Competition
April 25, 2011
Maharashtra which is the largest power generating state in India but deficient in renewable energy sources of generation will not use the discredited reverse auction bidding mechanism being used in the First Phase of the JNNSM Federal Solar Subsidy Policy.The reverse auction bidding was done due to the massive deluge of applications for setting up solar PV and solar thermal power plants.Based on the Rs 17.91/Kwh Feed in Tariff,developers had bid discounts with the solar project owner offering the biggest discount winning the right to build the solar power plant.This had led to irrationally low bidding for projects and it is all but certain that these solar projects will either be not be built at all or run into heavy losses.
April 25, 2011
The Government of India issued an Ordinance on 19th January, 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The Life Insurance Corporation (LIC) absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and foreign insurers in all. In 1972 with the General Insurance Business (Nationalization) Act was passed by the Indian Parliament, and consequently, General Insurance business was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector.Now more than 20 life insurance companies in India have started operations with the industry size expected to reach a mammoth $350-400 billion by 2020. Before that, the industry consisted of only two state insurers: Life Insurance Corporation of India, LIC and General Insurers (General Insurance Corporation of India, GIC). GIC has four subsidiaries
April 22, 2011
Mining Industry in India is an important economic sector which contributes significantly to the economy of India. India's minerals range from both metallic and non-metallic types.The total working mines were 2,854 in 2007-08 with 569 mines belonged to coal and lignite, 676 mines to metallic minerals and 1,609 mines to non-metallic minerals.There were 755 mines in public sector and the remaining 2,099 mines in private sector.India is an important exporter of iron ore, titanium, manganese, bauxite, granite, and imports cobalt, mercury, graphite etc. India mineral resources of the country are surveyed by the Indian Ministry of Mines, which also regulates the manner in which these resources are used. The ministry oversees the various aspects of industrial mining in the country.Note Mining in India comes under both the ferderal and state supervision.
April 22, 2011
India's Oil and Gas Industry has an interesting mix of Oil & Gas companies from the government and private sector.Except for some companies providing ancillary and drilling services,most of the companies are huge with billion dollar balance sheet and huge operations as is the case with the Oil and Gas Industry worldwide.Except for Reliance Industries,the upstream sector of oil and gas production and distribution is dominated by government owned companies which are heavily regulated.Despite attempts at liberalizing the APMC and the operations of the PSU Oil Companies,HPCL,BPCL and IOC run billions of dollars in losses as they are forced to sell oil and gas products at below their cost.The government's policies are mostly ad-hoc compensating these companies through bonds and money transfers.It is quite strange as the minority investors are forced to pay for government subsidies for energy.India's Oil Subsidies has led to the flourishing of a massive Oil Mafia which does not think twice before killing government officials and has led to poor outcomes for the country.Despite this government stupidity,some government companies like GAIL,OIL India and ONGC which operates in the production and have to bear less of the subsidy burden have grown and performed admirably.In the private sector companies like Reliance,Aban,Great Offshore,Essar have managed to grow rapidly as well with varying degrees of success.Here is the list of the major Oil and Gas Companies in India.
April 22, 2011
General Insurance covers all the non-life insurance types such as Motor Insurance,Health Insurance,Calamity Insurance,House Insurance etc.The biggest money earner for General Insurance Companies is Health Insurance and its associated policies like Disability Insurance etc.Having health insurance is important for several reasons. Uninsured people receive less medical care and less timely care, they have worse health outcomes, and lack of insurance is a fiscal burden for them and their families.
Government General Insurance Companies are the best ones to take health insurance policies because of a simple fact that do not cheat and harass you like the private insurance companies whose only aim is to earn a quick profit.Given the pathetic system of contract enforcement in India this become especially important as legal cases can go remain stuck in the justice system for years.Just like LIC is the best life insurance company in India because of the TRUST factor so are the Four government health insurance companies because of their government ownership and lack of overarching profit motive.
