CHICAGO, December 6, 2012 – Is green energy a fad that has run its course? The investment community seems to think so. RENIXX® World, the Renewable Energy Industrial Index of the world’s top green energy companies, hit an all-time low below 146 on November 21, down more than 90 percent from the December 2007 peak.
The RENIXX index was established in 2006. It’s composed of the world’s 30 largest renewable energy companies with more than 50 percent of revenues coming from wind, solar, biofuel, or geothermal energy, or the hydropower or fuel cell sector. The index includes equipment producers, such wind turbine companies Vestas (Denmark), Gamesa (Spain), and Suzlon (India), solar equipment companies such as First Solar (USA), Suntech Power (China), and Sun Power (USA), and also utilities such as Enel Green Power (Italy) and China Longyuan Power Group. Of the 30 companies, 10 are headquartered in China, 10 in Europe, and 7 in the US.
During the heydays of 2007 and 2008, the RENIXX index was on a roll. Former Vice President Al Gore’s book An Inconvenient Truth reached number one on The New York Times best seller list in July, 2006. His documentary movie by the same name became a worldwide hit the same year. In December 2007, Mr. Gore shared the Nobel Peace Prize with the Intergovernmental Panel on Climate Change. The world was whipped into global warming frenzy.
Subsidies and mandates for green energy existed for many years, but during 2006—2008 governments redoubled the emphasis on renewables. California enacted the Global Warming Solutions Act in 2006, establishing greenhouse gas emissions targets and renewable mandates. Illinois, Michigan, and other states passed or strengthened Renewable Portfolio Standards, requiring electrical utilities to buy an increasing percentage of renewables or pay fines. The European Union approved the Climate Action and Renewable Energy package in 2008, requiring increased renewable energy and biofuel use and tighter emissions restrictions.
Money poured into green energy stocks. Kevin Parker, Director of Global Asset Management at Deutsche Bank, talked about Mr. Gore and a green investment fund that the company created: “He [Al Gore] impressed us all at Deutsche Bank Asset Management. We invited him to an internal meeting in April, 2007 during which we discussed the issue of climate change extensively. A few months later, he received the Nobel Peace Prize for his commitment. We then created a fund that invests in companies that position themselves as climate-neutral. Within two months almost 10 billion dollars flowed into this fund. Can you imagine? 10 billion! There has never been such an overwhelming success.” The RENIXX index rocketed to over 1,900 in December of 2007.
Read more at The Washington Times Communities. By Steve Goreham.