Diesel Hybrids for Yosemite
Iraqi Oil Stocks Dwindling?

Investors’ View of Alt Energy

The New York Times runs an interesting piece on why investment in alternative energy companies is NOT booming.

Tapping into renewable sources of power like wind, solar power and hydrogen, which are inexhaustible but far from inexpensive, seems to make more commercial sense when crude oil costs $47 a barrel.

But the logic is evidently escaping Wall Street. Many companies involved in alternative energy have missed out on the rally that has lifted shares of oil and gas companies.

But skeptics closer to the investment mainstream argue that renewable energy will not become commercially viable for many years. In the meantime, they warn, these industries will have to depend on continual new financing and, as a result, are best avoided.

“Energy is not like other technologies, where you can get started for $15 million,” Mr. Zhang said, referring to the dot-coms that proliferated in the late 1990's. “You need half a billion.”

Portfolio managers and small investors may be reluctant to dip into their pockets when any payoff may be years away, but some big-name industrial companies that can afford to be patient have been making significant investments in alternative energy. Ford Motor and DaimlerChrysler recently agreed to acquire part of the vehicular fuel-cell business of Ballard Power Systems.

General Electric is one of the world’s largest producers of wind turbines and is heavily involved in solar power, too, as are the Japanese companies Matsushita Electric Industrial and Kyocera and the oil producers Royal Dutch/Shell and BP.

“G.E. is likely to become the largest alternative energy company in the world in a short time,” said James Cameron, a founding partner of Climate Change Capital, a venture capital firm in London that specializes in alternative energy.

Comments

The comments to this entry are closed.