April 22, 2011
In India, Insurance is a national matter, in which life and general insurance is yet a booming sector with huge possibilities for different global companies, as life insurance premiums account to 2.5% of India's GDP. The Indian Insurance sector has gone through several phases and changes, especially after 1999, when the Govt. of India opened up the insurance sector for private companies to solicit insurance, allowing FDI up to 26%. Since then, the Insurance sector in India is considered as a flourishing market amongst global insurance companies. However, the largest life insurance company in India is still owned by the government.The Insurance Industry has grown (premium as percentage of GDP) from 2.3 per cent in 2001 to 5.2 per cent in 2011.The report estimates the total insurance premium at approximately Rs $350-400 billion in 2020 with Life Insurance making 90% of the premiums.The profitability of the industry is negative as they have spent their energies in expanding their base in a rapidly growing market without concentrating on the margins leading to a cumulative loss by private insurers of around $3.5 billion.However the huge size of the insurance market which has been estimate at an astounding $350 billion in premium by 2020 is attracting companies in droves.Almost all major global insurance companies have a presence in India through JV (as government regulations only allow 26% holding).Major Indian Banks and Finance Companies too have a presence in the sector through JV with foreign partners who bring the expertise.
April 22, 2011
Future Ventures is a VC/Private Equity Company that has invested in a number of small Indian companies and startups mainly focused on the consumption industry in India.With India growing at around 8-9% in the last few years and expectations of strong future growth driven by consumption,Future Ventures seems a good investment considering the portfolio of companies that it owns (analyzed below).Future Ventures is a part of the Future Group run by Kishore Biyani who started India's most famous retail company Pantaloons.The Company has set a price band of 10-11 rupees a share with a target of raising around Rs. 750crore though the IPO.This would represent around 40% of the equity which would give it a post IPO market capitalization of around $375 million.Note the company had tried to come with an IPO 2 years ago but it was deemed to expensive at that time.
April 22, 2011
Offshore Wind Energy has been foretasted from around 3 GW to 75 GW by 2020 as countries in Europe,Asia and North America heavily support this industry.Onshore wind energy growth on the other hand is expected to slow down as 38 GW of Wind Capacity were installed in 2010 with Western Markets showing a sharp slowdown.Offshore Wind is seeing increasing growth as government heavily subsidize and support Offshore Wind Energy.Though the costs of offshore wind parks are much higher today,they will decrease as the installed offshore wind capacity increases from around 3 GW today to around 75 GW which is being foretasted globally by 2020.Note every industry sees costs declining with large capacity except the mature industries.For example Wind Energy has seen a 10% decline in costs for every 100% increase in installed capacity.Note offshore wind projects offer even more Wind Energy Advantages than normal Land Based Wind Farms.The only problem facing offshore wind power is high costs as the industry still is on the learning curve.However as companies gain experience and build capacity,the prices will be cut as costs come down and volumes increase.European Wind Companies are leading the pack as almost 80% of the current global capacity has been installed in Northern Europe.The opportunity is so large that South Korea shipbuilders like Samsung,Daewoo and Hyundai are investing heavily in this area.
April 19, 2011
The Indian telecom industry is the world's fastest growing industry with 792 million mobile phone subscribers as of February 2011. It is also the second largest telecommunication network in the world in terms of number of wireless connections after China. The industry will reach around $80 billion in revenues by next year showing an astounding CAGR of over 25% and will employ a stupendous 1 crore employees making it one of the biggest value creators in India in recent times.However the telecom companies in India after enjoying a boom period in the early 2000s have faced a couple of tough years with hypercompetition leading to a price war in auction of 3G spectrum.This was followed by one of the most high profile corruption scandals in the country which resulted in the jailing of the former telecom minister in the 2nd auction of 2G spectrum.Most of the telecom companies have been found to be implicated in colluding with sleazy politicians/bureaucrats in looting the Indian taxpayers.India Real Estate Sector is one of the most corrupt in the country and after the 2G Scam,the telecom sector is giving it close competition for the No.1 spot in corruption
April 18, 2011
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.The massive investments and government interest in offshore wind farms has attracted a number of companies to this sector.Top Wind Turbine Companies are leading the pack as it falls right in their domain of expertise as Wind Turbines form almost 50% of the cost of a offshore wind park.Other companies with expertise in related areas such as building foundations for the giant 5 MW and greater capacity offshore wind turbines and the logistics in transporting them also get involved.Shipbuilders from South Korea and Northrop Gruman are also getting in through JV and M&A.European Wind Companies are leading the pack as almost 80% of the current global capacity has been installed in Northern Europe.Also these companies possess a high level of expertise at building and designing wind turbines.Here is a list of the major offshore wind turbine companies.
