Renewable Energy: Southeast Asia

Renewable energy in Southeast Asia is a growing sector with a market size of $205 billion and capital investments totaling $11 billion between 2020 and 2022. The region is committed to renewable energy and integrating sustainable practices into legacy industries.

This report provides an overview of the renewable energy market in the Southeast Asia region, including a market breakdown, capital market analysis, and transaction analysis.

Renewable Energy in Southeast Asia: Market Breakdown

• Renewable energy in Southeast Asia is a $205 billion industry with a forecasted compound annual growth rate (CAGR) of 7% between 2022 and 2027.
• Southeast Asia has invested $2.7 billion into the renewable energy sector, with a deal count of 60 in 2022 alone, highlighting the rapid development of renewable energy in the region.

Renewable Energy in Southeast Asia: Capital Market Analysis

• Renewable energy companies in Southeast Asia have received significant capital, totaling $10.69 billion since 2020 across 236 deals with an average deal size of $45 million.
• Capital deployed grew significantly through 2021 but slowed considerably in 2022 due to a combination of a lower deal count and a smaller average deal size.

• Mergers and acquisitions had the most significant capital investment in the renewable energy sector of about 46%, or $4.9 billion, since 2020, suggesting that considerable market consolidation is occurring within the industry.
• Capital investments of 24%, or about $2.6 billion, in other deal types, such as secondary transactions in the sector, further highlight the high level of consolidation in the market.
• Capital deployed in private equity transactions, $1.5 billion or 14% of all capital deployed, and venture capital transactions at 5%, or $535 million, showcases the fundraising opportunities for early-stage renewable energy companies and the growth potential of the sector.

• Singapore has the most significant capital investment in renewable energy companies, totaling 52%, or $6 billion, since 2020, signifying their commitment toward sustainability and net zero carbon emissions.
• The Philippines, as an emerging nation, has contributed 30%, or $3 billion, in the sector.
• Emerging nations, such as Malaysia, Thailand, Indonesia, and Laos, have additionally conducted notable investments over the same period. The investment highlights the desire for growth in the renewable energy sector from all countries in the region.

The Company

Sun Energy provides its clients with environmentally friendly solar panels. Moreover, the corporation supports its clients by offering financial, market development, and rental services for solar panels with the intent to change the world through renewable energy positively.

Most Recent Financing Status

• Sun Energy raised $25 million of Series A venture funding in a deal on November 22, 2021.
• The round was led by PT Delta Dunia Makmur and TBS Energy Utama.
• The funding will enable the company to develop more solar PV projects, cement its market position in Indonesia, and bolster further growth in the Asia-Pacific region.

Southeast Asia’s renewable energy sector is filled with firms that work together with the objective of sustainability and creating a positive change for a better world free of climate change. Many countries in Southeast Asia, including emerging nations, have proven to be committed to sustainability through investments placed into renewable energy, demonstrating their desire for this sector to grow.

Sources: Pitchbook Data, Inc.

Renewable Energy: Lithium Batteries

Over $100 billion has been invested into the lithium batteries sector since 2020. Global trends towards renewable energy have driven the growth of the sector. Forecasts indicate that the sector will grow at a compounded annual growth rate (CAGR) of 13% from 2022 to 2031, making this one of the fastest-growing energy sectors. Chinese companies have received over 50% of capital deployed within the sector showing the appetite for growth and geopolitical importance of the sector.
This report provides a capital market overview of the lithium batteries sector and capital investments according to region or deal types, in addition to how much firms have increased their capital investments as well as announced deals between 2020 and 2022.

Lithium Batteries: Market Breakdown

• The lithium battery industry is a $48 billion industry with a five-year compound annual growth rate of 23%.
• Lithium batteries can be used to power electric vehicles, households, personal electronics, and as a power backup storage. The technology allows lithium batteries greater energy storage because of the smaller and denser chemical structure. Of the energy stored in lithium-ion batteries, 95% is available for use, whereas lead acid batteries have 10% less voltage capacity.
• Storage is important in renewable energies because it ensures there is always an availability of electricity. Batteries allow for energy to be stored during peak generation hours and used during off periods.

Lithium Batteries: Capital Market Analysis

• Lithium battery companies have received notable capital deployment since 2020, with a total of $109 billion invested in the sector.
• Capital invested per quarter has been increasing despite lower deal count, indicating that larger transactions are occurring in the market. This shows that the lithium battery sector is maturing and capable of raising large investments.
• In Q2 of 2022, lithium battery companies raised a total of $15 billion across 127 deals with an average deal size of $12 million.
• In Q4 of 2021, 145 deals were made with a total of $15 billion averaging each deal at $10 million; therefore, it can be assumed that the end of Q4 in 2022 would also have high capital investments.

• Chinese lithium battery companies experienced the largest capital invested within the sector and raised a total of 54%, or $59 billion, since 2020.
• Lithium battery companies from North America had the second largest capital investment in the sector with 24%, or $26 billion, since 2020.
• Companies from other Asia countries such as Japan, India, and South Korea have also received notable capital deployment with a total of 11% of all funding in the sector.

