Electricity
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 8, 2010
NextEra Energy Resources which was previously known as FPL Energy has bought a number of Solar Energy Generating Assets in the past few months.NextEra is the largest Renewable Energy utility in the USA with around 18 GW of Capacity out of which around 6.5 GW is Gas and 7.5 GW of Wind Powered Capacity plus 2.5 GW of Nuclear Energy.NextEra Energy with its long experience in Green Energy Generation has now decided to expand its Solar Asset Portfolio buying equity stakes in Solar Thermal as well as Solar PV Farms in USA and Canada.NextEra Energy is already the biggest Wind Energy Producer in the United States and on the way to become the biggest Solar Energy Producer as well.While Wind Energy is facing uncertain times in the USA,Solar Energy is growing at a rapid clip driven by the sharp fall in Solar Panel Costs which have more than halved in the last 2 years.
December 7, 2010
Russia huge huge wind and solar energy resources with gigawatts of potential.It also has great geothermal energy resources as well however most of them are not developed at all.There is no significant support for Renewable Energy Resource as well with Green Energy capacity in low double digits (15 MW of Wind in 2006).With Putin calling Wind Turbine hazardous to birds and causing Environmental Problems,It looks like Russian Leadership will not change its Fossil Fuel Centric Policy any time soon.While Middle East Countries are dead against Climate Change efforts,they are developing Nuclear Energy and some Renewable Energy for exporting more Energy.However Russia does not even want to do that despite being a leader in Nuclear Energy.
December 6, 2010
Gujarat has been the biggest promoter of Solar Energy in India amongst all the other states.The State has already implemented a clear and forward looking Renewable Energy Policy with emphasis on Solar Energy.It has signed PPAs with a number of solar project developers under its State Solar Subsidy Scheme.While other states are looking mainly towards the federal subsidy scheme JNNSM to push Solar Energy Generation,Gujarat is looking to push Solar Energy on its own.Gujarat now has reportedly acquired 3000 acres at Charnaka village in Patan District which it will give to solar project developers to install solar panels.
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.
December 4, 2010
France has halted its solar feed in tariff bubble putting a moratorium on new applications for installing solar panels above for 3 kw installations.This has been done after applications for solar panels exceeded the 500 MW per year target set up by the French ministry.The Prime Minister called the solar feed in tariff subsidies reaching a “veritable speculative bubble”.France has already changed its solar feed in tariffs 2-3 times in 2010 as it tries to fine tune the subsidies so that renewable energy investors earn a decent return.However the fast decrease in solar panel prices has caught the bureaucrats off-guard which is not surprising.Feed in Tariffs in general have been badly designed by most public authorities around the world leading to huge bubbles.Czech has suffered from the biggest solar subsidy bubble on which it recently cracked down through taxes,50% cut in tariffs and other measures as electricity rates increased sharply as subsidies ballooned.Spain and Italy have found their Feed in Tariffs leading to runaway subsidies while Germany which has the most successful FIT program too had to cut FIT by a single ad hoc measure in order to prevent a bubble.
December 3, 2010
Coal Prices have started to increase in the international market alongwith other commodities like wheat,sugar,corn,gold,copper etc.But unlike other commodities,Coal has a disproportionate effect on Energy Prices.Note Coal is the principal supplier of top energy consumers like China,USA,India,Germany etc.The cheap price and abundance of coal has made it the fossil fuel of choice for generating electricity.The Technology for mining,processing and using coal to generate energy is well developed and cheap.This is the main reason for Coal's growing use despite its reputation as the Dirtiest Form of Energy.Coal Mining also regularly leads to hundreds of deaths even in developed countries like USA and New Zealand.However Growing Carbon Emissions due to Coal and its Supply Shortages has resulted in looking for alternative forms.Clean Coal Technology and CCS are looked upon as means to try and improve the carbon footprint of Coal.However the CCS Technology remains immature and expensive as of now .