April 18, 2011
Offshore Wind Energy has been forecasted from around 3 GW to 75 GW by 2020 as countries in Europe,Asia and North America heavily support this industry.Note onshore wind energy growth has slowed down as 38 GW of Wind Capacity were installed in 2010.Offshore Wind Energy is being subsidized as it has a number of advantages over onshore wind power despite its higher costs.The oppurtunity is so large that South Korea shipbuilders like Samsung,Daewoo and Hyundai are investing heavily in this area.Note Onshore Wind Energy also has many advantages which have overcome the drawbacks to become the biggest green industry.Offshore Wind Power is set to take up the growth baton fro Onshore Wind as Costs are expected to come down as the industry and technology matures and more Wind Turbine Companies gain experience in this area.Note USA has 4000 GW of Offshore Wind Capacity which is enough to meet the entire electricity need of the biggest power consumption country in the world.
April 18, 2011
Offshore Wind Parks which are clusters of giant offshore Wind Turbines built near the coast in the middle of the water have become the fastest growing segment of the Wind Power Industry.The list of of offshore wind farms are increasing as government heavily subsidize and support Offshore Wind Energy.Just like Electric Vehicles,offshore wind farms though not economic today will help immensely in the fight against Climate Change in the future.Though the costs of offshore wind parks are much higher today,they will decrease as the installed offshore wind capacity increases from around 3 GW today to around 100 GW which is being targeted globally.Note every industry sees costs declining with large capacity except the mature industries.For example a rule of thumb for solar power costs are that they decline by around 20% for every 100% increase in installed capacity.Offshore Wind Power today suffers from higher costs as the industry and the ancillary infrastructure is not well devloped.However as companies gain experience and build capacity,the prices will be cut as costs come down and volumes increase.So what is the cost of offshore wind power and what are the cost drivers of this industry.
April 18, 2011
Offshore Wind Farms are the fastest growing segments in the Wind Energy Industry area boosted by improvements in Wind Technology and subsidies by the government.Offshore Wind Energy is growing the fasted in the United Kingdom which is surprising considering the poor state of Green Energy there.Europeans are leading the way in offshore wind energy given their massive strengths in Wind Technology.However other major Wind Turbine Companies are also developing their capabilities by spending millions of dollars on offshore wind turbine R&D.Offshore Wind Farms have also come in for criticism because of their higher costs and the longer time to install them.Note offshore wind projects offer even more Wind Energy Advantages than normal Land Based Wind Farms.The only problem facing offshore wind power is high costs as the industry still is on the learning curve with only 1.5% of the world's total installed wind capacity coming from offshore wind farms.
April 17, 2011
Silicon for Solar Cells that are used to make the normal crystalline solar panels is known as Polysilicon.This is a highly purified form of the Silicon Metal that is mined.Note Polysilicon is made through chemical processes which help in purifying the raw silicon and removing the impurities.The Silicon that is used to make Silicon Cells is also used to make semiconductor wafers which is the raw material for the Electronic Industry.Solar Cells require slightly lower purity of 6N compared to the higher 9N required by the Semiconductor Industry.Once Polysilicon is produced it has to be made into flat wafers which require further industrial processes like pouring the metal in crucible to make ingots and then cutting the ingots by wiresaws to make solar wafers.The solar wafers are then converted into solar cells by processes like diffusion,etching etc.
April 17, 2011
A lot of confusion exists about solar cells efficiency about which technology results in how much efficiency and the difference between solar cells and the solar panels efficiency.Note the biggest differentiator of a solar cell besides its cost is its efficiency.Not only do different materials give different efficiencies,even different companies have conversion efficiencies which differ for the same technology.Silicon Solar Cell Efficiency also depends on the purity of the solar wafer which is used as raw material to print solar cells besides whether it is monocrystalline or multicrystalline solar cells.With most of the low lying fruit already gathered in respect to lowering cost of the silicon solar cells,most of the big Chinese solar companies are concentrating their efforts in improving the efficiency in order to cut down costs in the cutthroat solar industry where the stars of yesterday are fighting to stay alive (Energy Conversion Devices,Evergreen Solar).This rising tide of the solar industry in 2010 has not been able to revive the fortune of some companies though European companies have made enough to fight another day.Solar Cells Efficiencies also differ in the champion cells tested in labs like NREL and on commercial lines.But here is a general range of efficiency of different types of solar cells made from different technologies
Solar Cell Efficiency Improvement is the best way to reduce the costs of solar power and reach grid parity in most places in the world.Solar Cell Efficiencies have improved continuously and with a number of companies and startups investing billions of dollars in research,it will keep improving.However cost considerations are an important factor as well and the technology which balances the two will win the solar energy race
April 17, 2011
America currently has a massive number number of startups in the clean energy industry and a lot of them in the fastest growing green industry that is the solar sector.However like startups in all industries a lot of them will fail,some will sell themselves to others like Heliovolt,Ausra while a few will make it really big making a fortune through IPOs for their PE investors and owners.One or two will make fortunes for those who invest early as well like First Solar.Note First Solar despite numerous ups and downs is still up more than 450% from its IPO price five years ago.It won't be the last either.So despite the strong competition in the solar industry where numerous companies and technologies are jostling in the more than $70 billion global market,one or two of the smart ones will become huge winners like Intel or Microsoft.So which are the solar startups which are showing the most promise.Four of them are currently leading the pack while a few others have got a reasonable chance of success as well though they need to prove more like Stion and Miasole.Some of the more hyped ones like Solyndra have gone on a slimming down mode and might make a comeback though it will be tough.There are some others in stealth mode which may become big also.But here is the list of the Four Best Solar Startups in the Solar Electronics,Solar Panels and Solar Thermal Sectors.
