New Type Energy||Renewable Energy

As the news of GENEVA (Reuters), the investors are betting on the renewable or clean energy. Meanwhile, the green themes are looking for healthy and sustainable returns. However, the road is full of hardships for the unwary.

According to the attendees who have presented at the Jetfin Green 2009 alternative investment conference in Geneva, some alternative energy sources are now in a position to compete with more established sources, even in the absence of government subsidies.
Walther Lovato, who is a portfolio manager at California-based asset manager Passport Capital, said that "Renewable energy technologies are at a point where they are cost competitive with the grid, Copenhagen aside". He would take part in a summit which was held in Copenhagen in December. He suggested that the world leaders would attempt to agree a new global climate treaty to replace the Kyoto Protocol that expires in 2012, which would potentially lead to more subsidies for green energy.
At present, the government expenditure and subsidies are already a significant driver of the alternative energy industry. "Some $500 billion has been focused on alternative energy... with a growing emphasis on energy efficiency," said Sandy Christie of BlackRock Investment Management, UK.
The focus on the energy efficiency was not always there. As recently as 2008, the U.S. Congress voted that the congress would continue to levy the  tariffs on imported ethanol and subsidize domestic ethanol production from corn, though the datas showed that the production was more expensive and the fuel was less efficient than the sugar-based ethanol.
U.S. producers such as Pacific Ethanol have been shunned by investors, and it was clear that subsidies could not create a profitable business.
Indeed, most investors said they now avoid companies which relied on the government support, and warned that investors could get burned when subsidies distort views of a company's viability. For example, solar industry experts blamed that the prices of the photovoltaic cells had pushed up by the Spanish subsidies. The solar industry increased the production to meet demand. However, when the subsidies were withdrawn, the demand for the cells fell and the prices collapsed.
With prices continuing to weaken, shares at even large and profitable solar companies such as Suntech Power and First Solar have underperformed the broader market.
Fund managers warned that bubbles tended to develop when investment themes begin to gather speed, and green investing was no exception. Roland Pfeuti, who was the head of private equity at SAM, owned by Dutch asset manager Robeco, said "We saw an ethanol bubble and a biofuels bubble a few years ago and we've just seen a solar bubble".
Fund managers said these bubbles were fueled by "hot" money, when speculative investors piled into popular investment themes in the hope of making a quick profits, but sell out quickly when these fail to materialize.
One conference attendee said that the financial crisis has killed off many of the weaker companies, with only the financially viable and those able to raise cash in challenging market conditions surviving, and many are now poised for profitability.
Christie who is one of many managers favored Wind energy described the energy as "cost competitive and scaleable" and the solar energy where module production costs and prices had come down to viable levels.
The funds managers and other end investors said they had increased or intended the fund to increase their allocations to financially viable green themes, which were no longer a marginal asset class.
Tim Mockett who is the managing director of the property team at UK-based Climate Change Capital said that "The trend toward green investing is completely irreversible".
Therefore, We call it the new mainstream.