Green Energy

By Martin Stuchtey et al

Over the past couple of years, many clean-tech equity indexes have performed poorly; in January 2014, the American news programme 60 Minutes ran a highly critical segment on the subject. The former chief investment officer of California's largest public pension fund complained in 2013 that its clean-tech investments had not experienced the Jcurve: losses followed by steep gains. It's been "an L-curve, for ‘lose'," he said.

So, is clean-tech failing? In a word, no. Rather, the sector has experienced a cycle of excitement followed by high (and often inflated) expectations, disillusionment, consolidation and then stability as survivors pick up the pieces.

We've seen this before with other once-emerging technologies, such as cars, railroads, elevators, oil and the internet… It's also important to look beyond financial statements.

Global wind installations, for example, have soared about 25% a year since 2006.

And global commercial investments in clean energy have more than quadrupled, from nearly $30 billion in 2005 to about $160 billion in 2012.

Meanwhile, the average real cost per oil well has doubled, and new mining discoveries have been flat, despite high investment. Clearly, new ways are needed to meet the needs of the 1.3 billion people who lack electricity and of the 2.7 billion who rely on traditional biomass, such as wood and dung, for cooking. Clean-tech is no passing, unprofitable fad.

From "Myths and Realities of Clean Technologies"