Stock Market
March 28, 2011
Free Solar Panels don't exist just as Free iPads don't exist.Some websites and companies advertize free solar power or free solar panels based on government subsidies.Note even these free solar power offers are not completely free as they have a payback periods depending on how much government subsidies are given.Nobody is going to give you a free solar panel or a free iPad without a catch.
March 28, 2011
British Petroleum (BP) the multi billion dollar Oil and Gas Conglomerate is a strange player in the Renewable Energy Sector of Solar Energy.BP was a dominant company amongst the top 10 global manufacturers of solar panels till a few years ago.However the lack of interest on the part of management,low investment,lack of R&D has made it a bit player in the fast growing solar panel market.Companies which did not exist till a few years ago have outpaced BP to become top solar panel producers.However BP Solar Panels continue to sell in a number of market because of existing sales relationships and brand name.However it is only uneducated and uninformed consumers who are buying BP Solar Panels in my opinion.BP Solar Panels should be avoided both from an economic point of view and from the environment perspective.
March 28, 2011
Dangerous levels of radiation has been detected in the water around the reactors as the Japanese government says that a partial meltdown has occured.While there is no confirmation about cracks in the pressure and containment vessels around the reactors,the radiation in the water inside Unit 2 has tested at radiation levels some 100,000 times normal amounts.Workers also discovered radioactive water in the deep trenches outside three units, with the airborne radiation levels outside Unit 2 exceeding 1,000 millisieverts per hour _ more than four times the amount that the government considers safe for workers.TEPCO officials said Sunday that radiation in leaking water in Unit 2 was 10 million times above normal.TEPCO has been giving confusing figures for radiation making it all the more difficult in understanding the gravity of the nuclear crisis.Note this disaster is only second to Chernobyl in its scale of radiation destruction.Tokyo and other parts have reported intermittently about high radiation in water and air.A ship from Mitsui was recently turned back from a Chinese port because of high levels of radiation.
March 28, 2011
India's Supreme Court castigates ED for incompetence on Black Money Hasan Ali Hawala Corruption Case
India’s Supreme Court has become a schoolmaster for the errant Indian investigative agencies which keep showing glaring incompetence and reluctance to go after top offenders.The Indian […]
March 19, 2011
Chinese companies have risen from virtually nothing 5 years ago to become Top 5 Global Wind Energy Players.The Chinese companies have seen massive growth on the back of a strongly growing domestic market.China which now accounts of 50% of the world Wind Turbine market in 2010 is expected to see continued strong growth with the Chinese government setting a target of more than 100 GW by 2015.The growth of the Chinese Turbine Producers has been mainly due to the domestic content requirement set by the Chinese government earlier.The government owned utilities also favor the domestic companies leading to their astounding growth.
March 19, 2011
While Chinese pure play solar panels companies have already captured a majority of the global solar module market,the entry of newer Chinese players into the solar energy market refused to stop.China's 5 largest state owned utilities have already made their presence felt in the Chinese domestic solar installation market by bidding extremely low to win projects under the Chinese Solar Subsidy program.Automotive companies like BYD have also announced a big investment into solar panel manufacturing while Hanlong and Bluestar Groups have decided to invest in the CPV and Polysilicon sectors respectively.
March 19, 2011
Coal Mines in Indonesia,Australia,Africa and North America are selling like hot cakes as Indian,Chinese companies as well as mining conglomerates like Rio Tinto,Vale,BHP Billiton fight to secure raw materials.Note India and China are consuming huge amounts of coal to power their thermal plants.While China consumes a monstrous 3 billion tons,Indian demand is rising at more than 10% a year though on a smaller base.Coal is the cheapest form of power despite its polluting and health hazardous affect.Though Coal Plants in Developed countries are becoming much more expensive to build due to taxes and opposition by environmental groups,there is no stopping their furious growth in countries like China and India.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
March 19, 2011
India's Economy is being hampered in its growth trajectory by lack of infrastructure which is leading to supply side problems.India suffers woefully from a lack of roads,electricity,ports etc. and almost a trillion dollars is going to be spent in the next few years as demand outstrips supply.India's Machinery and Capital Goods Industry is set to capitalize on this strong growth and is already seeing massive orders which are 2-3 years worth of their annual revenue.While the stock valuations of the capital goods equipment manufacturers has come down a bit from the heavy days of 2008,they are still quite high reflecting the strong growth potential.India's Engineering Industry is also composed of a number of smaller manufacturers that export light engineering equipment worth several billion dollars mostly to developing countries.India's Machinery Sector is composed of a mix of government owned and private companies as well as the giant capital goods MCN conglomerates like Areva and others.Here is a list of the major Indian equipment manufacturers.
March 19, 2011
German's Solar Energy Market is the biggest in the world by a fair margin.Germany installed almost 6 gigawatts of solar panels in 2010 taking the total installed capacity to almost 16 GW which is 40% of the world's total installed solar capacity.Note Germany's Photovoltaic Solar Electricity now forms almost 10-15% of the total electricity production in the country at peak time.Note Germany's solar industry got a renewed boost when 7 old nuclear plants were shutdown following Japan's Fukushima Nuclear Disaster recently.Previously Germany had decided to extend the operating life of its Nuclear Plants despite stiff opposition.Germany Solar Subsidy which is framed under the Renewable Energy EEG law has made Germany one of the world's leaders in Wind,Solar and Biomass Energy.Germany's Manufacturing Industry has benefited from the strong domestic market with many of the world's top solar panel companies located there.Solar equipment,inverters and cell companies are also present in large numbers.Recently Germany amended its Feed in Tariff Law to slowdown the exponential growth in solar panel installations.This is over and above the regular reduction in solar subsidies done each year.
