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Where's the value in globalization?


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Comments on this article from the Q3 community

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I have just completed a strategic review of the development of customers in the global wind industry for my firm - Vestas Wind Systems. Wind (and the rest of the renewable industries) are starting to see a major shift in investment and ownership of wind farms particularly from the financial sector. Increasing numbers of banks, PE, and VC firms are starting to look seriously and invest seriously in wind energy. There is a small risk that this is helping to push up valuations of assets and alter what is essentially a young industry that is already constrained on the supply/demand side. This is posing some big problems for traditional customers who are already struggling with a general rise in the assumed cost of energy in all energy asset investments. In particular, I find that the number and breadth of PE firms (from the smallest to the biggest) looking in detail at renewables is an interesting but difficult development as it tends to put out the signal of an investment bubble. When the core assets are essentially long-term stable cash flow investments, any signs of a bubble are destructive to the long-term stability of a new industry.

Posted by Nick Brod on July 7, 2008

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