyers from both inside and outside the sector take advantage of lower valuations and the fact that some target firms may run short of capital to develop their technologies.