For the past few years, the cost of clean energy has been unnaturally high, defying the experience curve because of supply-chain bottlenecks and soaring commodity prices, a seller's market that hid all sorts of sins. But the investment surge of recent years was just starting to ease the bottlenecks when the credit crunch arrived to put the squeeze on demand. The result will be a dramatic and permanent change to the dynamics of the industry. No more silicon shortage; no more extended turbine waiting lists. Now buyers with cash to spend hold all the power. Prices will plummet towards marginal costs, and the world is going to be stunned at how cheaply the best companies can deliver clean energy and still make a profit. This is very good news for developers with access to funds, but very bad news for equipment manufacturers with poor cost positions.
As governments around the world have struggled to head off the worst recessionary scenarios and have found that monetary stimulus alone is not enough, they have placed clean energy at the heart of their fiscal stimulus packages — most notably the incoming U.S. administration, with its talk of US $150 billion in clean energy funds and at least $78 billion in targeted measures for the sector.
Here at New Energy Finance we are looking forward to supporting you as you work to meet the challenges of these extraordinary times. We now have 130 staff, some 35 more than a year ago, with offices in 11 cities. With your support and feedback we will continue to develop our core services in renewable energy, energy technology and the carbon markets. In addition, we have been building new services around energy efficiency, digital energy, nuclear power and carbon capture and storage, which we will be rolling out during the course of this quarter.
We have also been busy preparing the second New Energy Finance Summit, which will take place in London from the 4th to the 6th of March. It is an invitation-only, 200-person event, with an emphasis on discussion and debate between senior decision-makers.
I do hope to see you at one of our events around the world during the course of 2009. It is already shaping up to be an extraordinary year in the history of clean energy and the carbon markets.