Green sources open field to many entrants

By Fiona Harvey, Environment Correspondent
Published: September 16 2008 03:00

Investment in environmentally sound sources of energy has risen nearly five-fold in the past four years, according to analysis by New Energy Finance, the consultancy. In 2004, investment in the sector stood at just over $33bn. Last year, it was more than $148bn.
The massive scale of investment has thrown up huge opportunities for entrepreneurs and a bewildering variety of new companies has sprung up, many startlingly unfamiliar to those in traditional energy businesses.
Waste, for instance, is not usually thought of in this context. But the search for alternative energies has thrown the spotlight on waste-to-energy companies.
Advanced Plasma Power is one. It claims to be the only UK company using gas plasma technology to convert municipal waste to energy. The company's technology is capable of taking standard "black bag" household waste to generate energy, sending less than 1 per cent back to landfill. This gives the process some of the lowest emissions of any energy technology, lower than waste incineration. The company will announce its first full-scale plant this year.
Interest in clean energy has also led some long-established companies to reinvent themselves - and waste drew NTR, an Irish company, far from its roots as a toll road operator into energy-from-waste and wind energy.
NTR, founded in 1978, entered the waste management market in 1999 before moving into landfill gas, a source of "green" energy. At around the same time, the company also made its big leap into the renewable energy market with an investment of €3.9m in Future Wind Holdings, later to become Airtricity, with wind farms in Ireland, the UK, Germany and the US. Investments in ethanol and biodiesel followed.
NTR has since sold Airtricity but remains focused on green energy. It re-entered the wind business in the US this year with an investment of $150m in Wind Capital Group, and branched out into solar, announcing plans to buy a stake in Stirling Energy Systems of the US.
Stirling is one of a clutch of new "solar thermal energy generation" (STEG) companies. This technology, also known as concentrated solar power, uses large arrays of mirrors to focus the sun's rays on a power conversion unit. This can be water, which is heated to steam to drive a turbine. In the case of Stirling, the unit is instead filled with hydrogen which, when heated, expands to drive the pistons of a Stirling engine, generating electricity.
Most solar thermal generation companies are in the US, but Solel is a start-up from Israel. The company announced a partnership with Iberdrola of Spain and plans for a $140m solar thermal energy generation manufacturing plant in Spain.
Jim Barry, chief executive of NTR, says the move to green energy has been reinvigorating. "I am more and more convinced of the growth opportunities from green energy," he says.
Whereas traditional energy companies focused firmly on selling as much of their product as possible, the need to reduce emissions has stimulated a wave of companies specialising in using as little energy as possible.
From New Zealand comes Wellington Drive Technologies, an electric motor company specialising in energy efficiency. The company's motors can be used in air-conditioning, fridges, driers and other white goods.
Moixa, the UK-based brainchild of entrepreneur Simon Daniel, produces the USBcell, a rechargeable battery that gets its power by connecting to the USB ports on computers.
Mr Daniel says that people prefer the convenience of single-use alkaline cells. He says USBcell addresses that by providing a more convenient way of recharging, which will put paid to the waste of at least some of the 15bn alkaline batteries that are thrown away each year. The company scooped top prize in the Barclays green leaders in business awards in September.
Though most of the investment in green energy to date has been in the developed world, rapidly industrialising countries such as China and India are catching up fast.
The Chinese solar panel maker SunTech, for instance, raised nearly $400m when it floated in the US in December 2005.
And India's Suzlon Energy, a wind turbine maker, surprised many when it won a takeover battle for the Belgian Hansen Transmissions in 2006. China and India are likely to produce many more clean energy companies in the coming years.
Copyright The Financial Times Limited 2008