According to the Energy Information Administration (EIA), “the United States expects renewable energy to increase by 17% to 42GW in 2024 and will account for a quarter of electricity generation.”
The renewable energy sector continued to see significant investment activity in the second quarter of 2024, although growth showed mixed results compared to previous quarters. The sector secured $1.3 billion in equity financing, a slight increase from the first quarter of 2024, which saw $1.2 billion inflows. However, this amount is lower compared to some previous quarters in 2022 and 2023, indicating a possible slowdown in the pace of investment.
The overall trend in equity financing has been fluctuating, with peaks in late 2021 and early 2022 when the sector saw strong investment interest. The financing level for the second quarter of 2024while stable, is a reminder of the cyclical nature of investments in the sector.
Activity in the field of renewable energies
In the renewable energy space, the average deal size has fluctuated in recent years, peaking at $38.4 million in 2020, followed by a decline to $31.2 million in 2022. Year to date (YTD), it continued to decline to $23.3 million in 2024. Meanwhile, the median deal size has remained more stable, with figures of $6.5 million in 2020, a slight decline to $5.0 million in 2022, and a rebound to $5.3 million year to date in 2024. This data highlights a trend toward mixed deal sizes, encompassing both larger and smaller deals in the industry over time.
Number of deals: There were 82 deals in the second quarter of 2024, a slight decrease from the 107 deals in the first quarter of 2024. This decline in transaction volume indicates A more cautious Investors’ approachpossibly due to general economic conditions or market saturation in certainly Renewable energy segments.
The renewable energy sector remains a Key In investor focus: The second quarter of 2024 saw a moderate level of investment compared to some previous quarters. The development of the sector can be influenced by external economic factors and changes in investor strategies.
By global region
When analyzing financing by global region, the United States leads the way with 41% renewable energy share, followed by Europe and Asia. Other regions, including Canada and all other regions, continue to make relatively low contributions, with Canada at around 4% and other regions at 4-8%.
According to CB Insights, Who leads the pack?
1. MN8 secures $325 million for expansion
MN8, one of the largest independent US renewable energy companies, closed its first private placement in April, raising $325 million. The funds will support Pursue Expansion and growth plans.
This $325 million investment includes $200 million from Mercuria Energy Group and $125 million from Ridgewood Infrastructure, a leading U.S. infrastructure investor. Shareholders will have the option to convert their preferred shares into common shares in the future.
The press release also revealed thatas part of the deal, Mercuria will receive one board seat and one observer seat on the MN8 board, while Ridgewood will receive one observer seat. The partnership will focus on discovering commercial opportunities to promote more sustainable, affordable and reliable energy systems, combining MN8's expertise in renewable energy with Mercuria's deep knowledge of energy markets.
In May, US solar technology company First Solar, Inc. announced that MN8 Energy LLC has ordered 457 megawatts (MW) of advanced thin-film solar modules. This order includes 170 MW of Series 6 Plus bifacial modules and 287 MW of Series 7 modules. The solar modules are be used To Energy projects in the northeast and south of the USA.
MN8's 3.2 GW portfolio provides renewable energy solutions to over 40 corporates, 70 government entities and 20 utilities. In the last 12 months, MN8 Energy generated revenue of $326.69 million and profit of $191.84 million.
2. Tree Energy Solutions (TES) raises $152 million to promote green energy Projects
Tree Energy Solutions (TES), a global leader in green energy, closed its third Series C funding round on April 4, securing $152 million. The funds will fuel the development of TES' global green energy projects. with a focus on e-NG (electric Natural gas from green hydrogen). This round attracted top investors including Azimut Group, Fortescue, E.ON, HSBC, OG Energy and Zhero.
TES produces e-NG by combining green hydrogen with biogenic or recycled CO2, creating a green alternative to natural gas that uses existing infrastructure for transport and storage. Pursue is a partnership with significant Energy companies such as TotalEnergies, Osaka Gas and ADNOC are building large E-NG projects in North America, the Middle East, Australia and Europe.
In addition, TES is developing a green energy hub in Wilhelmshaven. The aim of this hub is to decarbonize the German and neighboring energy markets through the import of natural gas and E-NG, the export of CO2 and the production of green hydrogen and electricity.
3. Newcleo’s strategic shift: fundraising and expansion in Europe
Newcleo, a UK nuclear startup, although new, has had an impact in this area. Pursue recently raised around $528 million in three funding rounds, with the most recent round being a Series B that raised $94 million in May 2024. They aim to tap European Union resources by moving their holding Pursue from the UK to France. This move is part of their broader strategy to expand their business within the EU.
While Newcleo shifts its focus to France, the company still has big plans for the UK. Pursue intends to invest in and develop next-generation small modular reactors (SMRs) to support the UK's electricity grid. However, its UK ambitions suffered a setback when the government denied private companies access to the Sellafield site, prompting Newcleo to put a planned project there on hold. Nevertheless, Newcleo's collaboration with France's CEA to develop a lead-cooled fast reactor represents a significant step in its European expansion.
Here is the full list:
From this trend and analysis, it is clear that there is significant investment potential for leading renewable energy companies in 2024. The significant funding, especially in Asia and the US, underscores the demand and opportunity in the renewable energy sector. According to media reports, solar energy remains at the forefront, while nuclear energy will gain strong momentum in the future.
Disclaimer: Data source CBInsights report