April 15, 2011
Renewable Energy Companies have started going public in a big way in the last 5 years as the Wind Industry has gone by around 30% CAGR in the last 10 years and the Solar Industry has grown by 50% CAGR.Both these industries have seen investments of more than $70 billion each in 2010.Solar companies which did not exist in public stock markets before 2006 have seen over 100 listings in the last 5 years in different stock exchanges around the world.Wind Industry which has been around much longer has not seen a lot of listings in the last 5 years as most of the companies are already listed.However a number of Chinese companies which have seen spectacular growth driven by the 100% growth per annum in the Chinese market have seen a number of listings.Other Renewable Energy companies have not been that prolific in public IPOs,though a number of clean technology companies have listed in the NASDAQ Market like Amyris,Tesla,Zipcars,A123 Systems and have gotten a good response.However for Renewable Energy Companies the USA Stock Markets have not proven very receptive in the last couple of years after seeing a boom of Chinese Solar Company listings.So which is the best stock market and the worst stock market to list if you are a Renewable Energy CFO?
April 15, 2011
Suniva is the only crystalline solar Solar Companies in the US which has been able to survive and thrive in recent times.Sunpower too has resurrected itself through strategic JVs and acquisitions.The main reason for the decline of the US solar companies has been the severe competition from the low cost Chinese Solar Industry.This has made companies like Energy Conversion Devices and Evergreen Solar shut down US factories and look towards Mexico and China to build low cost factories.However Suniva has managed to face all these competitive threats quite successfully and is looking to expand capacity in the US by building a 400 MW factory.The company even refused a DOE Loan Guarantee saying that the terms were too onerous.The company has manged to raise more then $130 million in equity and has won contracts to supply high efficiency solar cells to the Asian companies which is a first.Suniva differentiates itself through its technology which allows the production of high efficiency monocrystalline solar cells at lower cost.Note Sunpower makes the highest efficiency cells in the world in the range of 22-24% but its cost structure is too high.Suniva is looking to challenge the Taiwanese Cell Producers by marrying higher efficiency with lower cost.
April 15, 2011
Renewable Energy Investments surpassed investments in Fossil Fuel Electricity investments in Europe and USA in 2010 as developed countries focused on alternative energy as a solution to the problem of Global Warming and higher Fossil Fuel Costs.While Wind and Solar Energy are currently the dominant forms in different types of Renewable Energy,others like Tidal and Wave Energy are also seeing a lot of investment in R&D.The major advantage of Renewable Energy is that it does not emit GHG which is the leading cause of Climate Change.While this is the biggest Need for Renewable Energy other needs are equally if not more important.Here are the most important needs of Renewable Energy
April 15, 2011
Areva the French Nuclear Giant which is known more for producing equipment for nuclear power plants is been awarded federal funding by the Australian Government to build a solar coal hybrid plant in Queensland.The 44 MW Concentrated Solar Power (CSP) Plant will be built near a 750 Thermal Power Station.This will be the second solar coal hybrid plant in the world when its gets finished in 2013.Note Areva has huge plans in the Solar Thermal Technology Industry after buying startup Ausra sometimes ago.The company which is an expert in power plant equipment technology such as boilers,turbines will use its expertise to build a CSP plant adding to the power output of the Kogan Creek Thermal Station.Note the cost mentioned implies around $2.4/watt which does not seem expensive.The CSP Coal Hybrid will not require storage which will help in reducing the costs of the power plant.Note a number of Fossil Fuel Solar Hybrid Plants are being planned around the world.Almost all of these power plants use CSP Technology instead of the PV Technology.Its a valuable niche for Solar Thermal Companies to explore as they face huge competition from Solar PV which is drastically reducing its costs to reach retail electricity price equality.
