'Kyoto Effect' boosts European renewable energy company stocks

Share prices of renewable energy and low-carbon energy technology companies quoted in countries that have signed Kyoto outperformed those of companies quoted in countries that did not sign Kyoto by up to 35% in Q1 2005.

New Energy Finance's Global Energy Innovation Index (GEIX) has completed the first quarter since its launch. Although as a whole the GEIX is up only 0.25% since the beginning of the 2005, closer analysis shows a very significant 'Kyoto Effect'.

The 20 constituent companies of the GEIX which are quoted in countries that signed the Kyoto Protocol are up by an average of 21.9%. By contrast, the 30 GEIX constituents quoted in the USA and Australia, which did not sign the Kyoto Protocol, are down by an average of 13.3%.

The GEIX tracks the performance of the largest 50 pure-play quoted renewable and low-carbon energy technology companies worldwide.

Highlights from the GEIX's performance over the first quarter of 2005 are as follows:

- Overall, the GEIX was up just 0.25% at the end of the quarter. In the same period, by comparison, the Nasdaq was down 9.3% on general technology sentiment, and the Amex Oil Index was up 15.0% on the back of high oil prices.

- Performance of GEIX constituents quoted on stock markets in Kyoto signatory countries was as follows: Frankfurt (4 companies) +52.7%; AIM (7 companies) +28.3%; Copenhagen (2 companies) +19.5%; Toronto (5 companies) +7.3%

- Performance of GEIX constituents quoted on stock markets in non-Kyoto signatory countries performed as follows: Nasdaq (24 companies) -13.8%; Australian Stock exchange (4 companies) +4.2%

- Leading sectoral growth were the 5 Biomass and Biofuels businesses in the GEIX, with average performance of +34.9%, closely followed by solar with +33.0%

- Poorest performing sectors were Fuel Cells / Hydrogen with a drop of 13.6%, and Efficiency Breakthrough with a drop of 16.7%

- The quarter saw the second-largest ever IPO of a pure-play new energy company, Conergy AG, which completed a EUR 243m float in Frankfurt in March. Conergy is now trading around 30% up on its IPO price with a market capitalisation of around EUR 695m (GBP 480m / USD 900m). The largest ever IPO in renewable or low-carbon energy technology was Ballard Power Systems Inc, the Canadian fuel cell company, which raised USD 341m on NASDAQ in February 2000.

- Other IPOs (or reverse IPOs) of renewable energy companies worldwide during the quarter included Solartron Co Ltd (Solar/Bangkok), Reinecke & Pohl Sun Energy AG (Solar/Frankfurt), Renewable Energy Holdings (Wind/AIM), Intelligent Energy Inc (Fuel Cells/NASDAQ), MCC Energy Plc (Various/AIM) and Voller Energy Group Plc (Fuel Cells/AIM).

"It is too early to tell whether the very marked 'Kyoto Effect' is a one-off, or whether it will drive a sustained divergence in the value of new energy stocks in Kyoto and non-Kyoto countries. It does indicate, however, that Kyoto has improved the prospects of European renewable energy technology companies vis-a-vis their US counterparts," said Michael Liebreich, CEO and founder of New Energy Finance. "Despite this, we are still seeing more energy technology startups being created in the USA than in Europe because there is such a strong entrepreneurial culture there, so the game is by no means over."

For further information, please see attached article from this week's New Energy Finance Briefing, or contact Michael Liebreich on +44 20 7727 8590 or mailto:michael@newenergyfinance.com.

<< File: New Energy Finance - GEIX Q1.pdf >>

About New Energy Finance
New Energy Finance is a specialist provider of news, data and analysis to investors in the renewable energy and energy technology sectors worldwide. It is based in London and headed up by Michael Liebreich. The New Energy Finance Briefing newsletter contains a summary of all the news from the industry as well as features, analyses and an update of the Global Energy Innovation Index (GEIX). The New Energy Finance Desktop which is the industry's premier source of fnancial information, containing a full news archive, details of nearly 6000 organisations, 3000 individuals and 2000 investments, all updated in real time. New Energy finance covers all types of investment activity, including venture capital, public markets, M&A and project finance, and all types of renewable and low-carbon energy technologies.

About Michael Liebreich
Michael Liebreich is founder and CEO of New Energy Finance. He is a serial entrepreneur, having founded, funded or helped build more than 25 media technology and business services. He has worked as a venture capitalist with Group Arnault, was Deputy Managing Director of Associated Press Television and Director of Sports News Television and Interactive Investor. Michael has a Masters of Arts in Engineering with First Class Honours from Cambridge University, and an MBA from Harvard Graduate School of Business, where he was a Baker Scholar and Harkness Fellow. His interest in energy goes back to his undergraduate years, when he won the Cambridge University Ricardo Prize for Thermodynamics. Michael speaks fluent German and French, and good Spanish. He represented Britain in the 1992 Albertville Olympics in skiing.

About the GEIX
The GEIX is intended as a currency-neutral way of summarising the performance of quoted companies in renewable energy and energy technology. It is based on the market performance of the 50 largest companies quoted around the world which derive at least half of their market value from activities in sectors covered by New Energy Finance. For definitions of the sectors, see http://www.newenergyfinance.com/NEF/HTML/Sectors.html. The GEIX contains companies in seven countries, quoted on ten different stock markets. Companies quoted only on over-the-counter markets are excluded. The aggregate market capitalisation of the companies in the index on 1 January 2005 was USD 14.0 billion. Weighting is based on market capitalisation on that date, with no cap. No attempt is made to balance the GEIX's exposure to different markets, currencies or sectors. The largest sectors represented, by numbers of companies on 1 Jan 2005, were Efficiency Breakthrough (12 companies), Fuel Cells (10 companies), Electricity Storage (7 companies) and Solar (6 companies). Biomass and Biofuels together account for 5 companies.The GEIX does not represent the returns available to any particular investor due to currency fluctuations, available float, dividend policies and other factors. It is calculated on the basis of movements in the total market capitalisation of each company from the beginning of the reference period in the currency of the main market on which it is quoted. Share prices, numbers of shares and information about rights issues, exercise of warrants etc are taken from the main market on which each company is quoted and where a company is quoted on multiple markets, the share price used is that from the market we judge as offering most liquidity. No adjustment is made for management or other options outstanding. The value of the GEIX was set at 1000 on 1 January 2005. New Energy Finance relies on publicly available information on constituent companies which it selects and manipulates with resonable care. New Energy Finance does not guarantee that calculation of the GEIX does not contain errors and accepts no liability for investment decisions taken as a result of the information provided.

Michael Liebreich
CEO & Founder
New Energy Finance Ltd
Unit 225 Canalot Studios
222 Kensal Road
London W10 5BN
tel: +44 (0)20 7727 8590
fax: +44 (0)20 7727 8596
email: michael@newenergyfinance.com

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