Green
November 29, 2010
Toshiba,the Japanese Conglomerate with diversified interests in Electronics,Nuclear Energy Equipment,NAND Memory is leading the Japanese Search for Rare Earth Minerals.Fears of Chinese monopoly over production of REE came true,when Exports to Japan were blocked over a shipping incident.EU and USA have long been concerned with the Chinese control of 95% of the global REE production with USA even thinking of taking China to the WTO.Japan has recently drastically increased its investment into finding new sources of Rare Earth with recent deals with Vietnam,India,Kazakhstan and others.Sojitz, a Trading Zaibatsu recently signed a long term supply deal with Lynas.Toshiba is the other Japanese firm actively scouting for Rare Earth Minerals looking for newer processes and geographies.
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 24, 2010
Australian Company Lynas Corporation is going to accelerate the production from its Mt. Weld Mining Project in Australia in order to meet increased demand from Japanese companies.Lynas is building a 20,000 tons rare earth mine in Australia with processing to be done in Malaysia.The company had raised around $500 million with strong institutional backing to boost the supply of non-Chinese Rare Earth Production.The Rare Earth Mineral Frenzy has cooled a bit but the supply picture is still in a constrained mode with Chinese exports of REE falling by 77% in the month of October.Japan is the most exposed to the Chinese slowdown of REE minerals with a large processing industry and consumption sector.Japan has been frantically looking towards the surrounding seas,Vietnam and Kazakhstan as China has used its monopoly position for political ends.
November 23, 2010
Chines Rare Exports in October have dropped dramatically to 3 figures from around 3660 tons in September reflecting the Chinese-Japan Tensions and Export Quotas imposed by […]
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
Climate Change in the last year has faced one hit after another which should culminate in the failure of the Cancun,Mexico talks which is to start on November 29.Note there are not many expectations from the Cancun Climate Change negotiations in sharp contrast to the Copenhagen Talks in 2009.Despite the global attention and expectations from the Danish hosted Climate Meet,Copenhagen was a total disaster putting Global Warming in the Backburner despite more and more evidence of the massive global harmful effects.In the recent year,the Fossil Fuel Lobbies have been trying to discredit the very agency in charge of spearheading the war against Global Warming.They have been largely successful with global polls revealing a distinct cooling towards Global Warming Efforts.China despite huge investments into Clean Technology is emitting more Carbon Dioxide while USA has completely given up its Global Leadership on the most pressing World Problem.Here are the Reasons why the Cancun Climate Change Talks would fail.
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 20, 2010
Solar Panels has suddenly become one of the biggest industrial consumers of the Silver Metal in 2010.The massive growth of the solar industry has surprised analysts and forecasters alike and caused surprising demand in the most unlikely of places.With 15-17 GW of Solar Panel Production estimated in 2010,the silver consumption will be around 65 million ounces or 1800 tons.With production of around 21000 tons,the Solar Industry is now responsible for around 9% of the global Silver production.Note Despite Silver touching new record highs,it has not affected the solar prices much which have continued to decline by almost 50% in the last couple of years.
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
Green Buildings are a huge multibillion dollar industry but from an investor's point of view the information and investment avenues about this very important Green Sector remains surprisingly scare.Most of the investment options in Green Buildings remains confined to huge conglomerates like Johnson Controls,Honeywell,Schnieder Electric,Siemens and a few small startups like Serious Materials.Most of the information about Green Buildings can be gleaned from the US Green Buidling Council and EPA.Interest in Green Buildings started in the 1970s and still remains a niche concept despite huge strides in the 21st Century.Certifications like LEED has brought awareness about Green Buildings but they still occupy a remote corner in the Green Investor's mind.In the Green Building Series,I will try to explain the concept of Green Buildings.For a start here is the Definition of a Green Building also known as a Sustainable Building.
