KPMG News
Powering Ahead: 2010 - an outlook for renewable energy M&A
This report is KPMG’s annual review of M&A activity within the renewable energy sector; it takes a look at the changes and trends in the sector to provide insight on where the market is heading.
Although 2009 remained challenging for the renewable energy sector finally this year there appears to be light at the end of the tunnel. The first few months of 2010 have seen the number of completed deals bounce back to more than double the number for the same period in 2009.
Our latest research into M&A in the renewable energy sector takes a look at the recent changes in the sector and has discovered some interesting trends.
Perhaps most surprisingly, the survey has found a change in appetite from last year’s findings with biomass as popular as solar and wind. Andy Cox, energy partner at KPMG in the UK, commented:
“While wind is still seeing enormous deal activity at the moment, our research has shown that dealmakers, particularly the large companies such as the utilities, are looking for the next global trend and biomass looks set to be the ‘new wind’. Biomass plants have the potential to yield much higher returns than other renewable sources: a well executed biomass plant can deliver substantially greater economies of scale than wind; and the heat generated from incineration can supply neighbouring buildings, creating another revenue stream. More broadly, the potential for biomass to operate as a base load power source provides advantages in comparison to intermittent technologies such as wind and solar in large scale electricity system integration.”
The research also revealed a number of other trends including a continuing ‘gap’ between expectations in valuation between buyers and sellers of renewable assets.
This report, written in collaboration with VB/Research, is based on a survey of 250 senior executives from across the global energy industry and in-depth interviews with key organisations involved with the renewables energy sector.
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Our latest research into M&A in the renewable energy sector takes a look at the recent changes in the sector and has discovered some interesting trends.
Perhaps most surprisingly, the survey has found a change in appetite from last year’s findings with biomass as popular as solar and wind. Andy Cox, energy partner at KPMG in the UK, commented:
“While wind is still seeing enormous deal activity at the moment, our research has shown that dealmakers, particularly the large companies such as the utilities, are looking for the next global trend and biomass looks set to be the ‘new wind’. Biomass plants have the potential to yield much higher returns than other renewable sources: a well executed biomass plant can deliver substantially greater economies of scale than wind; and the heat generated from incineration can supply neighbouring buildings, creating another revenue stream. More broadly, the potential for biomass to operate as a base load power source provides advantages in comparison to intermittent technologies such as wind and solar in large scale electricity system integration.”
The research also revealed a number of other trends including a continuing ‘gap’ between expectations in valuation between buyers and sellers of renewable assets.
This report, written in collaboration with VB/Research, is based on a survey of 250 senior executives from across the global energy industry and in-depth interviews with key organisations involved with the renewables energy sector.
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