December 1, 2010
India has got only 45 GW of potential Wind Energy Capacity of which around 25% has already been exploited.Renewable Energy in India needs to grow to around 70 GW at least in the next 10 years which means that Offshore Wind will also have to play a part.India's Wind Technology Research Institutions are already getting into the act measuring the Wind Speeds at different locations.Tamil Nadu,Gujarat and Maharastra are supposed to have good potential for Wind Energy.Tata Power is looking to setup a Wind Energy Farm off the coast of Gujarat.Suzlon which is the largest Indian Wind Energy Company is also seeking to generate revenues from this new sector.RePower,the German subsidiary of Suzlon has won a major contract to supply 6 MW Turbines to a Belgian Wind Farm in the North Sea which is fast becoming a Offshore Wind Energy Hub.
November 30, 2010
Nuclear Energy in India is going to quadruple in the next decade as India's power hungry economy requires increasing amounts of energy to sustain its growth.India's Electricity Capacity is targeted to reach 450 GW from around 160 GW at present which would require increasing the supply from all renewable energy sources as well as non-renewable sources.While Thermal Power will continue to remain the top dog with 60-70% of the capacity,Nuclear Power which forms just 3% of the current capacity is also poised to grow exponentially.India's Nuclear Power deal with USA have paved the way for India to again part of the civilian nuclear club which would allow import of uranium fuel and nuclear technology.It would also allow Nuclear Equipment Producers like Toshiba,Areva and GE to set up Nuclear Power Plants in India.Note India has a long history of a home grown indigenous nuclear power program with nuclear power capacity of around 4.5 GW.Despite facing low utilization in recent times due to inadequate supply of uranium fuel,the nuclear energy industry has continued its growth path.India is the only country spending large amounts in Thorium Fuel R&D as the country has huge deposits of the element.
November 30, 2010
The increasing amounts of Wind Energy and Solar Energy will require elements of a Smart Grid.China's electricty capacity is going to double in the next 5 years to around 1500 GW from 850-900 GW at present.This will require a huge increase in transmission capacity creating a huge market for electricity equipment giants like Siemens,ABB,Areva and Alstom.China also has the opputunity of creating a a Smart Grid as it builds Transmission Capacity form Scratch.Almost $100 Billion is going to be spent over the next 5 years attracting even IT firms like IBM and Cisco.IBM has already tied up with Chinese cities to roll out a pilot program.Note Smart Grid Technologies are still in their infancy.Chinese investment in Smart Grid will allow development of these technologies giving a huge boost to companies winning Smart Grid Projects in China.The Chinese Market despite its size is a highly competitive market with local companies competing mainly on price.Local companies that are benefiting from the Grid Investment are
November 29, 2010
China has the world's largest hydro power capacity at 200 GW and it plans to double the capacity by 2020.China is mostly dependent on Coal Power and Hydro Power to meet the electricity demand from its fast growing economy.China has the world's second largest electricity capacity at 850-900 GW second only to USA at ~1000 GW.This will be soon be overtaken as China continues to grow at 8-10% and its electricity per capita is still much below developed world standards.China is already the world's biggest consumer of Energy and emitter of Greenhouse Gases.Despite rapidly investing in Nuclear and Renewable Energy,China's voracious demand has made the growth of Fossil Fuel Energy unsustainable.It already consumes 3 Billion Tons of Coal per year and is already importing around 180 million tons per year.
November 29, 2010
India's JNNSM Phase 1 which is targeting 1000 MW of Solar Power Capacity by 2013 is in jeopardy due to irrational bidding,financing and small size.The 150 MW Solar PV and ~500 MW of Solar Thermal Capacity which has been put to bidding is going to see massive discounts.This will eventually lead to project winners abandoning these projects or delaying it inordinately,leading to a failure of the first phase.India Solar Thermal Bidding has already seen Massive Discounts from the base prices of Rs 15.31 set by CERC and the Solar PV project bidding for 150 MW is going to see equally ferocious discounts.Tata Power,which is India's largest private utility is staying away from these auctions due to the above problems.Renewable Energy in India has a huge growth potential with Solar Energy the brightest Green Energy Sector.This has attracted companies in droves leading to hyper competition for the first phase of India's Jawaharlal Nehru National Solar Mission.However huge competition in this subsidy driven sector is not necessarily good for the growth of Renewable Energy as irrational bidding by small players would lead to project failures.
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.
