Blog
September 16, 2010
The Competition in the Battery Segment of Energy Storage keeps on increasing with entry of new players.While established players like LG Chemicals,Panasonic are increasing capacity,there has been a raft of new startups and biggies entering this segment.Toshbia,NEC,SK Energy,Sumitomo,Samsung SDI everyone wants a piece of one of the fastest growing segments of the Electric Vehicle Sector.This has already led to a supply glut leading to a decrease in ASPs.A123 Systems has recently opening a huge factory manufacturing Lithium Cells in Michigan with the help of US government grants.With Obama aiming to capture 40% of the EV Market by US companies,more such factories are expected to come online resulting in a further supply demand mismatch.China also wants to create national champions in the Clean Transport Sector and has line up huge subsidies as well.
September 16, 2010
Algae Based Biofuels as a Green Investing Opportunity is still some years away as the technology is still quite nascent.Despite a lot of hoopla and a number of IPO's with synthetic biofuels as business,large scale commercial production and profits are still some time away.However the promise of this technology to revolutionize the Fossil Fuel powered Transportation Sector is Huge.Large Oil and Gas is already positioning itself in a small way to take advantage of this opportunity.Shell has been the biggest investor in Biofuels with a $12 Billion tie up with Brazilian Sugar Giant Cosan.Valero has also smartly invested in a number of biofuel startups despite being one of the strongest opponents of Green Energy.Exxon has only promised huge investments without investing much till date.
September 16, 2010
Organization of the Petroleum Exporting Countries (OPEC) on its 50th Anniversary has called the Developed Nations Subsidies as "Unfair" and has referred Alternative Energy as the biggest challenge facing the Rich Oil Exporting Nation Cartel.OPEC is being a huge hypocrite as Fossil Fuels Subsides totalled $550 Billion last year which is almost 12x the Subsidies given to Green Energy.However no mention of this fact was said as these Green Subsidies were "not acceptable" OPEC.The OPEC Chief Abdalla el-Badri wanted a level playing field with this nascent Green Energy.OPEC is a 12 Nation Club formed mostly of Middle Eastern Nations who control 80% of the Global Oil Reserves and 33% of the Production.Saudi Arabia is the non-official leader of this Cartel and has been known for its opposition to Climate Change efforts.The other nations too support Saudi Arabia recently blocking a group of Poor Island Nations from accessing climate change data.These Nations have shockingly asked for Aid as Global Warming Concerns reduce the Fossil Fuel Demand.Most of the Middle East Exporters are filthy rich generating huge amounts of cash from the Export of Fossil Fuels.
September 15, 2010
Shady Management - Income Tax Raids on the company and its promoters found $1.3 million in unaccounted cash and jewelery,cash and documents were impounded.The promoters have been accused of falsifying accounts,evading tax and Registrar of Companies (ROC) and Service Tax Department have also served notices.
Expensive Valuation - The company will come out with a valuation of P/E of 30-32x which is more expensive than other listed education companies.At least Prakash Steelage with a corrupt management had the decency to come with a discount
Summary
The only thing to like about this company is the sector that it operates in.However Shady Management,Super High Valuation and Regulatory Risk makes this company a strictly no subscribe.However given the shenanigans being openly perpetrated in the Indian Stock Market don't be surprised to see a 100% Listing Gain.
September 15, 2010
Sumitomo entered the Wind Energy Business in the US by buying a 42.5% stake in Stanton 120 MW Wind Farm in Texas.The Company already has Wind Assets in Japan and is partnering with Giant Chinese Utility Datang for building Renewable Energy Assets in China.Sumitomo has already built a 50 MW Wind Farm in Inner Mongolia with Datang and Kyushu Electric.Sumitomo is already strong in constructing geothermal plants having built a 140 MW Nga Awa Purua Geothermal Plant in New Zealand in 2 years flat.It also has contracts to build upto 530 MW of Geothermal Plants in Indonesia.In Phillipines the Company has partnered with another Japanese Trading Powerhouse Marubeni to finance Biomass and Waste to Energy Plants.However Solar Energy is strangely missing from Sumitomo's strategy.It activity till now has been restricted to some small PV plants in Spain and trading of Solar Panels made by Sharp and others.Note other Global Conglomerates like ABB,GE,Siemens,LG,Samsung are in the process of making massive investments into the Green Industry.
September 15, 2010
Note this Hydro Plant will cost around $31 Billion which is quite costly at $15/watt if the the $31 Billion is used for the 1800 MW capacity.This is is almost 15x the cost of a typical Hydro Capacity and would need massive subsidies.Papua New Guinea is a poor country and might receive aid from Australia but the $31 Billion would make even the richest country balk at this price.Australia is not exactly energy deficient with massive resources of coal,wind and solar energy.In Renewable Energy the country has been quite slow with provinces like NSW and South Australia promoting renewable energy through regional subsidies.Hydro Power is the main source of Clean Power accounting for 90% of the Clean Energy Mix.The Project will take 10 years to build and their remains an outside chance that Oil Prices become so high that 24 hr Hydro Power at that time might make sense at $15/watt.
