2012
January 11, 2012
The Pakistani Government has been in a state of crisis for the last few months with relations detoriarating between the civilian government and the generals. Note the Army in Pakistan led by the Chief of the Army Kiyani calls the shots with the civilian government a mere puppet in the defence and foreign relations department. The Government in Pakistan has been in chaos ever since Osama Bin Laden was captured from near the Army HQ in Rawalpindi. After the Army got a lot of flat from everyone, it decided to hit back at the civilians using a memo by the US Ambassador Haqqani which talked of an army coup.
January 11, 2012
USA Wind Energy in 2012 has got off to a flying start with the announcement of 3 new wind farms being announced. While BP and Sempra have announced 2 new wind farms with 560 MW capacity with $1 billion in investment ,a Spanish company will build a 189 MW wind farm . Note 2010 was not a great year for wind energy in the USA though 2011 was better . GE will be the Wind Turbine Company supplying turbines to the BP WInd Farms while Accionia wind turbines will be used by the Spanish company . Note there is a severe competition in the Wind Turbine space with the biggest wind company Vestas facing a possible bankruptcy or consolidation in the future. However wind farm developers are having a good time at the expense of the wind equipment companies as prices of wind turbines reach very low levels.
January 11, 2012
China's solar market growth has hit the rocket phase in late 2011 with the announcement of the long awaited national Feed in Tariff . Many of the Chinese utilties have set up large solar farms utilizing the cheap solar panels produced by Chinese solar panel companies. Note Chinese solar companies are the dominant players in the world having almost killed the western solar industry in the last couple of years. With cheap costs and massive government support, China is almost ruling the solar industry globally . In the domestic Chinese market they have even a bigger advantage given the local home conditions and preference of domestic companies . Note China become home to the biggest wind turbine companies when China enacted the domestic content requirements in 2006. With the solar industry , the Chinese government does not need this law as its companies already possess massive advantages over the foreign competition.
January 11, 2012
Green Jobs in India is going to grow at a high double digit rate driven by the Real Estate and Construction Industry. The hiring will be done by Real Estate Companies in India looking for Energy Efficiency and Green Building professionals. Note the Green Industry globally has had a torrid 2011 with most of the major sectors like wind, solar, biofuels and lighting facing oversupply amidst slowing demand due to global macro problems. However the Green Industry has a great fturue driven by secular drivers like
January 11, 2012
The rising income inequality throughout the world is sowing seeds of dystopia according to a report released by World Economic Forum. The biggest risk amongst the 50 risks listed is the increasing wealth gap between individuals in all countries. Gini's coefficient has risen in most countries developing as well as developed and this has a strong correlation to globalization. The global artitrage of labor has tilted the scales towards capital and increasingly made wages become stagnant. Developing countries with weak institutions are showing income inequality in horrific forms with $2 billion homes existing in the middle of millions surviving on less than $2 day. US has already seen the OWS movement as a result of this increasing income gap between the have and have nots. Middle Eastern countries have also seen revolutions brought upon by the massive riches of the elite compared to the rising poverty of the poor and even the middle classes.
January 11, 2012
Green Industry in US continues to flourish despite the general apathy towards global warming from a significant section of the population and parties. USA is the hotbed of green innovation despite stiff challenge by China which is spending billions of dollars to become the No.1 in Green Industry and Technology. US has the lead in Fuel Cell Technology with a number of top companies like Fuel Cell Energy, Bloom Energy. Now a start up ClearEdge Power has got one of the biggest fuel cell orders in the world worth $85 million from Austria's Gussing Renewable Energy. The deal calls for supplying of 50 megawatts of power by the year 2020.
January 11, 2012
Train Accidents in India are starting to happen with surprising regularity with hardly a month passing by without a major collision or accident. Small accidents seem to be happening every day with news report of a collision not generating any mindshare these days. Road Accidents in India too happen with great regulatiry with some estimates of 1000 Road Deaths happening in India every day . This is due to government and people apathy towards safety regulation and following of laws and norms. It is just not resticted to trains but encompasses the entire system such as fire safety etc. Without a major change in the people attitude towards safety regulation expect such accident and waste of human life will continue to happen.