November 25, 2010
Asian Development Bank (ADB) has planned $2 Billion in Annual Green Investments in power hungry countries of Asia.For this the multilateral institution has sold multi-currency bonds in Japan to populate its Renewable Energy Fund.Note Green Energy is a capital intensive business and requires large amounts of low cost capital which is difficult to get in developing emerging markets of Asia.ADB is meeting this intermediary gap of funneling low interest capital from developed markets like Japan to capital deficient countries like India.Note ADB is already financing Asia's largest solar photovoltaic plant in Thailand.
November 25, 2010
Boeing,the US Aircraft and Military Equipment Supplier had decided to sell its high efficiency solar cells in 2011.Note Boeing Subsidiary had created a record a couple of years ago with a 39.2% multi junction solar cell.These cells are primarily used in spacecraft where low space requirements require the use of high efficiency cells without major cost considerations.Spectrolab has continued to improve on the efficiency of the cells reaching 41.6% in a NREL Lab Test.Boeing has claimed a 60% marketshare of the space solar cell market and hopes to replicate that success on Earth as well.Boeing had earlier said that it would set up a 300 MW capacity by 2010 and market solar cells to CPV companies such as SolFocus.Will Boeing be Successful at Selling High Efficiency Spectrolab Germanium Solar Cells
November 25, 2010
Wind Energy Companies are increasingly facing competition from a host of new entrants into the industry.The dominants firms Vestas,Gamesa and Suzlon have seen their stock prices fall steeply due to declining revenues and margins.A number of Giant Industrial Firms have entered the Wind Energy Industry to diversify from the slow growth in their own sectors.Korean Shipbuilders have invested heavily in the Wind Turbine Manufacturing en masse to take advantage of the secular growth of Wind Energy.Chinese companies have risen from virtually nothing 5 years ago to become Top 5 Global Wind Energy Players.Companies like Sinovel,Goldwind,Mingyang Power are now trying to spread their wings outside of China.India's Wind Energy Industry is comparatively small but it has also seen a number of wind power companies setting up facilities with technology licensed from the West.The slowdown in the Western Markets has led to huge problems for dominant Western firms like Gamesa and Vestas.It has led to painful restructuring for Vestas which has fired thousands of workers from its domestic manufacturing base in Denmark.Gamesa has also seen management and ownership turmoil as WTG Orders have evaporated and its competitive position has eroded.GE,Suzlon,Gamesa and Vestas are all investing in the Chinese market which has grown exponentially in recent times and which is expected to form 50% of the Wind Energy Demand till the next few years.
November 23, 2010
India has followed the example of Korea,China,Japan,USA and others in providing a capital subsidy to promote the use of Green Transport in India.Note China and Korea have been very aggressive in providing support and subsidy to the Green Industry.USA has also been providing soft loans and capital grants for manufacturing to Electric Vehicles and Lithium Batteries besides spending millions of dollar in R&D.Obama wants the US to become a leader in Battery Manufacturing with a 40% Global Marketshare while China recently unveiled a plan to create national champions in the Green Car Industry.Japan has also been supportive of Hybrid and Electric Car Technology with Honda and Toyota looking to dominate this emerging Auto Category.
November 23, 2010
The US Government has recently approved a number of Large Scale Solar Thermal and Photovoltaic Projects as Renewable Energy Projects rush to meet the December 2010 Deadline for getting the 30% Subsidy Cash Grants from the US Treasury.California has been leading the way with gigawatts of solar thermal plants being approved.However these projects are facing resistance from local groups due to different reasons.Green Activists are questioning the Environment Friendliness of these projects due to the harmful effects on endangered desert wildlife.While some projects have dedicated millions of dollars for the Rehabilitation and Resettlement of Tortoises and other wildlife,Green NGOs are not convinced.The 660 MW,$2 Billion Tessera Solar Thermal Plant has been put under a review of its approval due to protests that the approval was done with haste and without following proper procedures.Note Large Solar Thermal Projects need hundreds of acres of land and are being frequently built on public land.
November 22, 2010
Coal Demand continues to grow at steep pace in India and China defeating the efforts of Climate Change Activists in the Developed World.Building a Thermal Power Project in Europe and USA has become exceedingly difficult due to concerns of the detrimental health,air quality and pollution effects of Coal Derived Electricity and Heat.Coal is considered as the Dirtiest Form of Fossil Fuel Energy making it a prime target in Climate Change Fighting Efforts.However 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.
