Post-recession, rene­wable energy sector has witnessed heightened mer­ger and acquisition (M & A) activity and China and India are among the top five countries globally to wit­ne­ss large number of tran­sa­ctions in past four quarters.

In the last 12 months, M&A activity in the green energy sector has risen. Towards the end of 2009, acquisition activity started to recover along with output in the world’s major economies. The alternative energy sector saw 391 deals valued at $20.4 billion during the 12-month period ended Q2 2010 (calendar year), up 54.8 per cent in deal value when compared with a year-ago period (389 transactions at a total value of $13.2 billion), according to a report by global M & A organisation, IMAP Inc.

Solar segment witnessed largest deal value among the segments at $7.2 billion, followed by wind and biofuels.

In terms of countries, China saw the highest transaction value at $5.4 billion with 23 transactions in the past 12 months (July 2009-June 2010). US came in second with a value of $2.6 billion through 72 deals. Spain too saw a deal value of $2.6 billion through 36 deals, while Philippines came fourth with a total deal size of $1.6 billion through seven deals and India ranked fifth at a deal value of $1.1 billion through 14 deals.

While investments may seem on the low side at present in green energy sector, the cost of clean energy technologies is falling and these technolo gies are making their presence felt in many applications. Major growth is likely to come from the commoditisation of solar PV installations, smart meters, energy storage devices, wind turbines and other clean technologies.

With commoditi sation in the coming decade, we can expect the market to start maturing — leading to consolidation, with multi­nationals and pure plays acquiring smaller comp­anies to increase market share and stay competitive, pointed out the report.

Industry experts esti­mate that the installed price for solar PV inst­allations will drop nearly 60 per cent from an average of $5.12 per peak watt in 2009 to $1.11 per peak watt in 2019. Installed wind tur­bine pricing, which decl­ined 11.1 per cent from $1.9 million per mw installed in 2008 to $1.7 million per mw installed in 2009 is now competitive even with limited or no subsidies.

From now to 2035, world renewable energy use in terms of electricity gener­ation is likely to grow by an average of three percent annually, and the rene­wable energy share in worldwide power gener­ation is estimated to increase from 5.1 per cent in 2009 to 9-10 per cent in 2030.