Climate Change
September 7, 2010
The country also has a 20% Energy Efficiency Improvement Plan for 2006-2010 which it is almost sure to miss.China energy reduction plans have gone haywire due its fast growing economy's dependence on fossil fuels.China has recently talked of increasing the percentage of Renewables to 15% by 2020 from the single digit figure now but the progress of Energy Efficiency has been not upto the mark.China's Energy Efficiency in fact decreased in the first half of 2010 instead of increasing.This decrease is due to the breakneck industrialization occurring in Chinese provinces determined to outdo each other in the Growth Game.Diktats by the Central Party Leadership have failed to rein in the provinces.
September 5, 2010
Shale Gas Extraction has seen doubts being raised against its Environmental Safety Record.This new form of Fossil Fuel Extraction has seen a Gold Rush from Global Oil and Gas Majors looking to tap into this major new Energy Form.In the initial helter and skelter,environmental norms have been bypassed.Recently a NGO blamed regulators and companies of illegally diverting millions of tons of water in Pennsylvania.India's Biggest Private Company Relaince Industries has invested a huge amount in acquiring Shale Gas Assets in order to assimilate this Technology. The Indian government is writing a new Shale Gas Policy as India is said to have geographical formations with potential Shale Gas Deposits.
September 1, 2010
Coal India Limited (CIL) would be a safe stock to invest in if it priced in the indicated manner that is a $33 Billion Market Capitalization.This stock won't be a multi bagger but would offer decent price appreciation with almost no downside risks.At trailing P/E of 15x and 3 year average trailing P/E of 20x,the company is not expensive given its competitive strengths.Its dividend yield would be around 1.5% with growth of around ~10-12%.However if you exclude $8.5 Billion in Cash,then the stock seems cheap at around trailing P/E of 11x.It has a P/B of 6x and P/S of around 3x.With its ASP being at a 65% Discount to the International Price,the Company has a huge moat around its business model and I would recommend it as a Buy.
September 1, 2010
Empire Building through Unrelated Expensive Acquisitions make Reliance Industries Stock Underperform
Reliance Industries is known to have one of the smartest management teams in the country.The Reliance Group led by Mukesh Ambani is well connected with proven record in executing huge projects in the Oil and Gas Arena.However outside of their core competence,the Group has suffered.Its Retail Entry has not been much of a success despite big bucks being poured in the last 3-4 years.It entry into marketing of oil based fuels has also meandered without going anywhere.Now the Reliance Group has announced an entry into the Hotels Sector by acquiring a 14% stake in East India Hotels at a significant premium over the market price from the promoter Group.This ~$220 million investment is totally unrelated to Reliance's activities and make no strategic sense.
August 25, 2010
Norway has been hailed as the toughest cutter of Greenhouse Gas Emissions amongst the devloped countries promising to cut Carbon Emissions by 30-40% by 2020 from […]
August 23, 2010
Reliance's Strategy in Shale Gas makes a lot of sense.The Technology is but new and unproven on a long time scale.There have been concerns about the environment impact of Shale Gas Extraction.Also low Gas Prices due to the GFC has made the industry growth slowdown.This is a good time to buy Shale Gas Assets relatively cheaply as Economic Recovery will again see Fossil Fuel Prices heading up.
August 23, 2010
The Green Indices have sharply underperformed the broad market due to a combination of several factors.These are High Competition in Solar Energy,Declining Demand in Wind Energy,Lack of Global Agreement on Climate Change and Slow Growth of Smart Grid Technologies.With developed governments facing pressure to cut fiscal deficits,green investments are also expected to get hit from government stimulus plans.However India and China are the two bright spots in an otherwise bleak Green Investing Landscape.Both countries have a Prodigious Energy Demand which is still growing at a rapid clip.Despite their reliance on Coal and other Fossil Fuel forms,both countries realize the need to promote Renewable Energy.
August 23, 2010
The United Nations is reviewing the Carbon Credit Requests from 5 plants in China and their is a high probability of cancellation of these requests.NGOs and activists have alleged that these HFC plants emit more GreenHouse Gases (GHGs) than is required in the normal function of the plants.This leads to increased revenue from neutralizing these gases defeating the entire purpose of the CDM scheme.Carbon Trading has repeatedly been proved to be an inefficient and ineffective scheme,but its popularity continues to increase around the world.The Scheme is suitable for niche purposes and is totally inadequate as a holistic response to the problem of Climate Change
August 20, 2010
Chinese Firms are not exactly renowned for their Environmental Credentials and the weak regulations in African Countries does not give them an incentive to be so.Concerns were raised about the impact of a Chinese Ore Mine in the forests of Gabon.With lax oversight and easily corruptible administration,the Damage is already Done before it can be Stopped.Africa countries in general are ruled by Undemocratic, Corrupt rulers which are willing to go along with Environmental Degradation in return for Bribes.
August 19, 2010
The Tres Amigas Facility will be the first of its kind in the world and would be profitable allowing sale of power between the Three Grids.This unique initiative has received support from numerous stakeholders like utilities,transmission operators,Green Energy Suppliers etc.Extreme Power has been selected to provide Energy Storage Facilities and Energy Management Technology for this project.If this project gets built it will lead to the building of similar such facilities in the rest of the world and be a big boon in the quest of Mass Adoption of Green Energy.Note this Project seems to deserves a DOE Grant much more than the Billion Dollar Loans to Abengoa and Solyndra.
