Impact of Recession on the Global Power Industry - Decline in Deal Volume and Value to Continue in 2010

Introduction

Amidst the looming recession and banking crisis, there has been a significant decline in both the deal volume and deal value in the energy industry. Capital remains scarce in the current economic environment and companies are facing problems when trying to draw capital for new deals. This is being compounded by challenges at the end of the investment cycle, as the liquidity markets were almost closed at the beginning of the last quarter of 2008. Exit options have been limited for investors to generate liquidity. Deal numbers and total Mergers and Acquisition (M&A) value in the sector as a whole declined significantly in 2009 but the decline in deals for renewables was much less marked than in the conventional sector. 2010 is set up to be another tough year as financing conditions remain constrained. Signals suggesting a sustainable recovery are staying mixed and, indeed, there remains a significant concern that recovery could stall, inhibiting deals in this sector.

However, despite the credit crisis, the situation is not all bad, as is evident from a slew of investments by private investors such as Good Energies, Draper Fisher, Jurvetson, Kleiner Perkins Caufield & Byers, Khosla Ventures, RockPort Capital Partners, and Quercus Trustcompanies. Opportunities are still available for companies with innovative technology, which can provide value several times higher than its revenue. In combination with the lower valuations of companies, this is a good time for energy companies with cash or surplus capital to seek out opportunities in all sectors, especially renewable technologies. Furthermore, policy makers, particularly in South Korea, China, the US, among others, have taken measures to provide fiscal incentives for utilities in their stimulus plans.

Scope

- Impact of Recession on the Global Power Industry
- Conventional Energy Deals
- Renewable Energy Deals
- Effect of decline in Equity Funding and De-Stocking of the Supply Chain
- Strategic Evaluation of Funding and Investment Opportunities
- Opportunity Strategy Evaluation Grid for Top Technologies
- Recommendations to facilitate investment in energy domain
- Venture Capital Funding in Energy Industry

Highlights

Reasons to buy

- Identify key growth and investment opportunities in the global energy market
- Position yourself to gain the maximum advantage of the industry’s growth potential across different technologies
- Facilitate decision-making based on upcoming market developments across technologies in the power domain.

Report Highlights

[Fade out the market survey infos]

TABLE OF CONTENTS

1 Table of Contents 1
1.1 List of Figures 1
2 Summary 1
3 Impact of Recession on the Global Power Industry – Decline in Deal Volume and Value to Continue in 2010 1
3.1 Significant Decline in Equity Funding and De-Stocking of the Supply Chain Reduces Average Deal Size and Volume 2
3.2 Investments in Renewable Energy Domain Gains Ground While Conventional Technology loses Space 3
3.3 Strategic Evaluation of Funding and Investment Opportunities 3
3.3.1 Sunk Costs 4
3.3.2 Favorable Governmental/Regulatory Moves 4
3.3.3 Barriers to Entry 5
3.3.4 Funding 5
3.3.5 Venture Capital (VC) and Private Investor Interest 5
3.4 Insights from Opportunity Strategy Evaluation 5
3.4.1 Prevent/Innovate (Quadrant I) 6
3.4.2 Partner/Innovate (Quadrant II) 6
3.4.3 Protect/Innovate (Quadrant IV) 6
4 Appendix 7
4.1 Methodology 7
4.1.1 Coverage 7
4.1.2 Secondary Research 7
4.1.3 Primary Research 7
4.1.4 Expert Panel Validation 7
4.2 Contact Us 7
4.3 Disclaimer 8
[Fade out table of contents]

LIST OF FIGURES

1.1 List of Figures
Figure 1: Global Power Market, Conventional Energy Deals, 2008 2
Figure 2: Global Power Market , Renewable Energy Deals, 2008 2
Figure 3: Opportunity Strategy Evaluation Grid for Top Technologies Considered, 2010– 2020 4
Figure 4: Recommendations for Opportunities Based on OSE Grid, 2010– 2020 6
[Fade out list of tables / figures]