A report from PriceWaterHouse Coopers has found world renewable energy deals rose 40 per cent to a record high of $53.5 billion last year from $38.2bn in 2010, as solar, wind and energy efficiency overtook hydro power as the main deal drivers for the first time.

Hydro power has traditionally dominated renewables deal flow, but deals worth $1bn or more in wind, solar, biomass and energy efficiency have outnumbered hydro by seven to one, the report said.

The renewables market is maturing, fuelling more consolidation and a rethink of the role of nuclear in many countries after the Japanese nuclear crisis last year provided an extra boost to renewables generation in certain markets.

The trend is all the more noteworthy given the uncertainty in the market and in government policies on renewables. We believe that deal flow will continue to be significant in the medium term.”said Paul Nillesen, PwC renewables partner.

But such numbers may be difficult to consolidate in the year ahead, quotes Reuters.

U.S. and European manufacturers will be under increasing cost pressures and some Chinese manufacturers will also face heavy debt and feel competitive strain.

Continued uncertainty about the eurozone economy will make the deal environment much more difficult for 2012. A deeper crisis would dampen deal flow further, but Nillesen said market uncertainty might not block the biggest deals.

“The potential for further destabilization domestically, or at an inter-governmental level cannot be ruled out, but if a deal is highly strategic, and mission critical, then parties will still feel it is worth doing on the right terms,” he said.

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