November 22, 2010
India's ambitious JNNSM Plan to build 20 GW of Solar Capacity by 2022 has seen projects being awarded for 479 MW of Solar Thermal Projects under Phase-1.The Solar Project Bidding was expected to be extremely competitive and it turned out to be exactly that with dis conts of more than 30% being offered to the base price of RS 15.31 for Solar Thermal generated Electricty.Note Rs 15.31 was determined to be a decent price on which a Solar Thermal Plant Developer could get decent returns just a year ago.This means that a 30% Discount would lead to zero or very low returns for the Solar Thermal Winners.According to news reports there are 7 winners for these Solar Thermal Plants 6 of which will come up in Rajasthan which seems to be the biggest winner of these Solar Subsidy Scheme.Andhra Pradesh is the only other state to win a Solar Thermal Project.There were about 60 applicants for the Solar Thermal Part of the Phase 1 JNNSM Bidding from which these 7 have been selected.
November 18, 2010
Renewable Energy Certificate (REC) Policy is starting in India tomorrow which will allow Green Energy Generators to earn additional tariff.Note the REC Mechanism is also present in different forms in Italy,USA and Australia and has proven a good incentive to promoter Renewable Energy in those countries.India's Electricity Regulator (CERC) has been actively implementing different orders to boost Green Energy Generation.CERC had earlier mandated a 6% Renewable Energy Percentage from Alternative Energy which would go upto 15% by 2020.The REC Policy will help in achieving those targets by providing a pseud market linked mechanism to inentivize Green Power Producers.
Who will Benefit
Renewable Energy Companies and Green Utilities are set to benefit the most from this Policy.Suzlon has already welcomed the policy saying that Financing will ease for Renewable Energy Projects.Orient Green Power,the largest Green Focused Utility will also be a big beneficiary.Local Indian Wind Turbine Companies should also benefit from the Scheme.It also provides companies outside the JNNSM to get decent returns from solar generation as the REC band for Solar REC has been set between Rs 12-17/Kwh.India need to increase Renewable Energy Capacity by at least 50 GW in the next 10 year to meet the 15% CERC Target
November 18, 2010
Toyota is a Leader in Hybrid Vehicles with its iconic Prius the biggest selling Hybrid Car by Far.Toyota has been cautious about the growing rush into the Electric Vehicle Category.It has tied up with the much hyped up US Startup Tesla to introduce an EV RAV4,however its concentrating its energies on the Hybrid Car Market.Note another Japanese Automajor Honda is putting its bet on the Hybrid Segment of the Green Vehicle Market.The Economics of the Electric Vehicle Market as well as its Carbon Footprint is suspect despite all the media hoopla being created around it.While the Competition has increased substantially around both the EV market and its allied Battery Sector,the profits are far off.Hitachi has forecast losses for the next 2-3 years as China and USA compete to create national champions in the EV sector with Obama aiming for a 40% global marketshare .
November 17, 2010
Giant Chinese Utilities Datang and Huaneng are doing roadshows for the IPOs of their Renewable Energy Arms which would raise more than Billion Dollars Each.Note Green Utilities have become a separate Green Investment Class with lots of Asian and European Utilities already doing an IPO of their Green Subsidiaries or are in the process of doing so.However 2010 has been a bad year for Green Energy Stocks and Green Utilities have been no different.While First Wind Holdings a pure play USA Wind Farm Developer failed to get listed despite lowering its Issue Price,Indian Orient Green Power and Italian Enel Green Power have performed miserably even after listing at a much lowered stock price.Despite the negative sentiment towards Green Utilities mainly due to the Headwinds being faced by Wind Industry in 2010,Green Utilities are one of the safest ways to invest in the Alternative Energy Sector given the nascent highly volatile nature of the industry.
November 16, 2010
India has a huge potential in Solar Energy Generation which is being strongly supported by the Federal Government under the JNNSM Scheme and by individual States […]
November 15, 2010
Solar Energy in India represents one of the best Energy opportunities in the 21st Century.However the growth at least in the initial stages will be geographically unequal.This is due to the fact that Solar Power requires strong government support and subsidy currently.Without a proactive administration which smooths out the process of setting up a solar plant,growth of solar energy is almost impossible.The Indian Federal Government has already given it a strong push targeting 1000 MW by 2013 and 20 GW by 2022 under the JNSSM.While the Subsidy Program is facing some initial hurdles due to debt financing and aggressive project bidding,the long term secular growth story remains good.Some states have also been aggressive in supporting solar energy namely the western states of Gujarat and Rajasthan.
