Australian Cleantech Review 2012

Wednesday, 29 February, 2012

The Australian Cleantech sector has been profiled to a greater extent than ever before in a report published at the Australasian Cleantech Forum in Melbourne. The report provides an overview of the location, activities, revenue, employee numbers and funds raised by all of Australia’s leading cleantech companies.

The 8th Annual Australasian Cleantech Forum opened on 27 February to encourage development and investment in cleantech innovation. Said to be the largest cleantech investment event in the Southern Hemisphere, the two-day conference features presentations from over 30 different speakers from the Australian and international cleantech community.

The report published at the forum comes from Australian CleanTech, a research and advisory firm that works for cleantech companies, investors and governments to deliver both an understanding of and growth in the sector.

John O’Brien, Managing Director of Australian CleanTech, said, “This is the third version of Australian Cleantech Review and it has been used extensively by investors and governments wanting to understand the sector. This year we have expanded the coverage of companies to provide a more detailed profile. We have found that it is already a significant sector and one that is growing fast.”

Cleantech is defined as comprising products and services that have both “economic and environmental benefits”. The subsectors of cleantech include renewable energy, water, waste and recycling, construction materials, energy efficiency, carbon trading and environmental services.

The analysis of 1160 Australian cleantech companies reviewed shows the leading sectors of activity and which regions are most active. As a sector, the companies had combined revenue of $26 billion and employed 45,000 people. They were involved in capital transactions totalling $2.9 billion during the 2011 calendar year in 119 separate capital transactions.

  Listed Unlisted Total
No. of companies 81 1079 1160
Market capitalisation ($m) $7441m N/A N/A
Revenue ($m) $13,493m $12,084m* $25,577m
Employees 16,426* 28,567* 44,993
Capital transactions ($m) $1,428m $1,457m $2,885m
No. of capital transactions 77 42 119

*Australian CleanTech estimates based on company analysis.
New South Wales and Victoria were the most active states, with the largest sectors being water, waste and solar.

Comparable industries

With 45,000 employees, the sector is the same size as the automotive manufacturing industry in Australia and the $26 billion of revenue makes it equal in value to a quarter of the entire Australian manufacturing sector. Furthermore, employees in cleantech create on average about five times the revenue per employee in comparison to both automotive and general manufacturing.

“That cleantech is the size of automotive or 25% of all manufacturing is not something that is yet recognised. It is a significant proportion of the Australian economy and one that has a growing future with highly productive and valuable jobs,” O’Brien said.

International cleantech sector

In addition to the Australian industry profile, a comparison is provided from international researchers including summary data from Bloomberg New Energy Finance showing international activity and investment levels. The 2011 total global investment in clean energy reached US$260 billion, a 5% increase on 2010.

The international sector growth is being driven in Europe by regulatory measures and the EU Emissions Trading Scheme and in the US by the voracious appetite of the venture capital industry. In China, the drivers are environmental rehabilitation and energy security, making it the fastest growing global cleantech market. Other countries, such as Korea with its Global Green Growth Initiative, see a great economic opportunity to secure a leading position in cleantech.

“Australia is falling further behind the rest of the world,” says O’Brien. “Whilst there is an immature debate on pricing carbon here, other countries are seeing the ‘opportunities beyond carbon’ and investing in the industries of the future.”

O’Brien says Australian governments are missing the opportunities being presented to the world and, in the long term, the country will suffer.

“Australia as a quarry with some nice beaches is not a strategy that will deliver long-term prosperity.”

Industry forecasts

The report concludes with a forecast for the regulatory, technology and investment trends that will impact the cleantech industry in Australia in 2012:

  1. The carbon sky remains intact - Possibly the biggest boost for the long-term growth of cleantech in Australia will be that the ‘sky doesn’t fall in’ with the introduction of the carbon price.
  2. Pump priming - The oil price is forecast to rise during 2012, which will drive growth in energy efficiency, biofuels and plastics recycling.
  3. Increasing industry efficiency - Industry will increasingly demand energy efficiency and emissions reductions technologies.
  4. The government salesman - State and federal governments to facilitate increased sales of cleantech solutions through industry development and procurement initiatives.
  5. Competitive councils - Local governments will be increasing competing on their ‘green-ness’.
  6. Overseas success - Companies and investors will form international partnerships to secure the greatest benefit from the world’s shift towards sustainability.
  7. Wind and solar change tack - The price of LGC will reach $45 during 2012. Wind farms will increasingly need to move into more remote areas and there will also be a growing rollout of 1-3 MW commercial solar projects underpinned by PPAs.
  8. Distributed PV finds its feet - Solar panel pricing will reach US$0.85/W in mid-2012.
  9. Geothermal resurrection - The geothermal industry will finally make significant progress in 2012.
  10. Asia and MNCs save the day - 2012 will see large-scale Asian and multinational corporations investing into underpriced Australian cleantech companies ignored by the local market.
  11. Upgrade finance step change - Environmental upgrade finance will drive the uptake of green building solutions.
  12. Fundamental drivers of cleantech strengthen - The fundamental drivers of cleantech will continue to strengthen in 2012. Raw material depletion, environmental degradation, energy security and the need for efficiency all drive cleantech adoption.

“The data provided in this report will enable investors and government to more fully understand the opportunities that the cleantech sector presents,” O’Brien concluded.

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