The share of alternative energies in the worldwide energy supply is expected to grow significantly in the future, primarily 
driven by the political risk of relying on 
declining oil reserves and concerns about global warming, inspiring many countries to enact renewable-energy standards, forecasts international financial institution Credit Suisse (CS).

As a result of increasing demand, various 
industries within the alternative-energy 
sector, most noticeably the wind and solar 
industries, are currently experiencing 
double-digit growth. While these energies 
currently make up a small portion of the total renewable-energy market (7,3%), some industry watchers expect wind and solar to contribute more than 25% to renewable energy by 2030, CS reports.

“Alternative energy is a long-term theme. Driven by rising energy costs and regulatory 
mandates in many countries, it is rapidly gaining a bigger share in the global energy supply,” says CS alternative-energy research head Miroslav Durana.

However, as these young industries quickly 
increase their capacity, components supply shortages and execution problems are likely, says Durana, adding that, as a result, many alternative-energy companies show high earnings growth but also relatively high earnings risk. 
Therefore, CS recommends a diversified investment in selected stocks across all 
alternative-energy themes or in an alternative- 
energy index.

“It is an exciting time for alternative energy, with market dislocation and heavy competition for investment likely,” says Jeffrey Culpepper, CS investment banking vice-chairperson for the Europe, Middle East and Africa region.

Meanwhile, Dr Sultan Ahmed Al Jaber, CEO of Masdar, a multi-faceted future energy initiative wholly owned by the government of Abu Dhabi through the Mubadala Development company said that, with the world focused on the current economic disruption, future energy 
challenges could have “slipped” off the international agenda.

Speaking at the World Future Energy Summit, held in the city of Abu Dhabi last week, Al Jaber, said that the global economic downturn had had an impact on every sector of the global economy, including renewable energy, and that the lack of available capital and lower oil prices had created some doubts about the renewable energy sector, and whether 
it could maintain its relevance and attract 
investment.

But he added: “Renewable energy continues 
to make absolute sense, even in these difficult times, and for those who are capable of looking beyond the economic downturn. There are many signs that point to renewable energy sector’s undeniable monetary and long-term viability, including national policy commitments and significant investment taking place globally.”

Such investments include US President Barack Obama’s pledge to invest $150-billion in clean energy over the next ten years, the European Union’s undertaking to reduce its carbon footprint by 20% by 2020, and the Australian government’s establishment of a multibillion dollar renewable energy investment fund.

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