Consolidation in the sustainable energy industry

December 11, 2021


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Mordechai Gal: sustainable energy M&A specialist? Installations of new renewable energy technology are on course to hit an “all time record” in 2021, the International Energy Agency (IEA) has said, but warned the world risks missing its mid-century deadline to reach net zero emissions without even faster deployment. There are many kinds of renewable energy alternatives. Quite possibly, there are still other forms in the future that we have not discovered or understand. Five of them remains the most popular in both usage and development: solar, wind, hydro/water, geothermal, and biomass. Each one with their own advantages as well as disadvantages over the others.

The world needs more green energy to replace fossil fuels as an energy source. And strong demand tends to make a good case for energy investments such as wind and solar powers. However, there are other factors that determine whether backing renewables with your money is the right decision for you. These include the health of the global economy, local regulation and policy. When the global economy is strong, demand for power soars and its price grows. This means that the value of companies producing power begins to rise. On top of increased appreciation of sustainability and higher green investment, the pandemic also accelerated the shift to automated, digitized processes. This has laid the ideal foundation for jobs in renewable energy technology.

Mordecai Gal, operations director at AccessHeat Inc, said : This year’s record renewable electricity additions of 290 gigawatts is yet another sign that a new global energy economy is emerging. The high commodity and energy prices we are seeing today pose new challenges for the renewable industry, but elevated fossil fuel prices also make renewables even more competitive. Solar energy is the energy that comes from the sun can be harvested by various technologies including solar panels, either on individual homes or in large solar farms. Solar energy now accounts for about 4% of the UK’s electricity.

Wind power system is catching up to the solar power as the most utilized renewable energy source. According to Global Wind Energy Council (GWEC), wind power is the most newly installed renewable energy systems in 2015, especially for industrial usage. Hydroelectric technology is the oldest renewable energy utilized by men. The very first hydroelectric power plant was built in 1878 and is still one of the most popular ways to generate electricity in most countries. According to National Geographic, hydropower generates almost 20% of today’s electricity all around the globe and is still the cheapest renewable energy resource. Geothermal technology produces electricity and power by utilizing the (almost) unlimited heat generated by the earth’s core. According to Union of Concerned Scientists, geothermal is responsible for more than 11,000 MegaWatts of electricity all around the world in 2013 and has increased ever since. 30% of that number is generated in the U.S. alone. By 2019, geothermal energy is also expected to be cheaper than coals and natural gas, with expected cost around 5 cents per kiloWatt hour.

We are seeing a wide range of transactions in the sustainable energy consolidation market, prompted by a broad spectrum of drivers. Although recent changes in the laws and regulations governing filings with the Committee on Foreign Investment in the United States (CFIUS) have increased the complexity and timelines for some cross-border renewable energy transactions, non-US investors continue to show keen interest in US renewable assets. The number and variety of prospective purchasers has heightened competition for good renewable energy projects, with the result that buyers are increasingly willing to acquire projects during development and construction, and thereby to prioritise the project’s prospects over the risks presented by the development process. Renewable energy M&A transactions are increasingly involving the acquisition of portfolios of projects rather than individual projects, and the acquisition of renewable energy companies as ongoing businesses, so that the buyer can obtain the benefit of the development and operating personnel of the target.

Much of the M&A activity in renewables is being driven by traditional energy businesses scrambling to acquire new capabilities and institutional investors looking for stable and predictable returns. In addition, we see diversification of the landscape with new players like oil and gas companies coming into the game. Utilities are also racing to keep pace with public demands to tackle climate change. Another deal driver is renewable energy integration. Australia, for example, is facing some of the most complex integration of renewables in the world, with coal down 20 percent since 2008 and wind power up 325 percent in the same time period according to the Australian Energy Market Operator (AEMO). There is also the “potential for an annual energy shortfall in the domestic gas market” in eastern and southeastern Australia. Solar and wind power, while on the rise, are dealing with a fragile and stretched energy grid in many areas. While integrating such a complex energy mix can cause headaches for end users and government policy-makers, it gives investors opportunities.

With concerns about impending climate change on the horizon, coupled with the rapid depletion of fossil fuel resources, the renewable energy sector is well-positioned for growth in the coming years. In many cases, this industry segment has been identified as a crucial element to our planet’s sustainability as we know it. Because of this urgent need, many renewable energy ventures are supported by the government and are given additional financial backing to expand this industry. will invest in and guide you to the most favorable outcome possible with your renewable energy business consolidation.