CleanTech exports will build next generation super powers

Recent slow down has forced many countries to rethink and revamp their strategy to take their economy to the next level. Most of the countries have recognized clean energy as the new element for sustainable growth for the next two decades. Policy changes, investment targets and new trade agreements are being promoted to encourage RE and clean technologies around the world. According to Roland Berger clean energy technology will reach a total market volume of EUR 1600 billion in 2020. It will make it one of the largest industries in the world. This market has a huge potential to create jobs and can give a new push to economies.

The US government has under tremendous pressure due to sustained unemployment in the country. US has been aggressively promoting RE as the next big thing and is also encouraging investments in RE around the world. Recently US established Renewable Energy and Energy Efficiency Export Initiative. This initiative will help in financing, export promotion, trade promotion and also look into international trade barriers in this sector. It is aimed at increasing the competitiveness of U.S. renewable energy technologies and products in the international market. The Commerce Department will make a coordinated effort to increase trade related to renewable with other countries. The Overseas Private Investment Corporation (OPIC) announced that it will invest $300 million towards renewable projects in emerging markets. The Export-Import Bank launched ‘Solar Express’ earlier in 2010 to provide financing for US exports to small solar energy projects. US is pressurizing India to remove restrictions on import of solar technologies for the National Solar Mission. US aims to emerge as the production hub for clean energy technology, which it wants to export to the rest of the world.

China leads the lot in RE investments. In 2009 China led the world with an investment of $34.6 billion in clean energy technologies and US came second with an investment of $18.6 billion. China has committed to achieve 20 % of its energy needs from renewable energy sources by 2020.  It is also offering very liberal subsidies and cheap loans in this sector to contain the costs to much lower levels, which is often a concern for global players. China’s major export hub Guangdong Province will invest 10 billion yuan ($1.5 billion) in green energy development in the next five years. China accounts for more than 90 percent of world supplies of rare- earth elements which are vital for the clean tech industry. It highlights the monopoly of this country in the clean tech space and how it aims to be a sourcing super power to the rest of the world.  The recent restrictions on export of this REE could create a huge setback on the CleanTech space and would be interesting to see how and if China buckles to the world pressure.

In September 2010 the German government adopted a long-term strategy of developing its energy industry. Germany has set up Renewable Energies Export Initiative to secure exports for German companies and in order to maintain the competitiveness of its companies it aims to prevent a rapid increase in manufacturing prices. Renewable Energies Export Initiative promotes Germany renewable technology to the world.  Renewable-energy industry jobs have been rising steadily and small and medium size companies are leading the industry in this sector. Germany is a pioneer in solar technology. The German Renewable Energy Federation (BEE) is the organization that brings political groups, specialized institutes and other related organizations together for promoting and encouraging renewable energy.

France has launched a 4 year renewable energy investment program wherein funds upto  €1.35 billion will be sanctioned in the form of subsidies and will also be invested in clean technology projects. This is planned for the next 4 years. It also seeks to attract €2 billion of private investment to complement the above program.

Nordic countries have been very proactive in promoting clean technology and at the same time have been investing heavily in this sector. Norway has been a leader in investing in clean technologies. In 2009 it committed to invest $3.1 billion in clean technologies through 2014. Infact in Q1 2010 Norway attracted the highest amount of cleantech investment among the nordic countries. THINK Electric car is  born in Norway!.  Swentec, the Swedish Environmental Technology Council works to develop a comprehensive and effective structure to strengthen the Swedish cleantech industry. Sweden is investing heavily in research in many clean technologies like electric car, bio mass, etc. Sweden boasts some 3,500 clean tech companies. Denmark ventured into wind power very early on and has also dominated the wind power market. Danish Wind Energy Group promotes exports of Danish wind turbines all around the world. Denmark also plans to introduce electric vehicles on a large scale by 2011. Finland is one of the world’s leading users of bioenergy. It has established the Finnish Cleantech cluster to increase Finnish environmental business, create new jobs and venture into global markets. This cluster is considered to be one of the best in the world.  It is determined to accelerate the introduction and commercialization of new energy and environmentally friendly solutions.

With European economy still in wait and watch mode and crisis in hand and US not fully out of the woods, as I mentioned in my last blog that the big buzz might not last. However top economies for the next decade would emerge due their presence and dominance in the CleanTech sector.