September 15, 2010
The Indian Stock Market is consistently making new highs as Foreign Money Surges into India it its hunger for yield.FIIs this year have invested almost $15 Billion into the Stock Markets as Indian Economy grows at a rapid 8%+ growth.Along with Thailand,Malaysia,Indonesia and other emerging markets,Indian Stock Markets are approaching Bubble Territory of the late 2007 and early 2008 days.Substantial Risks are being ignored by the Herd Mentality of Portfolio Managers who are lapping up India's Growth Story.Domestic Money on the other hand has been very circumspect during the last 1 year.Domestic Mutual Funds have become aggressive sellers in the last leg of this rally while Retail Investors are Bailing out Enmasse.
Retail Investors have sold around $2.5 Billion of Stocks in the last 1 year when the Stock Market has catapulted by almost 25%.This is one of the strangest bull markets as Indian investors remain largely skeptical of this rally.
September 15, 2010
India has started a Renewable Energy Certificate (REC) Scheme recently to boost the share of Clean Energy Sources in India’s Electricity Mix.India’s Electricity Regulator (CERC) has […]
September 15, 2010
While Solar Energy is a new kid on the block,Wind Energy has been growing very strongly in the past Decade.Italy was rethinking its Renewable Energy Certificate (REC) Scheme to remove price guarantees but at the last minute it changed its mind.Wind is being installed at a rate of 1 GW per year in the last few years.The Italian Mafia has latched onto this lucrative business muscling their way in.The Sicilian Mafia is said to own a large portion of the country Wind Farm Assets and the $1.9 Billion Seizure of assets from a high flying businessman is proof of this.43 Companies mainly operating in the Solar and Wind Segments were seized by the state in one of the biggest swoops against Organized Crime.Wind Turbines involve acquisition of land,local permits and subsidy grants which require a lot of organization and local clout.The Sicilian Mafia is uniquely place to control and organize the setting up of Wind Farms.With a government guaranteed return of Euro 18c/KwH,the Wind Subsidy in Italy is one of the highest in the world.Compare this to the Rest of the World where Wind Subsidies get around $0.10/KwH.Note Criminals have not only been involved in Italy,but there are also reports of nefarious activity in Renewable Energy in Bulgaria,Spain,Canary Islands etc.
September 15, 2010
With Every Country wanting to Use Exports to get out of their Tough Fiscal Situations,it does seem that Currency Manipulation will become a mainstream activity.Gold and Silver are already touching new highs and with countries hell bent on competitively devaluing their currencies,expect the precious metals to go even higher.
September 14, 2010
Czech is a Poster Boy of how not to implement a Feed in Tariff Scheme.While other countries like Spain,Greece have also faced Solar Booms,the Czech Bubble compared to the size of its Economy has been spectacular.The removal of Tax Benefits will further lower the returns for Green Investors which should probably eliminate the make the Czech Renewable Market next year.
September 14, 2010
Global Imbalances back to pre-Lehman Days Global Imbalances are growing deeper by the day as the world returns to its unsustainable pre-Lehman days of Unbalanced Trade.Trade […]
September 14, 2010
Why would anyone want to invest in such a sorry stock is beyond me but I have seen even worse companies list so don't get surprised.The company is basically is using all the investor's money to become a decent business.Its current business with less than $1 million in fixed assets and $500k in profits is not worth putting money into.So if you are a super high risky investor then this stock would make sense for you.
September 14, 2010
Greece has a totally confused Green Policy just likes it General Economic Policy.The Parliament had taken a go at simplifying the bureaucratic mess by eliminating permits and approvals for small plants below 500 KW.However 6 months have passed without much progress.Greece needs to do a comprehensive overhaul of the Green Subsidies.The Solar and Wind Costs have fallen greatly in the interim so it needs to reduce the FITs to normalize the returns.Otherwise it might repeat a Spanish/Czech Renewable Energy Boom and Bust.
September 14, 2010
20 GW of Capacity is expected to be built by 2010 end in China up from around 10 GW in 2009.Fierce Competition in the Wind Turbine Market has led to increasing distress for smaller players.Sinovel the biggest Wind Turbine maker which sold 3.5 GW in 2009 has been using price as a weapon to drive away competitors.These Companies are now trying to expand internationally.Korean Companies like Samsung,Hyundai are investing heavily in the Wind Sector and are on track to become formidable competitors in a few years.Suzlon's Chinese Dreams looks difficult to implement in reality.
September 14, 2010
Green Investing in India – Economically Backward Orissa remains backward in Renewable Energy as well
India's most industrialized and fast growing states like Gujarat,Tamil Nadu,Maharashtra have been the most aggressive in Green Energy as well.Gujarat has attracted huge interest in Solar Energy through strong support by the government.Tamil Nadu and Maharashtra account for almost 70% of India's 8-9 GW Wind Energy capacity.However economically backward states like Orissa,Bihar,Uttar Pradesh remain laggards in this respect as well.Orissa seems a classic case where the general economic lethargy extends to the Renewable Energy Sector as well.
