Recessionary economies naturally encourage investors to put their money in safe investments such as bonds or cash management funds.  Recently, however, European investors have  been returning to cleantech stocks.  Those promoting energy efficiency and biofuels production currently have the most potential.

As governments enact new energy policies that restrict carbon emissions and set stringent goals for their reduction, innovative businesses are taking advantage of government-provided subsidies to develop technology that generates energy from wind, waves, and even waste products.

“What are the game changing possibilities?” asks Bruce Jenkyn-Jones, Managing Director of listed equity funds at Impax.  Impax specialises in environmentally-responsible

investments.  The firm says money has started coming in once again and has been since the beginning of the second quarter.

Khosla Ventures, a venture capitalist firm based in the US, raised more than $1 billion this week in a cleantech fundraising campaign.  It was the largest fundraising for a  venture capitalist within the sector since 2007.  Analyst Jean-Marc Bunce says the trick for successful investors is to determine what companies are about to market their technologies and which may never be commercialised.   “They will be increasingly polarized between the ones who are delivering in terms of commercial rollout and in terms of revenue and cash generation, and those will be

increasingly in favour,” said Bunce.  “And then we will continue to see a fall out of those that have not delivered in terms of technology.” Bunce believes Ceres Power and Ceramic Fuel Cells, both fuel-cell manufacturers, will continue to do well.  Shares in both companies have more than doubled in value this year.

Shares in BGlobal, a smart meter manufacturer, have also doubled this year.  Companies that make products that easily improve energy efficiency in homes and businesses are becoming more popular.

“I think that most of technology that will likely come to commercialisation will be energy efficiency technology, rather than power generation technology,” said analyst David  Cunningham.

There are technologies that can completely transform how power is generated.  These types of discoveries can change the dynamics of the entire market.  Generating power from  waves and tides is a possibility for the future.  For the short term, however, investing in hydroelectric power is probably safer.

Cunningham said tidal energy won’t become widely available for at least another decade even though the technology shows tremendous promise for voluminous clean energy.  

Generating power from the seas is still very expensive. “Fund managers and investors should be investing in traditional businesses that have proven reliable sources of power generation, not in R&D shops that may never get out of the laboratory,” said Cunningham.

Biofuels are starting to make an impact, however.  Danish company Novozymes has developed enzymes that convert foodstuffs into bio ethanol.  Similarly, an American company called Ensyn is turning wood waste into an oil-like product.

Generating energy from household waste also has a lot of potential.  Viridor, a subsidiary of water company Pennon, is entering this market. “Waste is a much lower-cost source of energy than wind,” said Viridor CEO Colin Drummond.  He believes that waste could provide 6 percent of the UK’s energy needs by the year  2020.

Impax
30831 Huntwood Avenue
Hayward, CA 94544
http://www.impaxlabs.com

Khosla Ventures
3000 Sand Hill Road
Building 3, Suite 170
Menlo Park, CA 94025
http://www.khoslaventures.com

Ceres Power
Unit 18 Denvale Trade Park
Haslett Avenue East
Denvale Trade Park
Crawley RH10 1SS
http://www.cerespower.com

Ceramic Fuel Cells Limited
170 Browns Road
Noble Park, Victoria 3174
Australia
http://www.cfcl.com.au

BGlobal plc
Arkwright House,
2 Arkwright Court
Commercial Road
Darwen
Lancashire, BB3 0FG
http://www.bglobalplc.com

Novozymes A/S
Krogshoejvej 36
2880 Bagsvaerd
Denmark
http://www.novozymes.com

Ensyn Corporation
400 West 9th Street
Wilmington, DE 19801
http://www.ensyn.com

Pennon Group
Peninsula House
Rydon Lane
Exeter
Devon EX2 7HR
http://www.pennon-group.co.uk

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