Distributed to Participants on the evening of 29 February 2008
SUMMIT DAY TWO: SPEAKERS TELL OF A RISE IN SERIES D ROUNDS AND A LIKELY US BOOST FOR THE WORLD CARBON MARKET

Crunching the numbers for renewables

On Day Two of the inaugural New Energy Finance Summit, panellists and delegates again put under the microscope the opportunities and challenges facing renewables, low-carbon energy, and the carbon markets.

During a high powered panel on equity finance, representatives from Credit Suisse, Emerald Technology Ventures, Jefferies International, the Virgin Green Fund and Citi mulled over the current investment environment.  The general consensus: now is not an easy time to go public for clean energy companies.

But there was disagreement about how much this might hamper renewables. Those on the private equity side of the aisle argued they had plenty of capital and flexibility to offer companies looking for a Round D or later funding.  But one investment banker on the panel said that despite the downturn, he could still take the right companies with the right management and technologies public.

Next up was a discussion among key policy makers and others heavily involved in the carbon markets.  Among other things, the panellists suggested that if and when a true global carbon trading market is established (including India, China and the US), it could be larger than the current global oil market.  There was also talk of Europe taking the lead in establishing an institution that would oversee that global market. The representative of a utility on the panel noted that his company is already making strategic decisions based on the assumption of a carbon penalty 30 years out – even in the US, which currently has no national cap-and-trade scheme.

QUOTES FROM DAY TWO OF THE NEW ENERGY FINANCE SUMMIT
 

“I will tell you that the smart money absolutely anticipates a change in the regulatory environment in the US. We will see consistent policy that will support investment.”

“Barriers include regulatory intermittency, supply bottlenecks, a lack of funds for early stage investing in pre-commercial technologies such as marine, and for heavily capital intensive projects such as CCS and coal gasification.”

“The lobbying resources of old energy against that of the renewable sector – the contrast is breath-taking.”

“At the Indianapolis 500, you get a funny smell – the cars run on ethanol so they are burning sugar as they go round the track.”

 “There is criticism of London bankers for making money with emission reductions in China. It is amazing to think that anyone thinks it wrong a) to make money, or b) to do it in China.”

“I think we have greatly exaggerated the faults and insufficiently celebrated the successes of CDM.”

“2007 was 2000 and 1997 combined.”

“When [Lord Browne] made his famous speech in the run-up to Kyoto, he did something profoundly good for the world.”

On CCS, “we need rules about who owns the carbon over its lifetime…..and people need to make sure that communities are prepared to accept what is going on. I believe this will be done.”

“Right now, no one has appeared on the horizon who can be called a renewable energy major.”

“I’m not going to answer the question directly because I do think I can, and if I could, I shouldn’t.”

“Renewable energy is either related to the sun, or to the moon.”

“With cleantech, you have to peel the onion and look at the multiples and fundamentals in each sector.”

 “We won’t invest in A and B rounds, but there is more opportunity in D rounds because the IPO market is shutting even for high quality companies.”

“Each of us needs to wear a pair of lead shoes.”

LEAGUE TABLE PRIZE WINNERS TAKE A BOW

Here are the winners of the 2007 clean energy investment League Tables. Congratulations!

Public Market Deals, Lead Manager: Credit Suisse.

Public Market Deals, Lead Advisor to Underwriter: Allen & Overy.

Public Market Deals, Legal Advisor to Issuer: Linklaters.

Mergers & Acquisitions, Financial Advisor to Target: Goldman Sachs.

Mergers & Acquisitions, Financial Advisor to Acquirer: Citi.

Mergers & Acquisitions, Legal Advisor to Target: Allen & Overy.

Mergers & Acqusitions, Legal Advisor to Acquirer: Clifford Chance.

Project Finance, Mandated Lead Arranger: HSH Nordbank.

Project Finance, Legal Advisor to Arranger: Milbank Tweed Hadley & McCloy.

Carbon Off-Taker (by number of deals): EcoSecurities.

Carbon Off-Taker (by number of contracted credits): Natsource.

Legal Advisor to CDM/JI (by number of deals): Baker & McKenzie.

Distributed to participants on the evening of 29 February 2008

INVESTMENT IN CLEAN POWER SURGES IN 2007 BUT COMPETITION LIES AHEAD FROM OTHER ENERGY SOURCES

The many challenges facing clean energy dominated a lively first day at the inaugural New Energy Finance Summit in London yesterday.

A packed room of 150 international delegates heard New Energy Finance CEO Michael Liebreich lifting the lid on his company’s latest estimates for investment in clean energy in 2007. A spurt of deals and project announcements late last year and other transactions coming to light have prompted Liebreich and his team to lift their overall figure for new investment in 2007 to $148.4bn, up a thumping 60% on 2006.