August 18, 2010
Now Blackstone has decided to gamble on India's Power Deficit Story by investing $300 million for an undisclosed stake in the company.With investment plans of $6.5 billion and parent company sinking under loads of debt,Moser Baer Projects desperately needed equity which has been provided by Blackstone.Its previous track record in Solar and Optical Media does not inspire a lot of confidence.But India's 8-9% Growth Rate is like a Rising Tide which will lift all sorts of Boats.Blackstone is perhaps gambling more on that rather than on Moser Baer.
August 18, 2010
Carbon Capture and Storage (CCS) Technology is akin to putting Lipstick on a Pig (read Coal Power Plants).This Technology which has been hyped as the Green Answer to Coal's Dirty Polluting Ways has never been proven on a commercial scale .Note the British Government promising CCS with every new Coal Plant.Despite numerous large pilot projects,the Technology remains immature.Even China which gets 80% of its electricity from Coal Power Plants and is the biggest emitter of GHGs,remains skeptical of this technology.
August 17, 2010
To reduce its expense Vedanta will only pay Rs 355/share to minority shareholders in the open offer while offering Cairn Rs 405/share .This will include Rs 50/share for a non compete agreement.This seems a ruse to shaft minority shareholders as I don't think Cairn poses much of a threat to Vedanta from further Oil Explorationin India.I don't know how Vedanta's returns from the Cairn's oil fields can be impacted through Oil Exploration by Cairn's parent in the future.Indian stock market regulator had earlier rejected Heidelberg's premium to be paid to SK Birla Group when buying Mysore Cements stake.The controlling premium has been paid in earlier M&A by foreign promoters to Indian promoters.The area of controlling premium remains a grey one and I think it is being exploited by Vedanta to lower its open offer price.It remains to be seen if SEBI rules in the favor of the minority shareholders.
August 12, 2010
UN's CDM panel which decides on the eligibility of projects under this scheme has come under criticism for being too lenient in approving projects.It has been said that these projects sometimes lead to more emissions defeating the very purpose of this scheme.The Panel has become more discerning and has rejected around 50 Wind Projects in China because they were thought to be profitable even without these credits.
August 10, 2010
Only communities adjacent to the rivers can use this water.An Environmental Group has also accused the state EPA of colluding with these corporate interests.This may lead to huge lawsuits against these companies and force the Boom to a halt.Shale Gas is supposed to be the new energy panacea as the deposits can meet US energy needs for 20 years.However like other fossil fuels it will deplete leaving behind a legacy of ecological degradation and destruction.
August 10, 2010
Extreme Weather Conditions has increased in frequency this decade.In fact this decade is the hottest decade in records with temperatures making new records every year.While nothing can be said with a 100% possibility that it is due to Global Warming,the evidence is certainly pointing in that direction.
August 5, 2010
Poor Island Nations like Maldives are most vulnerable to Climate Change with their very existence at stake as rising sea levels threaten to sink them completely […]
August 5, 2010
United Kingdom has been a laggard in climate change and global warming issues especially compared to its European neighbours.While countries like Italy,Germany and Spain have installed […]
July 21, 2010
Google’s paltry $39mm investment in a Wind Farm was puzzling as it really seemed to meet no goals.The investment would not lead to any significant advancement […]
July 21, 2010
Climate Change Mitigation and Global Warming have been put in cold storage by world’s major countries like USA and China.While Europe and Japan are pushing initiatives […]
July 21, 2010
Tata Group is the most respected Indian Industrial Group,however that seems to be changing India’s Tata Group of companies is the most respected corporate group in […]
July 20, 2010
Honda is betting more on the success of Hybrid Vehicles than on Electric Vehicles.It seems that the Japanese auto giant thinks that Hybrid Vehicles will get […]
July 20, 2010
China surpassed the USA as the largest emitter of Greenhouse Gases (GHG) in 2006 when it produced 6.2 billion tons of CO2 overtaking the USA at […]
July 19, 2010
Now it has become easier to invest in this metal with the launch of an ETF dedicated to Lithium alone.This ETF which is being launched by Global X Management with tracks stocks of electric vehicle producers and battery makers.I am not a fan of the Lithium Battery makers or Electric Vehicle producers
July 17, 2010
India is facing a growing backlog of environmental cases with rapid industrialization leading to disputes with traditional stakeholders.Land acquisition has become a huge problem with industries […]
July 16, 2010
Green Energy has increasingly become mainstream rather than a niche category supported by some environmental activists and hippies.This is proved by the fact that almost half […]
July 16, 2010
A huge 2640 MW coal plant has received a major jolt after its environment clearance was rejected by he National Environmental Appellate Authority (NEAA).This plant which […]
July 15, 2010
World’s biggest Oil company Exxon Mobil has opened a Greenhouse facility to grow and test algae which will be used for producing biofuels.Algae based Biofuels is […]
July 14, 2010
US Export Import Bank (Exim) is a government owned financial institution which helps support US trade through credit financing of exports/imports of US companies.The Bank is […]
July 13, 2010
Jindal Steel and Power Limited (JSPL),one of India’s biggest private sector Steel companies is looking to build a Rs 42000 crore ( ~$10 billion) Coal to […]