January 11, 2012
Europe which has been one of the greenest regions on earth in terms of promoting green energy and reducing carbon emissions is set to face a severe test. Europe is going to impose a Carbon Tax on Airlines flying into the region from 2012 . This has got the other major countries seeing red, with most of them planning retaliation. This Green Tax will add around $3 billion per year in terms of extra fees from airlines or around $6 per extra passenger. While airlines from USA and Canada approached the court, airlines from India and China are refusing to pay the tax outright. Indian airlines won't supply their carbon data while China won't pay the taxes . Note European Union is isolated in this fight against climate change . Though Carbon Trading is not a perfect system and open to abuses, at least it makes a pretense to fight global warming. On the other hand,these other countries have no plan or intention to fight climate change.
January 11, 2012
Europe has got the largest installed capacity of wind and solar energy due to the proactive policies enacted by the governments there.However the renewable energy industries have not been left unaffected by the European debt crisis. Offshore Wind Energy is a European development with most of the major offshore wind power farms located in Germany and UK. France which is tendering for 5 GW of offshore wind energy farms has seen reduced bank interest according to Areva. Offshore Wind Energy grew by more than 50% in 2010 and is expected to continue at above 50% growth rates over the next several years as the global installed offshore wind capacity multiples by more than 25 times over the next 10 years.
January 10, 2012
The Indian government has allowed 100% Foreign Direct Investment (FDI) in Single Brand Retail Stores up from 51% earlier. Note earlier the government had tried to raise the investment limit in multi brand retail which would have boosted Wal-Mart, Tesco and others which have been trying to get into the lucrative Indian market for a long time. However stiff opposition from a number of Indian political parties had scuttled the move .The government has however moved in the Single Brand Retail which is not as contentious and poses as big a risk to the millions who work in India's massive Retail Industry.
January 10, 2012
The Indian Desert State of Rajasthan in the West which borders Pakistan is planning to set up four gigawatt scale solar parks in 4 districts of Jodhpur, Jaisalmer, Bikaner and Barmer. Note under the first 2 phase of JNNSM , Rajasthan has got the lion's share of the solar farms being constructed. The reasons why Rajasthan has managed to corner 80% of the JNSSM solar projects is because
a) Solar Radiation is the highest in the country
b) Land is cheap and plentiful in the state with the government literally given them for free to solar developers. A huge plus in a country where land acquisition is a big industrial problem
c) Support from the government
January 10, 2012
The massive solar panel glut has not only caused Western solar companies to go bankrupt but has also caused mayhem in the Chinese solar panel industry.Many of the smaller companies have seen their utilization go down to 35% or lower with many of the others shutting down their production entirely.There are hundreds of small solar companies in China which started during the 2010 boom when global solar demand increased by more than 150% . However their small scale of operatoins and lack of brand power means that they are bearing the brunt. While the large Chinese solar panel producers have seen their utilization go down , most will survive given the support from Chinese Banks. For example LDK despite its more than $3 billion in debt and losses is still getting loans from Chinese Development Bank. But the smaller Chines OEM panel makers don't have the government sugar daddy behind them.
January 10, 2012
Philips and Siemens ,2 of the largest European conglomerates with big Green divisions as well have warned of Dire Macroeconomic problems in Europe.While the stock markets continue to go higher, both companies have cut/ warned profit forecasts on European economic headwinds. Siemens is the largest green company in the world while Philips is one of the biggest Lighting Companies .
