Global cleantech industry grows by value and size, despite challenging market conditions
- Number of cleantech companies, globally, grows despite bankruptcies and consolidation
- Market capitalization bounces back, boosted by energy efficiency companies and renewables
- Asia-Pacific region emerges as the growth driver, with China leading headcount growth
- The newly adopted legislation gives a hope for development of the Russian domestic cleantech market
LONDON, MOSCOW, 15 AUGUST 2013: Despite challenging market conditions, the key indicators of population and financial performance of public pure-play (PPP) cleantech companies show signs of improvement according to EY’s annual Cleantech industry performance 2013 report, released today.
Commenting on the activity in the sector, Gil Forer, EY’s Global Cleantech Leader says:
“We’ve seen a notable upturn in the performance of the 424 public pure-play cleantech companies globally. Despite a challenging period of consolidation in certain cleantech segments, fiscal issues in some countries and the continuing impact of the financial crisis; we’ve seen an annual gain of 18% in market capitalization (US$170b), and 12% increase in headcount (512,500). Growth in the Asia-Pacific region was a major factor in these increases.”
Asia-Pacific increases company count lead
Globally, the cleantech sector saw the creation of 68 new PPP companies and lost 63 companies in 2012. The Asia-Pacific region was the main winner, increasing 16% to 177 companies, while the company population in Europe, Middle East and Africa (EMEA) contracted by 8% to 135 companies. The US and China remain the leading countries in terms of PPP companies, with 70 and 64, respectively.
New legislation to provide an impetus to cleantech market in Russia
Russia’s cleantech market remains nascent, but recent policy developments may provide momentum to the market.
Commenting on the recent policy changes in the sector, Ksenia Leschinskaya, Head of EY’s Cleantech and Sustainability Services in the CIS says:
“New legislation (“Regulation 449”) in renewable energy (RE) sector proposes a mechanism to promote RE in whole sale power market through capacity payment system. The mechanism covers solar, wind and small-scale (less than 25 MW) hydroelectric projects, and with a minimal project capacity of 5 MW. Moreover, an obligation for usage of locally manufactured RE equipments/technologies in RE projects has also been introduced. It provides the degree of localization for each RE technology with gradual increase of the degree of localization from 2014 to 2016 for wind and solar project and from 2014 to 2018 for small-scale hydroelectric projects. This policy measure may provide impetus to Russian cleantech industry for setting up large-scale manufacturing facilities. However, this may also put additional cost burden on investors and project-developers in the absence of well established supply chain, in particular domestic technology-providers.”
Energy efficiency surge; renewables recover
The corporate focus on energy efficiency continues to boost the segment, with the number of energy efficiency products companies jumping 14% to 50, and market capitalization increasing 25% to US34.6$b.
The renewable energy sector showed important signs of recovery as generation companies showed across the board gains, benefitting from lower equipment costs. The number of companies increased 14% to 32, market capitalization increased 8% to US$25.5b and revenues increased 23% to US$11.1b.
While the number of wind equipment companies fell by 2% to 53, market capitalization increased by 2% to US$30.8b and revenues increased 14% to US$35.3b. The picture for solar is more mixed, with the number of solar equipment companies falling by 2% but market capitalization up 14% to US$28.8b; however, solar revenues declined by 16% to US$42.5b.
Biofuels also experienced significant growth in 2012 as the number of companies in the segment increased 8% to 41, market capitalization shot up 25% to US$13.1b and revenues grew 14% to US$26.0b.
Growing number of jobs in cleantech
The global headcount of public cleantech companies stands at 512,500, up 12% from last year. China, with over half the global headcount, was the source of this growth, led by additions in the solar and wind segments globally.
Forer concludes: “The cleantech sector globally has shifted to growth. Resource scarcity, energy security concerns, population growth and increasing consumption, by expanding middle classes in emerging markets, will continue to drive this cleantech market growth. China is consolidating its position as the most important cleantech market and is poised to overtake the US as the number one center for public cleantech companies.”
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