A new global energy investment has reached one hundred billion US dollars by 2008
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As the crude oil prices increase closely to $ 200 per barrel, and food prices increase at double speed monthly, the proposal of bio-fuel as the energy solutions now has become common knowledge. On this case, coal-to-liquids, a new generation of nuclear power and other new energy sources has become a hot topic again. Due to the increasingly severe pressure on traditional energy sources, countries in the world accelerate the new energy investment amounts, while broadening the field of new energy investments. According to experts, a new global energy investment will be more than 100 billion US dollars by 2008, an increase of nearly 30%. Former international energy giant Enron investment manager said in an interview that given the alertness of food crisis caused by the bio-fuel, new energy investment tendency focuses on wind energy, solar energy and a new generation of nuclear power technology. In China, investment on coal-to-liquids production technology will become a investment hot spot.
1. The emerging energy investment driven by three power Enron Corporation's investment manager analyzes that there are three key forces driving the market toward new energy. The first is national energy security. In the United States, its oil consumption will continue to grow with the speed exceeding the lackluster domestic production curve, so that the United States increasingly depends on foreign oil markets. This will hit the US economy when oil imports disturbed. The second force towards emerging energy power is the concerns about climate change. Emerging energy can help reduce greenhouse gas emissions while meeting the energy needs of the people. Carbon dioxide, methane and other greenhouse gases is causing global temperatures to rise. The common view is that the temperature rise may indicates a bad or even disastrous consequence. The third market force is the cost of new energy. The cost has been declining for decades, and should continue to decline for some new energy. Emerging energy cost decline can be attributed to improvements in emerging energy technology. As the industry becomes mature, the cost will continue to decline.
2. The Nasdaq index of new energy ranked first and currently had a large number of investment in emerging energy companies and projects. According to Price water house Coopers (PWC), Thompson Venture Economics and the American Venture Capital Association, the investment growth on the new energy company's of venture investors in recent three years exceeded 30%, more than other sectors. In the emerging industry benchmark Nasdaq market, the new energy index the past two years has been ranked first. Large companies in many industries have begun to notice the growing market opportunity, and support. For example, the General Electric Company in California recently invests 51 million dollars for a 50-megawatt wind power project. CascadeInvestmentLLC has invested 84 million dollars on PacifiCorp for its production and sale of renewable fuels. The accelerating market growth has created a favorable environment full of substantial profits opportunities and risk for the industry investors. Emerging energy is widely taking from the natural energy available. Although the emerging energy is not panacea, the more we use, the more we benefit, including the reduction of oil imports, pollution abatement and greenhouse gas emission and increasing job opportunities. The Emerging energy can provide significant opportunities for developing countries and rural areas, and its potential is enormous. It will provide energy security, a cleaner environment, good jobs and investment opportunities. The rural areas can get the most benefit from the new energy development, which will also allow people in the rural areas around the world to have access to modern energy. Wind power, solar power, geothermal heat, biomass and small hydropower stations can supply electricity to rural utilities and villages. Solar cells and solar water heaters can bring modern energy to homes.
3. The new energy development prospects are generally optimistic in the United States and around the world, and keep accelerating. US official prediction indicates that by 2030 emerging energy accounted for only about 10 percent of US energy supply, but many industry organizations are much more optimistic than the US government. Alliance for the Future World Energy predicts that by 2025, new energy supply will climb up to 25%, by 2020, 2030, 2040 the supply will be respectively 20%, 30%, 40%.
Some experts pointed out that to achieve these goals, conventional energy prices must continue to stay high, rising energy costs must continue to decline, and government policies must be stable and predictable to encourage lending institutions and investors to invest in emerging energy systems. In addition, international cooperation to transfer technology to developing countries is needed.
4. The innovative business models to reduce the financial risk at present, many of these risks in the market didn’t get well understood or adequately controlled. Consequently, many mainstream finance providers feel unable to abandon the traditional investment projects and support emerging energy technology. These financiers often mistakenly believe that emerging energy financing belongs to the social welfare activities, which is inconsistent with its fiduciary duty to seek the best risk-reward combinations.
But in recent years, a variety of alternative investment vehicles for the emerging energy industry makes venture capital industry investment level on the broader clean technology category increase significantly. Venture capital firms currently put 10% of the annual total investment amount into clean technology. Such as SunEdisonLLC and other companies, currently takes service fee model - providing the initial capital for the solar project, and then charging a monthly fee from customers. The sudden rise of business innovation and other trends - unprecedented fossil fuel prices fluctuations, technology upgrading, power market regulatory reform, and deepening environmental concerns - combine together to make investing in sustainable energy increasingly attractive.
Currently, the vast majority of programs still need regulatory and third-party involvement, this key participant of public-private partnership to be in developing countries and transition economies, including the World Bank and its financing arm, the International Finance Corporation and other multilateral organizations, such as the US Export-Import Bank and other bilateral organizations, as well as unilateral national plan. In the United States, Canada, Asia and Europe, many governments are borrowing from the tax subsidies, direct and indirect financial support and market mechanisms to reduce the risks.
5. Governments pushes new energy in the United States, Canada, Asia and Europe. Many governments are borrowing from the tax subsidies, direct and indirect financial support and market mechanisms to reduce the risks. Some important examples include: Indian Renewable Energy Development Agency provided financial support for solar energy projects; Asian Alternative Energy Program of the World Bank has invested more than 1.3 billion US dollars in a number of sustainable energy programs; US investment tax credits and production tax credits, that is to reduce unit costs of sustainable energy production by providing capital and operating costs, or tax credits; Carbon Fund, an independent company established invested by the British government, designed to help the UK towards a low carbon economy; Sustainable Development Canada Technology Fund, a multimillion-dollar fund set up by the Canadian government to promote the development and demonstration of clean technology.