January 10, 2012
Mahdindra Solar One a JV between India's biggest conglomerates the Mahindra Group and a PE backed startup Kiran Energy is setting itself to become one of the biggest players in India's Solar Energy.Mahindra Group which has dominant Indian companies in the Automobile Industry,Information Technology has set up 3 subsidiares to operate in the following segments
January 9, 2012
Solar Trade Wars are becoming the norm in the globe these days with the major one between USA and China.The instigator is the German solar company Solarworld which helped started the ITC Case in the USA.India too is thinking of putting some kind of import duty to protect its domestic solar panel producers which are dropping like flies.Chinese solar panel producers have swamped the world with super cheap solar modules.Though a part of their low prices can be explained by competitive advantage, another part is due to the labor,capital subsidy given by the Chinese government.It would not take a rocket scientist to say that some of the biggest Chinese solar companies are insolvent and would be dead within a month without Chinese state loans.
January 9, 2012
Bank of America had already announced thousands of job cuts earlier.Today it cut 20% of its Asian MDs as it tries to cope with the sinking of investment banking revenues.Other investment banks like RBS,Nomura,BNP Paribas,Societe Generale are also cutting jobs with a vengeance.Goldman Sachs also announced big time salary cuts for its partners and fixed income trading.
January 9, 2012
Saving bankrupt solar companies has become the national pasttime of most governments it seems.Competition in the solar market has become so severe that solar comapnies are failing left and right.This has made the government come out to save them with bailouts which only make the oversupply situation in the solar panel industry worse.While China is the worst culprit supporting hundreds of failing solar companies through cheap loans which will be never paid back,other governments are not far behind.
January 9, 2012
Solar Renewable Energy Certificate (SREC) Prices in New Jersey have been falling at a sharp rate from a high of $600 to $225 as high returns from falling solar panel prices and other tax breaks.This has led to a massive growth in solar installations in the state making it the 2nd largest state by solar capacity.New Jersey installations have crossed 500 MW and made it a huge green job driver in the state.However this boom has made the market driven SREC prices fall quite sharply.Though not falling as sharply as Pennsylvania where SREC prices have become a joke ,they are still low and falling.
January 9, 2012
Solar Power in India is growing by leaps and bounds with the federal and state governments heavily promoting solar energy production.India is set to become a gigawatt market in 2012 with around 400 MW already installed by 2011.The ancillary industries around the main solar power market are set to grow at a rapid clip as well.One of the unlikely sectors in solar products in India is the growth of solar cables.Note solar power plants require a lot of wire and cabling to connect thousands of solar panels to each other and to solar inverters.Besides solar power plants also require interconnection with the power grid.While today most of the solar cable is imported from outside,there is potential for a solar cable manufacturer to build a domestic capacity as well given the rapid growth expected in solar power.
January 9, 2012
However distribution into the millions of villages remains the biggest hurdle even if the people there can afford the products.T here are no good roads and the smaller solar companies lack the marketing muscle of say a big MNC like Hindustan Lever and ITC.People have tried to sell solar products using the microfinance companies but have not had much success as of now.India's government has also pushed some small subsidy schemes but the red tape and the off and on nature has meant failure.
January 9, 2012
Note blatant pump and dump IPO's have made the Indian market a heaven for stock market operators.Despite this going on for years,only recently SEBI has taken some steps against the manipulartion of the primary market.Now SEBI has taken some steps in the Insider Trading case as well by fining executives of JP Associates and Ranbaxy both of which are constituents of the Indian main stock market index. However a mere fine will not do to deter insider traders.A big jail term for a insider trader will make white collar criminals think more in indulging in criminal activity rather than small fines .
January 9, 2012
Coal Stealing and Pilferage by the Coal Mafia has always been done on a massive multi million dollar scale. In the coal rich states of Jharkhand, Bihar, West Bengal and Chattisgarh, Stealing of Coal is a major illegal industry. Everyone knows about it and nothing is done as most officials and politicians get a cut of the illegal gains. Corruption in India is institutionalized as governing bodies remain weak and powerless. Despite India's much touted growth story,all these needling problems have contributed towards the Indian GDP slowing down sharply. Unless governance is improved,its tough to see how India can achieve its potential.