April 14, 2011
First Solar Thin Film Leader and the largest solar company by value has decided to shift focus towards the commercial segment between 10-30 KW in size..The company was promoted by Wal-Mart promoters and has seen remarkable growth in the last few.This US based company uses Cadmium Tellurium (Cd-Te) Technology and is the lowest cost panel producer in the world today if you don’t include any penalty for low efficiency.Note First Solar derives most of its revenues from large utility solar power plants where the lower costs of its Cadmium Tellerium Solar Panels compensates for the Lower Efficiency of its Solar Panels.It does not get too many sales to the commercial and residential market where its lower efficiency panels lose out as they require much larger space to generate the same amount of power. First Solar Panels don't sell well in applications where space is a constraint.Note Sunpower which is the highest efficiency commercial c-Si solar module producer wins out in applications with space constraint.
April 14, 2011
Micro inverters in Solar Energy is a recent phenomenon which has started replacing solar string inverters in residential small solar installations in a small way in USA.Enphase Energy has been instrumental in making this niche technology popular which increases solar panel efficiency by 5-25% and has a number of other advantages over central inverter as well.This has made the major solar inverter companies sit up and even introduce microinverters even on their own.Though the Costs of the Solar System are increased as microinverters cost more per watt,however the reduce the lifecycle costs in small installations through increased reliability,life and productivity.As the Solar Industry has matured,focus has shifted more towards the Levelized Cost of Energy (LCOE) from Solar Panels Electricty generation rather than just on the Solar Capital Investment costs.Solar Mic
April 14, 2011
Solar Microinverters typciall sell for 75-90c/watt which means that if all the solar installations in the world at around 18 GW were done using microinverters,then the size of the addressable market would be $12.5-16 billion,however a lot of the installations are larger than 1 MW in which micro inverters are not used.Also micro inverters are mainly sold in the US and Canada so the total size of the addressable market becomes more like 500 MW which is around $$375-450 million dollars.Enphase Energy the biggest microinverter manufacturer has sold around 500,000 prouducts which implies total lifetime revenues of around $40 million.According to IMS Research around 1 GW of microinverters would be installed in 2013 and the market size would be around $700 million.I think the market size will be greater given that other geographies have not been penetrated,the residential solar market is growing faster and more companies will lead to a bigger market
April 14, 2011
Solar Microinverters have opened an entire new category in the traditional Solar Inverter Industry threatening the business model of the incumbent companies which have seen spectacular growth in recent years.Solar Inverter Manufacturers have enjoyed enviable growth of more than 50% CAGR to become a $5 billion industry in 2010.However this industry faces competition from a host of new tiny competitors led by Enphase Energy who claim to reduce costs,increase reliability and add monitory plus flexibility as compared to String Inverters.The threat is the most in residential and commercial solar installations where the advantages of solar micro inverters are more pronounced than in utility applications.Solar EPC Companies in the USA have started adopting this new product though the growing size of the Solar Inverter Industry has managed to temporarily lower the thread.SMA Solar,the biggest solar inverter company in the world recently bought a couple of firms like OKE Services to increase its presence in distributed electronics for the solar panel industry.Here is a list of advantages and disadvantages of Central Inverters and Microinverters.
April 14, 2011
Enphase Energy is one of the most innovative solar startup companies that have come up in the USA especially without a billion dollar DOE Loan guarantee backing it up.Enphase Energy makes solar products that help in the production of solar energy from solar cells rather than being involved in the production of solar panels themselves.Enphase has created an entire new category of Solar Inverters - Micro-Inverters.The company which has private has plans to do a stock listing through an IPO though no date has been announced.Enphase not only does the mundane task of converting the DC Solar Energy into AC Electricity usable by household appliances,but also incorporate communication chips which allow the monitoring of the performance of the solar panels remotely through the Internet.Enphase Energy has also entered into the closely related "Energy Efficiency" Industry by selling Smart Thermostats which can remotely monitor and manage the temperature of a house.Enphase has sold around half a million microinverters till date and has recently tied up with Siemens to distribute its products to installers worldwide.
