N America green energy M&A deals count to double in 2013 - Frost & Sullivan
Dec 18, 2012 - The number of green sector merger and acquisition (M&A) deals in 2011 in North America jumped by two-thirds on the year and is now expected to double in 2013 driven by increased interest, Frost & Sullivan says.
Yet, the total value of the M&A deals in North America declined to USD 33.4 billion (EUR 25.3m) in 2011 from USD 48.8 million in 2010, Frost & Sullivan notes in its analysis named Mergers & Acquisitions in Renewable Energy in North America. For the near future the analyst expects higher quantity of transaction of lower value.
The number of M&A deals in 2011 within the wind power sector grew by 58% on the year, while the number of solar M&A deals increased by 48%, says Vinod Cartic, Frost & Sullivan business and financial services consultant. At the same time, the deal size was smaller, with total values of the deals declining by 24% and 20% for wind and solar, respectively, he notes.
The higher capital costs of the renewable energy systems compared to conventional energy facilities reduce the growth potential of the market. Furthermore, the technical skills required to run green energy systems influence on the system installation and costs, according to Cartic.
"Companies must resort to effective asset management to enhance the value chain. Governments can do their bit to safeguard the industry's interests through transparent and stable tariffs and using technology as a differentiator", adds Cartic.