September 14, 2010
While Japan is a big player in the Solar Energy Manufacturing Market,there are other significant players like USA,China,Germany which have not protested against this discrimination.So why is Japan so miffed as to approach the WTO over this issue.One reason that i can readily think of is the Huge Contract given to Samsung by the Ontario government.The agreement with Samsung gives it the subsidies to set up a huge solar and wind energy capacity in the province.The government will support the company through preferential grid access,subsidies and land.This has given a huge boost to the Green Ambitions of Samsung which wants to become a big player in the Renewable Energy Area.
September 13, 2010
China,India and South Korea have been leading the charge buying up Oil and Gas Assets at an incredible clip around the world.TEPCO plans to buy upto 50% of its Uranium needs from internal purchases as well raising LNG purchases.Japan lost out to South Korea in Economic Diplomacy when it lost out on Lucrative Nuclear Power Plant Contracts in UAE.It is now jostling with USA and China for building Nuclear Power in Vietnam.TEPCO is a leading member of Japanese Consortiums in international bidding
September 13, 2010
India’s Ministry of New and Renewable Energy (MNRE) has been criticized by a parliamentary committee for missing out several targets on renewable energy installations and cost […]
September 13, 2010
Supreme Court which is India's topmost Judial Authority has accepted a petition to look into the aspects of the 2G Scandal.Note past experience does not instill much confidence that justice will be served.The prosecuting agencies such as CBI and CVC are known to be puppets in the hands of the Ruling Politicians and you can't expect a person to prosecute himself.India's Manmohan Singh who has a very clean image strangely has defended A.Raja damaging his own credibility instead of taking a high moral stance and firing the Minister
September 11, 2010
These risks are real and not going away any time soon.They are waiting tinderboxes which could flare up with a small spark.India has managed a substantial premium in valuations over other emerging markets over its Consumption Led Growth.Institutional Investors know no better than common ones as was apparent from the 2008 Lehman Crisis.They are playing the Emerging Market Game till the Music Lasts.Make Sure you are not the one who finds no chair when the Music Stops.
September 11, 2010
The Desertec Initiative is the Biggest Green Energy Project ever conceived with a vast scale and an ambitious vision.However Desertec falls short on many parameters which are described above for it to ever reach fruition.While small scale versions of this Concept can be implemented like that by Solar Millennium in Egypt,the massive energy framework conceived by Desertec is not feasible.The Huge Subsidies and High Costs make it uneconomical despite its Clean Energy Promise.
September 11, 2010
Renewable Energy JA Solar wins more than 500MW in cell supply contracts – Recharge News Solaria Raises $65M for CPV Development – RenewableEnergyWorld Vestas in Eye […]
September 11, 2010
The US Congress had got into the act in 2009 through 2 Bills to regulate the Hydraulic Fracking Process and told EPA to study the process.The Stakes are high for the Oil and Gas Companies as Shale Gas represent a Huge Opportunity.North America has been a pioneer in this Technology with Shale Gas Extraction expected to spread rapidly in different parts of the world.The EPA Study and US Regulations will be watched closely by other countries which are formulating their own regulations in this regard.
September 11, 2010
Siemens is one of the largest conglomerates in the world with a huge Green Division.This German Giant is present in almost all sectors of the upcoming […]
September 10, 2010
The Developers as usual are being brazen about it denying any wrongdoing despite tons of cash and incriminating documents being found.These Raids never result in convictions or prison terms and in India are generally politically motivated.Most of the Government officials are a part of the gravy train and would not touch connected Real Estate Developers without a push from their political masters.Expect these Developers to start their business as usual in a couple of months as India's Political and Business Elite toys with the country's laws with impunity.
September 10, 2010
Inflation continues to rule in the double digits as price of essential food commodities touches new highs.The Federal Government has stopped doing anything promising lower inflation figures in the next months thanks to lower base effect.However absolute prices as compared to 2 years are up almost 30-50%.The High Inflation has not affected the elite Indian classes as Stock Market make new highs and Industry maintains high growth rates.Naxalism is the direct outcome of this huge income inequality which is increasing every day.With no corrective measures being taken except some photo-ops by India's oppurtunistic politicians except internal strife to Increase in India.
September 10, 2010
Vestas is trading at historical lows with these repeated bad news taking huge chunks from the stock.However like Suzlon,Vestas is more like a Falling Knife than a Fallen Angel.Despite a major new order of 400 MW,Vestas stock has fallen even more.Like Nokia in Mobiles and Sunpower in Solar Energy,the industry has totally changed for these industry leaders.The structural issues with the major incumbent Wind Turbine Makers are too dire for short term order wins to help them
September 9, 2010
The South Korean Government has been one of the most proactive ones in promoting Green Industry.During the Global Financial Crisis,the Stimulus Program of South Korea had the highest percentage devoted to Clean Technology Initiatives.Driven by the Government,South Korean Conglomerates have been investing into Green Sectors.Samsung the biggest South Korean has already committed huge investments into CleanTech Sectors like Solar,Wind,LEDs.Korean Shipbuilders like Hyundai,Daewoo and Samsung are getting into manufacturing of Wind Turbines while Chemicals Giant Hanwha
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