• IPOs (initial public offerings) and PIPEs (private investments into public enterprises) have the largest capital invested in the lithium battery sector at 36%, or $39 billion, since 2022, which indicates that the sector is maturing and large deals are occurring.
• Mergers and acquisition deal types have the second largest capital investments with a value of 28%, or $31 billion, indicating high levels of consolidation in the market.
• Private equity at 21%, or $23 billion, and venture capital at 6% indicates that although deal types are bigger in the private equity sector, venture capitals still consist of deals as well suggesting the vast size of the lithium battery sector.

The Company

Redwood Materials is a USA-based private company that is a developer of sustainable battery recycling technology. Redwood technology specializes in recycling and commercializing batteries and creating a sustainable solution. Redwood’s technology facilitates waste to be processed and converted into battery cells. These cells can then be implemented in consumer electronics.

Most Recent Financing Status

• Redwood Materials raised $776 million based on a pre-money valuation at $3 billion of Series C venture funding in a deal on August 18, 2021.
• The round was led by T. Rowe Price. Eleven other strategic and financial investors participated in the round including Ford, Amazon, Goldman Sachs Asset Management, and Fidelity Investments.
• The funds will be used to expand the existing operations internationally and throughout North America.

The lithium batteries sector is critical for the future of the renewable energy market. The growth in demand for electric vehicles and household use of renewable energy has resulted in an expansion within the lithium battery sector, and a CAGR of 22%. Lithium batteries will continue to increase in popularity as the world shifts to more renewable energy. J&A forecast that the growth trends and investment in the sector will increase over the next decade making this a pivotal, high-growth industry.

Sources: Pitchbook Data, Inc.

Renewable Energy: Market Overview

Renewable energy is a rising sector and firms within the industry have experienced a 233% increase in capital raised between 2011 and 2021. With the continued focus on combating climate change and the transition to renewable energy, firms in the sector will continue to rise in importance within global capital markets.
This report provides a market overview of renewable energy from 2010 – 2022 and market size based on region and type of clean energy in 2020.

Renewable Energy

• The renewable energy sector may be placed into 4 key sectors; solar energy, wind energy, fuel cells and batteries.
• Wind energy is divided into two sections, onshore and offshore energy this is generated through wind turbines. Onshore wind achieved the largest market size in the renewable energy sector in 2020. The total market size was estimated at $51 billion. The offshore wind is another major industry within renewable energy with a market industry is approximately $14 billion.
• Solar energy involves the conversion of light into energy and involves photovoltaic panels. Solar energy is the second largest market within the sector with an estimated value of $31 billion.
• Batteries are a source of electrical power that stores and converts chemical energy to electrical energy. Batteries are a rapidly growing segment of the renewable energy market with a global estimated market value of $26 billion in 2020.
• Fuel cells help store electricity that is produced by renewable sources such as solar energy, onshore or offshore wind, and other renewable energy technologies.

• The battery segment is forecast to have the highest market size for clean energy technologies with $123 billion in 2030 and $169 billion in 2050, with $123 billion in 2030 and $169 billion in 2050. The market increase between the years 2030 and 2050 for batteries is forecast to be 37%.
• The onshore wind segment is forecasting significant growth between 2030 and 2050. The sector is expected to increase by 37% while offshore wind is forecast to decreasing by around 8%.

Renewable Energy: Market Breakdown

• Renewable energy experienced an increase in capital market activity in 2021 with $429 billion invested across the sector. A total of 7,863 transactions occurred in the sector with an average deal size of approximately $54 million.
• 2022’s data refers to the first 9 months of the year and 4,654 deals have been conducted with a total of $265 billion invested.
• The trend shows that investments in renewable energy capital market deals are rising, hence, suggesting an increase in investments more into this sector.

• Renewable energy firms from the USA have received the largest capital in the first three quarters of 2022 with 35% invested into the sector.
• Europe received the second largest capital deployment in the sector with renewable energy firms on the continent raising 34% of capital invested in the sector.
• Asian, Canadian, and Middle Eastern renewable energy companies have received 16%, 4% and 3% of capital in the sector in 2022 respectively.

• In 2022 the Asia Pacific region shows a market size of $62 billion dollars conveying that they have the largest market size for clean energy.
• Asia is seen to have the largest market size for clean energy due to the large value made toward the sector compared to other regions.
• Europe’s market size is USD33 billion making their value about half of Asia’s which emphasizes the high market size of clean energy investments in Asia.

• In 2030 and 2050 Asia Pacific is still estimated to hold the highest market share for clean energy based on the stated policies scenario.
• Asia Pacific is predicted to increase by 36.6% in market size from USD142 billion in 2030 to USD194 billion in 2050.
• Moreover, Asia Pacific has the highest percentage increase compared to other regions’ 2030 and 2050 numbers.

Renewable energy is growing rapidly especially in Asia Pacific. According to forecasts, Asia Pacific is expected to invest the most money into renewable energy and driving growth within the sector. Onshore wind had the higher market size in 2020 but the emergence of lithium batteries will drive the renewable energy sector. J&A forecasts continued growth within the renewable energy sector.

Sources: Pitchbook Data, Inc., iea.org.