November 15, 2010
India's 150 MW Solar Allocation to PV Technology has seen overbidding upto 10 times and the winners will be decided based upon the discounting on the Rs 17.91/Kwh (40c/KwH).The discounting promises to be clearly be irrational and loss making as Large Conglomerates and Integrated Solar Companies fight with each other to win projects at any cost.Feed in Tariffs across the world has only worked out well where there is no discounting or bidding mechanism.In case of bidding,especially in immature nascent markets,the winners of the projects end up as the losers.Renewable Energy also ends up on the losing side as many of these projects are not completed or have to be restructured defeating the entire purpose of the Subsidy Scheme.India's Solar Energy Sector promises to be one of the biggest energy opportunities in the 21st Century.However this will require a very smart subsidy strategy by the government
November 15, 2010
First Solar,the US based Cadmium Tellurium (Cd-Te) is the lowest cost panel producer in the world today if you don't include any penalty for low efficiency.Even if you penalize the Cd-Te Technology for its lower efficiency vis-a-vis the higher efficiency crystalline technology,First Solar is clearly the leader with a core cost of 74c/watt.The company has a roadmap of reducing the cost to 52c/watt by 2014 and given its track record it seems quite achievable.In Cd-Te,some new competitors have claimed even lower costs than First Solar but they have yet to prove it in large scale production.General Electric,Abound Solar are some of the other Cd-Te players which are planning commercial production in a year or two.But with around 2 GW of capacity,they will have a lot of catching up to do.
November 14, 2010
The South Korean government is the most aggressive administration when it comes to establishing a Green Economy of the future.The Koreans have established the biggest Green Stimulus as a percentage and are following it up with massive investment in different parts of the Green Economy.Korean Chaebols LG,Hyundai,Samsung,Daewoo,Posco,SK Energy,Hanwha have taken the cue from their home country in charting out an ambitious roadmap in solar,wind,green vehicles.Hyundai has ramped up investment in the Solar Energy sector tying up with Glass Giant Saint Gobain,while LG and Samsung are going it alone putting up facilities to produce crystalline solar panels.Hanwha has bought a big Chinese solar panel producer while Daewoo is setting up WTF facilities.
November 13, 2010
However Solar Capacity in the Industry has increased rapidly particularly in Taiwan and China.Besides Semiconductor and LCD Heavyweights like AUO and TSMC have made huge investments into Solar Production.Korean Companies are too making a strong entry into the already crowded segment.Despite some capacity build in the wafer and module parts of the supply chain,Taiwan remains largely a cell producer.Compared to the integrated Chinese producers like Trina,Yingli,LDK and others,Taiwanese Solar Makers are vulnerable to sharp price cuts.They depend on European customers who are largely uncompetitive and would face huge pressures with the decline in the German market.Chinese producers have much lower costs due to their vertical integration which currenly most Taiwanese lack except Motech.Taiwanese Cell Capacity is set to increase manifold next year from the current 5 GW.Most of the Tier 2 Cell Producers would be running empty while even Tier 1 players will see a sharp decrease from this year.
November 13, 2010
Solar Energy Future Growth has been vastly underestimated by policy makers and analysts but private companies are recognized the huge potential.India's JNNSM Policy which is meant to jumpstart India's Solar Energy has drawn huge interest from both domestic and foreign companies.The number of Solar Companies in India are growing at a rapid pace attracted by the huge opportunity.While starting troubles like project financing of debt etc are present,the long term growth potential of Solar Energy in India is tremendous.Global Industrial Giants like GE,Siemens have already established or in the process of investing huge sums of money to capitalize on this Green Trend.Now French Giant Areva has joined them.Note Areva is the global leader in nuclear equipment technology and is not known for its prowess in Solar and Wind Energy.However the company is making a play in Solar Thermal Technology where it hopes to use its existing skills and knowledge.Areva had acquired US startup Ausra which had fallen on hard times earlier.However Areva has not won too many Solar Thermal Projects in the recent past.However things may change starting with India