The renewable energy sector is an increasingly important arena for deal-making as companies and investors respond to the growing role of renewable sources in meeting global energy demands and the challenge of climate change. Strong mergers and acquisitions (M&A) growth in the wind and solar power sector is adding to renewable energy deal momentum.
Security of supply, energy diversification, technological breakthroughs and climate change regulations all play a part in driving the growth of the sector. According to PricewaterhouseCoopers? Renewables Deals 2008 Annual Review report, Asia Pacific’s year on year renewables deal activity increased, with deal numbers rising 21% from 53 in 2007 to 64 in 2008. India has recorded total renewable deals of $134 million in 2008, which is about 7.3% of total Asia Pacific renewable deals, and it stands third, behind China and Australia.
During 2007 and 2008, 441 renewables deals were announced with reported value totalling $70.3bn. Wind power continues to be the principal focus of deal activity, accounting for the majority of the value (57%) of all renewable energy deal making in 2008. Indeed, in 2008, solar overtook hydro as the second largest renewables deal category after wind, accounting for 20% of the total renewables deal value.
The report said a quarter of deals in the power sector are for renewable assets or technology.Renewable energy now accounts for one tenth of M&A value in the wider power sector. Solar deals quadrupled in number and more than quadruped in total value in 2008 over the previous year. Average solar deal size also rose from $76.7 million in 2007 to $89.3 million in 2008.