Global renewable energy Q1 M&As at $21.7 bn: E&Y

The M&A activity increased despite difficult economic conditions, largely because of consolidation, according to E&Y's latest quarterly report on global renewable energy country attractiveness indices.

The first quarter of this year saw USD 21.7 billion worth of renewable energy transactions being completed a rise of 41 per cent over the last quarter of 2011 and going forward it is likely to rise further.

"The next 12 months are likely to be characterised by further consolidation in the solar and wind supply chain, with a large number of outbound deals expected from Asia," E&Y Energy and Environmental Finance Leader Ben Warren said.

Around 38 per cent of respondents expect energy costs to rise by 15 per cent or more in the next five years, which would lead to increased usage of renewable energy, the report said.

While reducing energy costs is often the foremost objective of an energy strategy, a number of other goals are also driving the renewable energy theme such as energy security, carbon reduction, price stability; regulatory compliance and reputational aspects.

Meanwhile, following a record year in 2011, investment flows in clean energy during Q1 2012 were the weakest since 2009.

Financing of new projects witnessed a sharp dip as just USD 24.2 billion was raised in the first quarter of this year, a 30 per cent decline

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