Public clean-tech firms get clobbered

Amid the carnage of last year's stock-market performance, shares in clean-energy firms fared worse than others, according to data published Wednesday by researcher New Energy Finance.

That dramatic decline--at one point going below 2003 levels--was despite some of the most advantageous political and economic factors for clean technologies in years.

At its low point in November, the WilderHill New Energy Global Innovation Index (the ticker is "NEX"), which tracks 88 clean-energy global stocks, fell over 70 percent. The index then enjoyed an "Obama bounce" after the presidential election, to end up at a 61 percent decline in 2008.

For comparison, the S&P 500 index fell 38.5 percent last year and the U.S. Nasdaq Composite was down 41 percent.

The downbeat news from the public markets comes on the heels of the year-end data about clean-tech venture capital, which saw funding peak in the third quarter of 2008 and then finished the year sliding down.

Among public companies, the two hottest--and some argue overinflated--sectors within clean tech battered the worst were solar and biofuels. On average, solar shares plummeted 75 percent; biofuels and the biomass sector plunged 68 percentl; and wind fell 56 percent.

The poor performance reflects the fact that the energy business is very capital intensive and sensitive to fluctuations in fuel and commodity prices.

The price of oil plummeted from over $140 a barrel in July to under $40 in December. Meanwhile, the credit crisis made financing harder for projects such as wind farms or manufacturing plants.

The overall clean-energy sector, which has been exploding over the past three years, was also due for a correction, New Energy Finance CEO Michael Liebreich said in a statement.

Yet the demand for clean-energy products and services is still strong, making the long-term outlook good, he argued.

"Worries about climate change and energy security are still on the political agenda, and indeed the latter issue has become even more topical with the dispute over gas supplies between Russia and Ukraine and the conflict in Gaza. And Obama is not the only leader seeing clean energy as an important element in the programs they are planning, to help stimulate economic activity," Liebreich said.

Meanwhile, the level of venture funding in 2009 could potentially drop after three years of rapid growth, said Brian Fan, senior director of research at the Cleantech Group.

Still, he said, the "fundamental drivers" of energy scarcity amid growing demand and of climate change policies are intact, which should attract more investors.

[nicmart]

As always, there is the government teat for them to suck when the market rejects them.

[freemarket--2008]

Another issue for public companies is rapid technology change. New tech is getting more funding - http://news.cnet.com/8301-11128_3-10132411-54.html?subj=news&tag=2547-1_3-0-20&part=sphere
so they may not have much time to establish a market.

[fdunn3]

This is the same short sightedness, quick return on investment that got the U.S. addicted and dependent on foreign oil.

The VC's don't want to invest in alternate fuels now because the price of crude is down right now.

It's a vicious cycle and the winners (take-all) will be those that invest in alternate energy for the long haul, not just because the quaterly numbers don't look good.

When the hell is the U.S. going to take alternate energy seriously?

[javsewpc]

"When the hell is the U.S. going to take alternate energy seriously?" is a great question.

An answer that should be considered is in the electricity without price control (EWPC) article "The End of the Vicious Pervasive Fossil Fuels is Near (please hit the hyperlink http://www.energyblogs.com/ewpc/index.cfm/2009/1/7/The-End-of-the-Vicious-Pervasive-Fossil-Fuels-is-Near ), whose summary says: "Synchronicity of the emerging whole of the digital era virtuous pervasiveness, that will spread the clean energy revolution, is in the hands of the Obama administration." An EWPC EPAct is the key to the systemic leverage to eliminate most of the regulatory uncertainty.

That answer is in line with the following news excerpt by Amy Fischbach September 30th, 2008.

Sept. 29, 2008, WASHINGTON, D.C. ? The U.S. electricity sector will play a major role in any national greenhouse gas mitigation plan enacted by Congress, but prolonged regulatory uncertainty threatens the industry?s ability to efficiently meet this impending challenge, Paul Joskow, respected Massachusetts Institute of Technology economist and president of the Alfred P. Sloan Foundation, said in an address Friday at the National Press Club in Washington, D.C.

?The absence of a comprehensive national electricity policy makes (enacting a) national greenhouse gas policy more difficult,? Joskow said, noting that ?significant investment? will be required to address climate change. ?It?s very hard to make investment decisions when you don?t know the cost of carbon dioxide or the regulatory structure going forward.?

?Without a national policy, progress is not likely,? Joskow warned in his keynote address at ?Powering the Future: Key Energy Issues for the Next Administration,? a daylong forum at the National Press Club sponsored by the Technology Policy Institute.