A report from the Financial News website said private equity firms were now putting their focus on deals that would extract and produce fossil fuels and away from renewable energy projects. The move was spurred by large discoveries of shale gas in the US which have reduced energy prices and placed pressure on the returns provided by investments in renewable energy.

According to report, the strategy was a reversal of private equity firms which had pumped money into renewable energy infrastructure projects after the credit crisis. Companies like the Blackstone Group, Terra Firm and Kohlberg Kravis Roberts had invested in renewable energy businesses that focused on wind farm developments in Germany and solar plant projects in Spain and Italy two to three years ago. Back then, the traditional energy sectors posted few buyout deals.

However, the report said the energy market has experienced a shift. The focus has now been placed on energy security and more affordable energy bills as the immense shale oil and gas reserves were found in the US. European governments which had struggled with the weight of heavy debts had also taken out their support for solar and wind power developments. As a result, businesses were now left to fend for their own.

Brett Johnson, a Partner at Pantheon funds group, told Financial News, "The shale gas revolution and the amount of supply that has come on to the scene, and subsequent lower prices in natural gases have just made it fundamentally challenging for alternative sources of energy to be competitive, absent any government support or subsidy."

Private equity firms have felt the shift in their efforts to raise funds. Citing figures from data company Preqin, the report said private equity companies that had placed investments in natural resources were able to raise USD 22.5 billion last year compared to the USD 6.8 billion they gathered in 2011. Meanwhile, private equity companies that poured investments in clean technologies were only able to raise USD 2.8 billion last year compared to the USD 6.1 billion they were able to gather in 2011.