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
Siemens has planned to increase its Environmental Revenues to Euro 40 Billions by 2014 which is quite a big jump considering the large base.GE is its biggest competitor which is also rapidly increasing investment and research into Renewable Energy.Areva,ABB,Samsung,LG,Hyundai,Toshiba,Sharp,Panasonic,Mitsubishi are other industrial giants looking to rapidly increase revenue from Clean Technology.Siemens has a definite technological and incumbent advantages however the competition is quite formidable.Siemens has made important wins recently in the field of high speed railways,new generation high voltage DC electricity transmission,offshore wind etc.But it lacks size and scale in the fields of nuclear and solar energy and has little presence in the area of Energy Storage as well.While Siemens has bought Soliel in the Solar Thermal field,it lacks a Solar PV product portfolio.Siemens however remains a good long term safe green investment in a volatile cleantech sector.
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
November 13, 2010
Australia has shortlisted 8 projects with 4 Solar PV and 4 Solar Thermal Projects for its Solar Flagship Program which will be decided in 2011.BP Solar with 150 MW and Suntech/Infigen with 195 MW are on the shortlist.The other 2 companies are energy utilities which are proposing to use Cd-Te Panels ( I think from First Solar).Note both of these energy utilities are small and might face problems in fund raising and execution.The firms shortlisted for the Solar Thermal Projects don't inspire much confidence either.The selection procedure and how the subsidy will be disbursed has ran into controversy with accusations of bias and partiality.WA has not gotten any projects while Queensland province has gotten most of the projects.The firms shortlisted have also come under fire as they don't have much experience.Not much information on how the firms were shortlisted but these companies are definitely not the best or cheapest by a big margin.Australia has generally made a mess of promoting renewable energy with New South Wales cutting feed in tariffs sharply after giving an overly generous subsidy.The Solar Flagship Program looks like an expensive mistake in the making if it comes to fruition.
November 4, 2010
AUO is investing massively in Solar Energy to build a multi Gigawatt capacity in partnership with US Solar Efficiency Leader Sunpower.Not only is AUO building a huge factory in JV with Sunpower in Malaysia,it has also made plans to set up a 2 GW Solar Crystalline Solar Cell Fab in Taiwan.This will be a 50:50 mix of multi and monocrystalline technology.Note the solar market despite seeing a massive 100% jump in solar demand in 2010 faces a huge supply overhang from a number of new large players.TSMC,Samsung,Hyundai,Saint Gobain,BYD are just some of the heavyweights ramping up their solar expansion plans.AUO faces a tough time in this crowded market which already has Chinese incumbents establishing gigawatt capacities.A new player needs to differentiate himself in the increasingly commodity market that solar modules have become.
November 4, 2010
In my previous missive I had opined that the US Solar Energy Policies were misguided as President Obama visited a Solyndra Factory and the US Department […]
October 30, 2010
The US Wind Industry has been facing headwinds since the beginning of 2010 due to a confluence of adverse factors.This has continued till the 3rd quarter of 2010 with AWEA reporting just 395 MW of capacity installation and a 72% fall in wind capacity since the beginning of 2010.This is a drastic fall and the main reason for the Wind Industry falling into a coma is the legislative lethargy of the US Government.Despite lots of noise,no climate change or energy legislation has passed the Congress and Senate leading to the moribund state of the US Wind Industry.Note China and Europe are pressing full throttle on Green Industry Growth with a climate laggard like UK also taking a leadership in the offshore wind industry.China will continue its strong wind growth in 2010 installing around 50% of the overall global capacity.Its Wind Companies like Sinovel,Goldwind and Ming Yang are now trying to penetrate foreign markets while US Wind Turbine makers like Clipper have sold themselves unable to survive independently.
October 30, 2010
Planned Czech Solar FIT cuts will heavily favor subsidies to Small Distributed Rooftop Installations
Czech has seen the biggest Solar Growth Explosion compared to its size powered by extremely generous feed in tariffs.This has made Czech one of the top solar installers in the world and led to a huge public backlash.The Czech government has responded by proposing to bust the Solar Energy Bubble by drastically cutting down the Feed in Tariffs.The administration is also trying to reign in the ballooning subsidies from existing solar plants by imposing taxes on solar plants and carbon credits.This is being done as the Czech consumers face a 15-25% increase in electricity prices next year.The country had little option as its very badly designed tariffs had led to a situation where Czech Industry faced the prospect of becoming uncompetitive.