Alternative Energy
March 6, 2011
There exists a reasonable number of ETFs in the US Stock Market which are dedicated to Clean Technology.However the performance of these ETFs has been quite […]
March 3, 2011
Alternative Energy in India saw significant growth in 2010 with the last 9 months of the year seeing capacity additions of 1800 MW which is almost 10% of the total installed capacity of 18500 MW.The growth in renewable energy was led by Wind Energy which forms almost 70% of the total renewable energy capacity in the country at around 13500 MW.The strong incentives given by both state and central government has led to the sharp growth of wind energy.Note Wind Energy is quite close to Gas based electricity price.India Needs at least 68 GW of Renewable Energy Capacity by 2020 to meet its RPS target of 15% set by CERC (note this is capacity only not hours of electricity).
March 1, 2011
Solar Thermal Technology has been facing tough competition from its sister Solar PV Technology in recent times.Despite strong government subsidies and support,numerous drawbacks have contributed to this Technology losing out to Solar PV in a number of projects in the US notably by Tessera.However a number of startups and big conglomerates continue to make huge investments in this technology.Spain and US are leaders in implementation of this Solar Technology type,however others like India and China are to building CSP plants as their energy needs continue to grow.Note like Solar PV,there are a number of different technology types for CSP like Power Tower,Parabolic Troughs,linear fresnel technology and Stirling Engines.Here is a list of the most important Solar Thermal Companies (Technology Providers cum Project Developers)
February 28, 2011
Renewable Energy Certificate (REC) are one of the most important tools for promoting alternative energy in India.The Central Regulatory Commission (CERC) alongwith energy exchanges has been working on making trading in RECs happen since the last one year.Trading in RECs started last week with small amounts of REC trading at the Delhi based Indian Energy Exchange.Note most of the volumes are expected to be traded in the July-Sept Wind Season and October Bagasse planting season.While only small amounts were traded as physical trade is only allowed for 2 hours on last Wednesday of every month,volumes trading should start in 2012.The IEX is targeting around $8 billion in REC trade by 2017 as Renewable Energy in India grows at a faster rate.
February 17, 2011
Geothermal Energy is the proverbial poor cousin to wind and solar energy.Only 10 GW of Geothermal Energy Capacity has been installed and the growth rate is a pathetic 3-4% compared to the over 50% CAGR seen for solar energy and around 30% for Wind Energy.Geothermal Energy produces electricity at a reasonable cost in mature locations and unlike Solar,Wind does not suffer from intermittency problems.However a number of problems dog geothermal energy development.Despite huge promise,Geothermal Energy faces a slow painful death and unless something dramatic happens will remain a niche renewable energy source.Canadian companies which are the leaders in consolidating the fragmented industry like Ram Power and Magma Power are facing huge problems.While Ram Power saw its CEO go,Magma is now looking at other renewable energy opportunities.
February 17, 2011
Geothermal Energy in India is non existent with not a single functioning plant as of 2011.However potential for this renewable energy exists in a number of sites in India with a potential of around 10 GW.With the Indian government planning to come out with a draft policy to develop geothermal energy by March 2011,major companies are gearing up to exploit this alternative energy resource.Note India has massive energy needs and with a 15% energy requirement from clean sources by 2020,it will need to develop all renewable sources.Note India already has a well developed Wind Energy Industry and has one of the fasted growing Solar Power Industry in the world with a massive future growth potential.Geothermal Energy is regarded as a poor cousin to its more glamorous cousins Wind and Solar.However Geothermal Energy possesses one attribute that the others do not.Its 24 hour generation capability is a massive plus compared to the intermittent nature of Wind and Solar Energy.However long project development time and massive capital investments have deterred fast growth in geothermal energy in the world.However some countries like Iceland,Indonesia,Philippines and USA have a strong geothermal energy industry.
