United Kingdom

Details

  • Service: Advisory, Transactions & Restructuring
  • Industry: Power and Utilities
  • Type: Benchmarking study
  • Date: 09/05/2012

Green power 2012: The KPMG renewable energy M&A report 

This report is KPMG’s annual overview 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.


This report is based on a survey of 500 senior executives from across the global energy industry and in-depth interviews with key organisations involved with the renewables energy sector.

Green Power 2012
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Contact

Andy Cox

 

Andy Cox

Partner

KPMG in the UK

020 7311 4817 

andrew.f.cox@kpmg.co.uk

Key findings:

 

  • Globally, a total of 591 renewable energy M&A deals valued at US$51.2bn were announced during 2011, a significant increase on the 431 deals announced in 2010;
  • 150 M&A transactions totaling US$9bn were announced in Q1 2012, a slight increase from the US$8.75bn value of 150 transactions in Q4 2011;
  • Outbound Asian M&A increased by more than 50% from 2010, with 29 acquisitions announced totaling $2.1bn of assets acquired outside Asia in 2011. In line with this, over 40% of survey respondents believe than new investors and acquirers in renewable energy are most likely to come from China;
  • The USA continues to be the most attractive market for renewable energy M&A and investment with over 46% of corporates and investors surveyed planning to target the USA during the next 18 months despite the severe policy uncertainty;
  • Corporates and investors are targeting solar PV (27%), biomass (21%) and onshore wind (18%), whilst debt providers’ principal investment focus is on onshore wind (56%), solar PV (46%) and hydro (26%);
  • There was a 39% decrease in renewable energy project finance to US$33.4bn in Q4 2011, compared with the previous quarter; 13% below the quarterly average during the last three years;
  • A number of utilities companies have been divesting non-core assets in the renewables sector; a trend which KPMG sees continuing in the near term, alongside a limit on their investing in new deals. Their focus is expected to remain on offshore wind investment where the scale of projects are more akin to their traditional generation assets;
  • Renewable energy generation costs continue to fall significantly in 2011 to the extent that the industry in now talking about when rather than if, grid parity will be reached; and
  • 70% of respondents indicated that it is now harder to secure debt financing to fund acquisitions of renewable projects and companies than 12 months ago; however, the majority of respondents (85%) expect renewable energy deal flow to remain robust in the next five years.
 

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