GLObaL PROSPECTS FOR aLTERNaTivE ENERGy REMaiN bRiGHT
Although the global financial crisis stalled the rapid advance of the alternative energy sector, its long-
term prospects remain bright—fueled by favorable political, social and economic trends.
Prior to the financial crisis, revenue growth among alternative The rising global energy demand.
energy companies was thriving, as global revenues for solar
photovoltaics, wind power, and biofuels grew from $75.8 Even with the global recession, world population growth and
billion in 2007 to $115.9 billion in 2008.1 At the same time, rising living standards are expected to translate into higher
investment in energy technologies, including venture capital global demand for energy. Global primary energy demand is
and project finance, was on the rise. predicted to rise 50% between now and 2030, with more than
80% of that demand coming from developing countries, such
Today, a weak global economy, lower crude oil prices, and a as India and China.2
prolonged “flight to quality” on the part of investors have hit
alternative energy companies particularly hard. “Despite these A scarcity of accessible oil.
near-term difficulties,” says Jens Peers, lead portfolio manager
of the Calvert Global Alternative Energy Fund, “we see a While the recent decline in oil prices may have dampened
favorable business landscape beginning to emerge for various the sense of urgency over diminished supplies, data show
segments of this sector—including wind, solar, hydropower, that 54 of the 65 largest oil-producing countries have begun
fuel cells, and energy conservation.” to experience a decline in oil production.3 As a result, the
development of biofuels and advances in transportation
Peers sees tremendous growth potential for the sector, technologies, such as those used in hybrid vehicles, appear
resulting from a convergence of favorable political, social, and increasingly attractive.
economic forces. For instance, “green investments” are a key
component of major stimulus programs in the United States, The growing investment in new energy
China, the European Union, and the United Kingdom. technologies.
New alternative energy technologies are likely to play a
Five Key Trends growing role in bridging the energy supply-demand gap, while
curbing carbon impacts. For instance, experts estimate that
Looking ahead, Peers and Calvert believe the following five making the electric grid even 5% more efficient would mean
trends will help propel longer-term growth in the alternative savings equal to the elimination of greenhouse gas (GHG)
energy sector: emissions from 53 million cars.4 Of the total venture capital
ProjEctEd incrEASE in world mArkEtEd EnErgy conSumPtion by rEgion From 2005 – 2030 (Quadrillion British Thermal Units)
Between 2005 and 2030, global energy demand is projected to increase by 50%—with more than 80% of that demand coming from emerging
economies, namely China and India.
AvERAGE AnnuAL PERCEnT
REGIon 2005 2010 2015 2020 2025 2030 ChAnGE 2005 - 2030
oEcd 240.9 249.7 260.5 269.0 277.6 285.9 0.7
north America 121.3 126.4 132.3 137.8 143.4 148.9 0.8
Europe 81.4 83.9 88.5 86.8 90.4 92.0 0.5
Asia 38.2 39.3 41.4 42.7 43.7 44.9 0.7
non-oEcd 221.3 262.8 302.5 339.4 374.2 408.8 2.5
Europe and Eurasia 50.7 55.1 59.5 63.3 66.0 69.1 1.2
Asia 109.9 137.1 164.2 189.4 215.3 240.8 3.2
middle East 22.9 26.4 29.5 32.6 34.7 36.8 1.9
Africa 14.4 16.5 18.9 20.9 22.5 23.9 2.0
central and South America 23.4 27.7 30.5 33.2 35.7 38.3 2.0
total world 462.2 512.5 563.0 608.4 651.8 694.7 1.6
The Organisation for Economic Cooperation and Development (OECD) is comprised of economically developed countries, including the United
States, European countries, Australia, and Canada. It promotes economic and social welfare throughout the OECD area.
Source: Energy Information Administration (EIA), International Energy Annual 2005 (June-October 2007), http://www. eia.doe.gov/iea.
Note: Totals may not equal sum of components due to independent rounding. Projections: EIA, World Energy Projections Plus (2008).
investment in the United States in 2008, 11.8% was related to Consider an Allocation to
energy technologies, up from just 0.6% in 2000.5 Alternative Energy
Climate change. In view of these converging trends, and with alternative
energy stock prices driven to attractive levels due to the
Today, there is broad scientific, public, and business consensus market correction, now may be a good time to consider
about the potentially catastrophic impact of climate change. adding alternative energy exposure to your portfolio’s equity
The Investor Network on Climate Risk, a coalition of 70 allocation. “Including alternative energy companies can
institutional investors managing $7 trillion in assets, has enhance overall portfolio returns by providing investors with
persuaded some two dozen Fortune 500 companies to improve access to a new, potentially high-growth set of companies,”
their climate policies, practices, and disclosure.6 says Peers. On balance, while alternative energy stocks
represent higher return potential, they also involve higher risk
A changing regulatory landscape. potential.
While policy changes favoring renewable energy are taking Navigating the companies in this relatively young sector
hold in the United States, these issues are already high on should be done with the help of investment professionals
the international policy agenda. A longtime green-energy skilled in assessing the financial strength, competitive
leader, the European Union recently affirmed its 2020 target advantages, and future growth prospects of these unique
calling for a 20% reduction in carbon emissions. These companies. KBC Asset Management, the sub-advisor of
global initiatives are likely to help make alternative energy Calvert’s Global Alternative Energy Fund, as well as Calvert’s
significantly more competitive in the period ahead. Global Water Fund, is a leader in the alternative energy field.
It has been investing in alternative energy since 2000 through
the KBC Eco Alternative Energy Fund (available in Europe).
The Calvert Global Alternative Energy Fund (CGAEX) is an all-
market-cap, alternative energy sector mutual fund that invests
in a globally diverse selection of companies.
To read our white paper, “A Bright Future for Alternative Energy,” and for information about
Calvert Global Alternative Energy Fund, visit us online at www.calvert.com.
Financial advisors: Our recent webinar on alternative energy featuring Jens Peers is available
online in the Financial Advisor section of www.calvert.com.
1. Clean Energy Trends 2009, March 2009, CleanEdge.
2. Energy Information Administration (EIA), World Energy Projections Plus (2008).
3. Association for the Study of Peak Oil&Gas, “The Oil Supply Tsunami Alert,” by Kjell Aleklett, http://www.peakoil.net/Oil_tsunami.html.
4. Department of Energy, “The Smart Grid: An Introduction,” http://www.oe.energy.gov/smartgrid.htm
5. Clean Energy Trends 2009, March 2009, CleanEdge.
6. Calvert is a member of The Investor Network on Climate Risk.
A Word About the Risks. Calvert Global Alternative Energy Fund is subject to the risk that stocks that comprise the energy sector may decline in value,
and the risk that prices of energy (including traditional sources of energy such as oil, gas, or electricity) or alternative energy may decline. The stock
markets in which the Fund invests may also experience periods of volatility and instability. In addition, shares of the companies involved in the energy
industry have been more volatile than shares of companies operating in other more established industries. Consequently, the Fund may tend to be more
volatile than other mutual funds. Lastly, foreign investments involve greater risks than U.S. investments, including political and economic risks and the
risk of currency fluctuations.
For more information on any Calvert fund, please contact your financial advisor or call Calvert at 800.368.2748 for a free prospectus. Institutional
investors call 800.327.2109. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before
investing. The prospectus contains this and other information. Read it carefully before you invest or send money.
Calvert mutual funds are underwritten and distributed by Calvert Distributors Inc., member FINRA, a subsidiary of Calvert Group, Ltd. 800.368.2748.
Calvert funds are available at NAV for RIAs and Wrap Programs. Not all funds available at all firms. #9139-200906