This means that rather than risking your money on one particular technology, you can hedge your bets on the performance of the entire index, making you less vulnerable to sudden shifts in the market. There are a growing number of exchange-traded funds (ETFs) that track various alternative energy indices. So what are the best opportunities for the canny investor keen to cash in on alternative energy? Walter Nasdeo, Managing Director of Ardour Capital Investments, which produces the Ardour Global Alternative Energy Index, recommends spreading your risk in some kind of alternative energy "basket." Principal Voices: Expert views on biofuels.Prominent venture capitalist John Doerr, who has previously funded the likes of Google, Amazon and Sun Microsystems, recently told the MIT Energy Conference that he believes we are at the beginning of a green-tech boom - and with backers of his pedigree on board, he may be right. Private equity and venture capital investors pumped $5.8 billion into the sector in the second quarter of 2008, up 66% on the same period last year, according to NEF.
While banks have had the jitters over the credit-worthiness of borrowers, clean energy firms have needed to look elsewhere to raise capital, but it seems that there has been no shortage of backers. And there have been encouraging signs, with the NEX picking up by 6.2% in the second quarter of 2008.
Hydrogen cell shares have also suffered.īut Eric Prideaux, Associate Editor at NEF, told CNN that growing policy support to reduce emissions, rising energy costs and increased competition for energy sources mean that clean energy will weather the storm better than other sectors. biofuel firms VeraSun and Aventine Renewable Energy are down 61% and 52% respectively on last year. Worst hit has been the biofuels sector, which has been blamed for global food shortages and had its profits squeezed by high corn prices. The first quarter of 2008 saw the Wilderhill New Energy Global Innovation Index (NEX), which lists clean energy firms, tumble by 17.9%, nearly twice the loss suffered by the S&P500. 2007 was a boom year with the alternative energy attracting $148 billion of new funding, up 60% on 2006, according to UK-based consultant New Energy Finance (NEF).īut since then the credit crunch has rattled the clean energy sector.
The fundamental need for these kinds of technologies has meant that the clean energy sector has been one of the financial success stories of recent years. Governments around the world have set ambitious targets to cut CO 2 emissions, but it's clear that if they are to meet those targets they will have to rely on the growth of alternative energy and the development of new technologies that promote energy efficiency.
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