January 9, 2012
Note one of the main dangers of nuclear energy is the probability of the fuel getting into the hands of terrorists and rogue nations which can use it to make nuclear weapons.Note the fears of a Taliban like group getting their hands on nuclear arms in Pakistan is all too real.With Iran getting nuclear weapons,this will increase.Nuclear Power is already being phased out in Germany,Japan,Switzerland after the Fukushima nuclear disaster.The dangers of nuclear energy are too great to make it an option to secure mankind's energy in the future.Despite the advantages of nuclear power,the risks are too great to be played with.
January 9, 2012
Indian Solar Panel Companies are asking for protection from cheap imports from China and other countries.Note the prices of solar panels have fallen by 60% in 2011 due to a number of reasons such as cheap raw material polysilicon prices,high competition between major module manufacturers,dropping processing costs.The biggest reason for the solar panel price crash has been the support of the Chinese and other Asian government to their respective domestic solar industries.
January 7, 2012
Japan which has faced two of the worst nuclear accidents in history,the atomic bombing in WW2 and the Fukushima disaster,is thinking of nationalization of the nuclear industry.This comes after the fallout of the Fukushima,where the utility TEPCO needed a massive bailout.To pay compensation and repair the disaster would have bankrupted TEPCO and still left a massive hole.The Japanese government had to step in with a big money package so that TEPCO could meet its liabilities.Note the biggest disadvantage of nuclear power is the catastrophic tail risk of a nulcear meltdown.
January 7, 2012
Financial Jobs are being let go in the tens of thousands by European and USA Financial Institutions. The Financial Industry has become too huge as a percentage of the global economy with any value creation to say something like the IT industry. The share of the market cap of the stock market had become too high during the boom boom years of 2008 and it is continuing to go down.Despite the best (some would say the worst) effort of the governments to prop up the Too Big to Fail Banks,jobs are being let go as there is not enough work. European Banks are shrinking their balance sheets as they are too leveraged and insolvent. Without the ECB crutch,almost all of them would go under.
January 7, 2012
Wind Turbines are generally considered safe and reliable though there have been cases of Blade Cracks and Falling.However the recent cases of Wind Turbine Explosions and 15 feet blades flying off have generally been not seen before.With 112 mph winds,the extreme stress cases of wind turbines were tested in UK recently.The gale like conditions led to some of these wind turbines failing.While a couple of wind turbines burst into fire some of them saw their 15 ft blades flying off.This is not to say that wind energy is dangerous,just that extreme nature conditions can lead to accidents for solar panels and wind turbines as well.
January 7, 2012
power projects.See below for the problems besetting India's thermal power project developers.Note wind and solar power projects are seeing more interent from debt syndication lenders like IDFC,IL&FS because of 2 reasons
a) Strong support from state and federal governments which are going all out to support Renewable Energy through tax breaks,feed in tariffs,capital subsidy
b) Secure Power Purchase Agreements (PPA) by NVVN at even higher prices for green energy
c) No problems of fuel supply availability that plagues the coal and gas power plants in India
d) Lesser Environmental issues that beset the Coal Power and Nuclear Power Plants in India with local agitations
e) Land Acquisitions problems are also lower as solar and wind power plants don't require prime land
January 7, 2012
Reliance has a massive balance sheet which is has used strategically to acquire 4G spectrum (Infotel) and content.The company had revolutionized the telecom space through the Monsoon Hungama campaign when it had provided super cheap telecom mobile plan with handsets. It could do the same in the Internet space through providing super cheap Talbelts like Aakash with super cheap broadband plans on 4G. It already has content to provide its subscribers.Note broadband companies in India provide poor service at high rates, so Reliance can takeover the broadband space in India easily if it executes right.
January 7, 2012
The German Solar Energy Market is biggest in the world and has installed the largest number of solar panels for the last few years.2012 promises to be no different with Germany again set to the biggest solar market for solar panel manufacturers though Italy would give good competition.The German Solar Subsidy program has been the best in the world unlike the start and stop feed in tariff programs of Spain,Czech,UK,Australia and other places.A stable step in cut of feed in tariffs has helped solar energy prices coming down by more than 50% in the last few years though demand has only increased.