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

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.