December 8, 2010
The biggest problem is that the winners of the Solar PV Projects are mostly unknown small firms who have bid so low that make the returns negative for investors according to the renewable energy ministry officials (MNRE).Bidding has gone as low as 23c/Kwh which is crazily low considering the debt costs in India are as high as 13% annually.Compare that to China where debt is priced as low as 3-4% and the winners are huge utilities.With even India's Tata Power saying that the projects are not bankable as their is confusion how the electricity tariffs will go to developers,its difficult how these unknown firms could manage the financing .While the companies will lose their bid deposits if they don't finish the projects,Indian Solar Energy will be the biggest loser as the failure of the Phase 1 of JNNSM of 1000 MW by 2013 will lead to even further delays.Already JNNSM has been criticized by a parliamentary panel for the tardy progress.Note some states have taken the lead in pushing solar energy on their own,namely Gujarat which aims to put up more than 500 MW in the next year or two.
December 7, 2010
A2Z Maintenance and Engineering Services is a Private Equity Promoted Facilities Management,Waste Management and EPC Company which is getting into the business of biomass energy.Company has fixed a price band at Rs 400-410 comprising of fresh issue of Rs 675 crore (~$150million) by the company and an offer for sale of upto 4.5 million shares by the selling shareholders.Note Renewable Energy in India has a bright future with around 5 GW of Renewable Energy Capacity to be installed per year over the next decade.However Biomass Energy may not be the best area considering the considerable expense and uncertainty in acquisition of feedstock.The Company already operates in 3 distinct sectors namely
Summary
A2Z is very similar in nature and valuation to VA Tech Wabag which did a successful IPO recently.The margin profile,growth and management is very similar.As such A2Z is a decent company however its not a compelling buy given the valuation.Note Biomass Energy is a tough sector to operate in and Orient Green Power has done badly since its IPO without having done anything badly as such.A2Z given the overall qualitative and quantitative factors seems a good stock at fair valuation.This makes the company a decent one to buy.
December 4, 2010
The Trend of State Government Individual Companies Partnering in Renewable Energy Manufacturing to generate Green Jobs is increasing in the last year.Individual provincial governments in Canada,China and South Korea have recently signed deals with major Renewable Energy Companies to set up Manufacturing Plants in their respective provinces.The government gives various incentives such as land,tax breaks,assured markets,cheap loans in return for huge green investments from the companies.This gives a strong boost to the provinces which are fighting it out with other provinces for Green Dollars.While the process may not be exactly democratic and lead to an ideal selection,it does lead to faster implementation and guaranteed jobs in an increasingly tepid global economy.The latest province to join the bandwagon in a major way is Hebei province in China which has tied up with Chinese Wind Turbine Producer Ming Yang Power.Note other Chinese provinces have also tied up with Chinese Renewable Companies to increase Alternative Energy Investments in their regions.
November 26, 2010
India has set up ambitious targets of meeting 15% of its Energy Needs from Renewable Sources up from around 5.5-6% in 2010.WIth India's Electricity Capacity expected to rise to 450 GW from around 165 GW,this would imply that around 67.5 GW of Electricity Capacity would be needed up from around 16 GW.This would mean around 5 GW of Capacity addition every year in the next decade which is a very tall order.20 GW could be met by Solar Energy according to the Jawaharlal Nehru Solar Mission (JNNSM).Most of the rest would have to met by Wind Energy.Biomass Energy has high costs and reliability problems which mini hydro potential is only 1 GW.Note this is just the capacity I am talking about,for meeting the electricity generation,capacity additions would have to be greater as Solar Energy and Wind Energy have only 20-30% Load Factor compared to 60-80% for Fossil Fuel Energy Sources.Nuclear Energy can contribute another 20 GW.
Renewable Energy in India is growing at a rapid pace increasing its share of the total capacity from 2% in 2003 to around 10% in 2010.However the share of electricity generation is still quite low at 3% due to the lower capacity load factors of Green Energy Sources compared to Fossil Fuel Sources.The Total Installed Capacity of Renewable Energy in India is around 16 GW with Wind Energy taking the Lion's share at almost 70% followed by Small Hydro at 15% and Biomass Energy at 12%.Solar Energy in India till now has a capacity of just 6 MW which is estimated to grow to 22 GW by 2022 making Solar Energy one of the Biggest Growth Opportunities in the Field of Indian Energy.