More mature renewable energy sub-sectors such as solar, onshore wind and energy efficiency are attracting the majority of equity and debt while less advanced subsectors are finding it harder to obtain financing.
A new report, published today by Taylor Wessing, discusses this crowding-out effect. It is driving a wedge between novel technologies and those market sub-sectors which have moved somewhat beyond the arena of technological risk into that of regulatory, land acquisition, planning and development uncertainty. Scale-up and consolidation within these sectors is capital efficient and of a scale sizeable enough to interest the Venture Finance community.
Less mature technologies are however less likely to receive funding, as investors increasingly see renewable energy as a done deal. The survey reports an early-stage funding gap for European companies, especially in the biofuels, marine and green transportation sectors.
Should I be surprised that investment propositions based upon wind farm development should be more attractive than those relating to new wind turbine technology?