April 11, 2011
Wind Power in India forms the biggest Renewable Energy Sector in India with an annual investment of around $2.5-3.5 Billion a year and a capacity installation of around 1-2 Gw a year.The Wind Industry in India has shown tremendous growth to become the 5th largest global market by installed capacity which totaled around 13 GW by end 2010.With the government of India mandating a target of 15% from Renewable Energy by 2020 from 6% now,Wind Energy stands to gain immensely.A Number of Private Companies like Caparo,Technoelectric,KSK,Orient Green Power,Greenko have newly entered the Wind Electricity sector and are setting up hundreds of megawatts of capacity each.Wind Energy Companies in India have also rushed to set up Wind Turbine Equipment Manufacturing alone or in JV with foreign partners while Global WTG Companies like Siemens,GE are adding to their Indian factories as well.States like Maharashtra which are low on Green Energy Capacity are giving additional incentives and subsidies to promote the use of Wind Energy while low speed Wind sites are being targeted as well.
April 11, 2011
Wind Energy Companies in India were already facing trouble when China's largest power equipment producer and the 3rd largest Wind Turbine Manufacture Dongfang Electric won major Wind Contracts from Power Producers.Note Chinese companies have become the low cost leaders in the Wind Equipment Industry and sell much below Western competitors.Leading WTG companies from the West like Vestas and Gamesa are reeling from Chinese competition and slowdown in Western markets.Suzlon too has been affected as Korean shipbuilders and Chinese wind producers have become major players.India is the world's fifth biggest wind energy market and is expected to continue to build 1.5-2 GW wind power plants per year for the next decade.
April 11, 2011
Meyer Burger (MBTN.S) the 6th largest supplier of solar equipment in the world jumped up 2 places by acquiring the 7th largest global solar equipment manufacturer Roth & Rau of Germany for a little over $500 million.The combined company will have revenues of over $900 million overtaking another Germany company Centrotherm with $825 million in revs.Note Applied Materials continues to be the market leader in the solar equipment market with $1.5 billion in solar equipment revenues just like it is the leader in the semiconductor equipment market.Note while European solar module producers have seen their marketshare and revenues crumbling in the face of the Chinese onslaught , there domination of the solar equipment continues. European Solar Companies had found things going tough in 2009 as the solar market changed radically with the Lehman crisis.As the prices of the raw material Polysilicon crashed and Chinese competition increased,these companies started bleeding red ink in a prodigious manner.The high cost structure of these companies with factories in Europe stood naked against the competition.With high debt loads,there was a high chance that these companies would go bankrupt.Most of them like Q-Cells,REC started to move manufacturing to Asia while Solarworld moved to Europe.
April 11, 2011
Market Vectors KOL ETF provides a good well diversified way to invest in Coal which is seeing a massive upsurge in demand driven by India and China.For investors looking for individual stocks here is a list of US Solar Companies and Stocks and Indian Coal Stocks.China with around 3 Billion Tons of Coal Consumption and India with another 500 million Tons depend on King Coal for majority of their Energy Needs.While China generates 80% of its Electricity from Coal,India generates around 65%.While both countries have Huge Reserves and Production of Coal,their voracious demand is leading to surging imports.These Imports are being sourced from countries like Australia,Canada and USA which are going through Coal Mining Booms.Ports are getting congested as Infrastructure failed to meet the growing coal needs of India and China..The Biggest Advantages of Coal its Abundance and Cheapness of Coal has made it the Fossil Fuel of Choice for Electricity Companies building power plants in developing countries despite its Drawbacks.This has led to a fight to secure Coal Supplies through vertical integration into buying up of coal mines,building ports and railways to transport Coal.Though India too faces some environmental opposition,massive ultra mega power plants with capacity of 4000 MW are getting built by new Indian private utilities.
April 11, 2011
Coal is the biggest source of Energy for Electricity Production in the world and its use is expected to continue to grow to 44% of the Electricity Production by 2030 (IEA).Despite Coal having many dangerous disadvantages,its Advantages of cheapness and abundance have made it the Fossil Fuel of choice.With global reserves estimated to be around 200 years,it does not have the "peak oil" characteristics as well.Though not a Coal Fan,nonetheless Coal stocks are a great investment choice due to the fact of its growing demand which is outstripping supply.China and India are massively growing their electricity,steel and cement production which requires billions of tons of coal.China consumers almost 45% of the global coal production while Indian demand is growing by leaps and demands as well.Indian Power Utilities are grabbing up Coal Mines in Africa,Australia and Asia to secure feedstock for their gigawatt thermal power plants.Despite its growing importance Coal does not have a lot of choice in terms of investment unlike Fossil Fuels like Oil and Gas.Here is a list of Coal Stocks which one can invest in and the sole Coal ETF - Market Vectors Coal ETF (KOL).