Will Green Enterprises Survive the Economic Crisis?
Source: TIME (1/22/09)
"The current financial crisis has absolutely no impact on our planned projects. . .Our appetite is still the same."
However, the global economic downturn has hardly left the alternative energy sector untouched. Developers say that financing for new wind farms and solar plants remains all but frozen, halting tentative plans in the U.S. and Europe to expand clean power. The WilderHill New Energy Index—a fund that tracks the stock performance of selected clean tech companies—is down more than 60% since its peak in November of 2007, slammed by the double blow of the loss of venture capital and the reduced urgency for energy alternatives as the price of oil has tumbled. "We just can't get financing," says Marcel Brenninkmeijer, chairman of Good Energies, a global clean tech investment fund.
So will low-carbon enterprises be abandoned as capital floods to safer, established industries and the heat goes off global warming? Or is it, as Brenninkmeijer still insists, "the business of the century"? Signs from Abu Dhabi suggest both. The short-term outlook for renewables is as grim as it is for other capital-intensive industries, if not more so.
But despite short-term forecasts, the general mood in Abu Dhabi was as sunny as the weather. That's because in the long term, developers of renewables know they'll win. Climate change aside, the simple fact that energy demand will continue growing rapidly once the downturn has ended means that new supplies will be needed. "By 2015 we'll be talking about energy in a very different way," says Vinod Khosla, the veteran Silicon Valley venture capitalist. "Smart entrepreneurs are poised to thrive."