NEW DELHI, INDIA: Notwithstanding the economic slowdown, investors have been making a beeline towards start-ups developing solar power, bio fuels, and other renewable sources of energy.
But analysts have been wondering as to whether too much money is being fueled into too many over-hyped technologies and companies.
The panelists - Kumar Jain, head - Processes, Flour India; Atish Babu, vice president, Nexus India Capital; Pankaj Sehgal, director, Sun Group today here at EmTech 2009, discussed in depth the opportunities and challenges thrown by the rapidly developing field of clean technology.
Atish Babu tried to put in perspective the recent spate of investments into the start-ups related to renewable sources of energy.
“Though the investments in clean technologies augurs well for the industry, in the recent past there has been a great deal of financial speculation and most of that has been based purely on greed,” he said.
“Investors are overestimating the short term benefits of their investments and underestimating the long term benefits that investments will accrue to them,” said Atish.
Atish argued this was dangerous for the industry, as it will put off interest in the alternative sources of energy in the long run.
“A case in point was the imprudent investment handed over to the bio fuels, irrespective of seeing whether the industry has a long future,” he pointed out.
“The investments were made because oil prices had suddenly shot up and they wanted to reap the immediate benefits. Now, with oil prices back to normal and bio fuels unnecessarily raising the food versus fuel debate, interest in these areas has suddenly waned off and many investors are now backing off.”
Atish added that investors need to take a long-term view to get benefits from their investments.
“In short term, I am seeing imprudent investments but in long term they are great investments provided investors have a long-term strategic view,” he added.
Atish drew parallels to the current spate of investment in alternative energy start-ups to one witnessed by the tech industry in late 90’s which ultimately ended in bust in early 2000.
Pankaj Sehgal, Director, Sun Group said the economic crisis provided a great opportunity for countries to push alternative sources of energy which can have great benefits for climate in the longer run.
Sehgal lamented that progress towards alternative energy has been stalled for long time and government has have not been very much proactive in supporting the alternative sources of energy.
Sehgal called for an integrated policy approach from countries, for the threat of global warming was real.
Kumar Jain, Head - Processes, Flour India, said in Indian context it was ludicrous to talk about clean tech bubble, for investing in alternative forms of energies was needed not only because of climate reasons but because of Indian alternative sources of energy.
“In Indian we have a huge deficit of 30-40,000 MW of energy. We need more alternative sources of energy to plug in the gap,”added Jain. “And the cost of procuring renewable energy has come down which should governments to look seriously at those areas.”
For more stories on EmTech click here