The first discussion session centred on the future for clean energy, and saw delegates debate the challenges that could threaten the sector’s ongoing growth. Among those highlighted were fragmentation in carbon pricing and renewable energy policy around the world; competition from other energies including nuclear and “clean coal”; and bottlenecks in everything from senior executive talent to wind turbine hardware. One table remarked that it used to be the case that clean energy firms poached talent from the oil industry, now the oil firms were so well off that they were poaching back.

Next up was a lively debate on the merits of rival energies – such as “new nuclear” and coal to gas with carbon capture, and a focus on the huge but slippery prize of energy efficiency for traditional energy players. “Advanced energy efficiency, advanced thermal efficiency and new forms of heat generation” were trumpeted as among the most exciting opportunities for the next few years.

Some delegates in the hall were frank in what they saw as the options for traditional energy firms: “rebranding as a new energy company, buying or growing a clean energy business, or partnering with a clean energy player”.
Session three saw a spirited discussion of renewable policy in California, Pennsylvania, China, United Arab Emirates and Europe. The policy-makers were upbeat and committed, one saying: “We are in the full swing of the development of renewable energy and the business is tremendous.”
It was striking on Day One that while financiers and industrialists displayed signs of uncertainty over issues such as project valuations, the policy outlook and the threat from other energies, it was the policy-makers that stole the show for optimism about the future of clean energy and the fight to curb carbon dioxide emissions.

QUOTES FROM DAY ONE OF THE NEW ENERGY FINANCE SUMMIT
 

“Consumers have zero tolerance for hiccups. Clean energy has to be indistinguishable from old style energy – really reliable.”

“There will be some kind of convergence, no doubt about that, mainly because the means of distribution are in the hands of the oil firms.”

“Eliminate subsidies on oil. Throw those out first and put us all on the same playing field.”

“The UK is a leading member of the European Union but it is not a leading member in developing renewable energy in the EU. You come almost last.”

“We are certainly not going to build more nukes than we have now.”

“In the future, everything you can coat, you will coat with solar.”

   
“We do not have a problem with the intermittency of renewable energy. We have a problem with the intermittency of the PTC and the ITC.”

“Our policy for renewable energy is a combination. We learn something from Germany on feed-in tariffs, and from Spain on portfolio standards.”

“We can’t talk about policy, because we have not got that yet.”

“There are certain sectors that look almost like a bubble. There will be a rearrangement, because things move very fast.”

“Germany has solved the grid problem by doing so at a national grid level - this has not happened elsewhere in the world.”

“Three mile island was not an accident.  It was a success.”

We are now only days away from finalising our 2007 Clean Energy League Tables, and have been positively surprised by the overwhelming response from investors, banks and law firms alike.  

Having overseen various league tables for a few years running, I have never witnessed such global mobilisation of internal communications and operations in order to make 100% sure that every deal from every part of the world is accounted for. Deals were confirmed by Public Relations, MD’s, and CEO’s alike - one organisation even submitted their deals 3 times!

Combined with unprecedented levels of clean energy investment witnessed during 2007, we are looking at sharing with you the most insightful and complete league tables to date, and of course awarding the winners of each category for their leading performances.

See you at the Gala event!

Tobias Troye
League Product Manager, New Energy Finance

The pace is now accelerating as we approach the New Energy Finance Summit at the end of February. I feel a sense of anticipation, and as a company, we're ramping up our preparations with every day that passes.

The event, which will bring together the clean energy sector's big hitters and opinion formers, could hardly be happening at a more fascinating moment. The clean energy cause is advancing, and the fundamentals point to even heavier investment in renewable power and efficiency in the years ahead. At the same time, the world economy - and the financial markets - are shuddering, and the US is in the throes of a Presidential election campaign that will influence hugely the degree of priority that country gives to the fight against climate change.

Another very lively area just now concerns the priorities in clean energy. What sort of renewable energy? What type of biofuel and what sort of regulation of the biofuel industry? How best to curb emissions from the new coal fired plant being built in developing countries? What role for nuclear? What financing mechanisms will we need for encouraging energy efficiency and microgeneration by businesses and consumers? These are fascinating questions, and I look forward to hearing your views at the Summit!

Angus McCrone
Chief Editor, New Energy Finance

Time passes so quickly when you're having fun!  Here in London, we have been working feverishly here at New Energy Finance over the last few months, opening new offices (California, China, Middle East), watching exploding markets (record IPOs, record investment levels, record oil prices), and working to launch our very first New Energy Finance Summit. 

Thanks to the wonderful support of our Thought Leaders in creating a great program, and of the market in contributing the data for our New Energy Finance Awards, we are looking forward to a wonderful couple of days at the end of February - over leap year in fact!

We hope that you will be able to join us on this wonderful journey in London on February 28 and 29th.   Please register and apply for one of the few public seats at the Summit TODAY!  Places are strictly limited. 

If you're a client of New Energy Finance, contact your relationship officer today. You may be eligible for a significant client discount. 

Cheers!

Susan Kish, Executive Producer