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Biomass set for renewable energy gold KPMG’s annual survey of global renew ...

Biomass set for renewable energy gold KPMG’s annual survey of global renewable energy mergers and acquisitions (M&A) - Powering ahead: 2010 - has found a change in appetite from last year’s findings with biomass now as popular as solar and wind. Andy Cox, Energy Partner at KPMG in the UK, said: ‘While wind is still seeing enormous deal activity at the moment, our research has shown that dealmakers, particularly the large companies such as the utilities, are looking for the next global trend, and biomass looks set to be the ‘new wind’. Biomass plants have the potential to yield much higher returns than other renewable sources - a well executed biomass plant can deliver substantially greater economies of scale than wind; and the heat generated from incineration can supply neighbouring buildings, creating another revenue stream.’ He continued: ‘However, investors in biomass have important challenges to address, in particular focusing around the visibility of long term fuel supply and pricing. These challenges are hampering the availability of funding for many projects. The survey also found that there has been a 145% jump in renewable deal activity compared with last year, despite 69% believing securing finance for acquisitions was harder in the previous 12 months. It also found that the US, China and the UK are the most popular countries for future deal activity. The UK is the only country where consumer demand was cited as a top attraction, rather than government subsidy everywhere else. Cox added: ‘The “push me, pull me” effects of government subsidies can be seen none more keenly than in the renewable energy M&A market. The research shows that the US, India and China, in particular, are hugely appealing to companies and investors by virtue of government incentives.’

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