March 16, 2011
Japan's Nuclear Crisis has taken a turn for the worse as US Energy Sectratary CHU saying that a Partial Meltdown has occured.Even IAEA has said that the situation has turned very serious with 4 of the reactors suffering from core damage and 3 of the reactors have their spent fuel rods exposed to the atmosphere as cooling systems have failed.While Japan has almost imposed a news blackout,the damaging news comes from the US administration which has said that the crisis exceeds that of the Three Mile Island already.Japan has doubled the number of workers as the crisis continues to escalate.Authorities battling the nuclear disaster at the Fukushima Daiichi power plant have doubled the number of workers on the site to 100.Helicopters have failed to cool the plant using water due to radioactive plumes and now the desperate Japanese are planning to use water cannons to spray the pools.
March 16, 2011
The situation at the Fukushima Dai-Ichi power plant continued to be desperate as new fires and explosions rocked the nuclear plant.The utility which owns and operates the Nuclear Reactors Tepco said that the containment structure may have been damaged as smoke was seen from top of one of the reactors.70% of the Fuel Rods at Nuclear Reactor 1 and 33% at Reactor 2 have been exposed.This means that these fuel rods are not being cooled and may be melting leading to increased radiation poisoning hazards.New Fire broke out on the morning of 16th March at Reactor No.4 and containment chamber at Reactor 2 is damaged from Reactor 2.The problems at the Nuclear Plant seems to be increasing with no solution in sight.What is worse is that the 2 reactors No.5 and 6 which have been dormant all this time have all seen their temperature .increasing.Temperatures in the spent fuel rod cooling pools of the shuttered No. 5 and No. 6 reactors were rising as of 7 a.m. today to about 60 degrees Celsius (140 degrees Fahrenheit)
March 15, 2011
The backlash against the new and existing Nuclear Power Plants has started in different places around the world despite defiant expressions by Nuclear Plant Owners and Operators.While China and Italian utility Enel have said that they will go ahead with their billion dollar investment plans,Switzerland and Germany have put nuclear plant extensions on hold.Note Germany had extended the life of Nuclear Plants in the country by 10 years after extensive lobbying by the Nuclear Industry.This had led to huge protests from the Opposition Greens but the government had gone ahead in order to reduce Power Costs.However Merkel has been forced to eat humble pie and has said that a 3 month review will be done to check the safety of the Nuclear Reactors.Switzerland has also come out and put the plans for new Nuclear Reactors on Freeze.
March 15, 2011
The explosion and fire at the Japanese Nuclear Plant in NorthEast of Japan has led to the release of a small nuclear plume above the reactors.The southern winds have caused this radiation to spread in many of the prefectures in Japan and cesium and other radioactivity has been detected in the capital of Tokyo.Note Radiation does not affect the human body in small doses as radiation is present in our everyday lives at well.However the increase in radiation concentration can lead to severe health hazards and in extreme cases even death.It is almost impossible to escape radiation effects unless one has special nuclear,biological warfare protective equipment.Note Radiation in Japan is still at quite mild levels and seems unlikely to cause any major health hazard.Radiation will need to increase about 1000 times from the current level for the situation to become serious as of now
March 15, 2011
This Nuclear Energy Disaster in the Age of Twitter and Facebook will vehemently increase the opposition to the setting up of big Nuclear Plants.The Radiation Leak and subsequent health hazards will make it impossible for a Nuclear Reactor to be located except in very remote areas like the Sahara Desert.NIMBY protests are going to almost kill the Nuclear Industry in the next decade at least in democracies.The Nuclear Industry will take a long time in establishing its trust amongst the citizens.Without Nuclear Energy,the other major forms of Renewable Energy ,Solar and Wind Energy have to gain.Already Switzerland and Germany are deferring the planning and extension of Nuclear Energy.Other countries are putting safety reviews.Note the costs of environment regulation and nuclear waste disposal are already quite high.This will make new nuclear plants uneconomical as they are already facing huge cost overruns . Ask Areva in Finland and Constellation in the US.
March 15, 2011
Japan's Nuclear Disaster took a turn for the worse as another Fire and Blast in the Nuclear Reactor led to Severe Radiation Leak.Japan's PM warned people within 20 miles of the Plant to evacuate and within 30 miles to remain indoors.There is a high probability of the Nuclear Containment Vessel may get Damaged as Temperatures kept rising with the failure of the Cooling Systems.Radiation Levels at the reactor reached 965.5 micro sievert per hour, later jumping to 8,217 micro sievert at 8:31 p.m. The level would be more than eight times the 1,000 micro sievert limit to which people can be exposed in one year without effect, according to the report.The Wind was blowing south which implies that one of the highest population density cities in the world - Tokyo might feel the affects of Radiation.Prime Minister Naoto Kan urged calm in a national address Tuesday.
March 14, 2011
Biomass Energy accounted for most of Human Energy Consumption before the 20th century before fossil fuels took over.Biomass Energy still accounts for 1/3rd of Energy requirements in a lot of countries and is the primary energy source for heating and cooking in rural communities.Biomass Electricity accounts for around 1% of the world's electricity capacity of around 5000 GW.With advancement in Biomass Technology a number of Large Scale Biomass Energy Plants are being built in Europe.Even in developing countries like India,the government is strongly supportive of biomass energy and is giving various subsidies to support this alternative energy.Biomass Energy can play an essential role in off grid markets where there is a decent availability of feedstock.Each year millions of tons of crop residue and animal waste is converted into carbon emissions without being used up.Biomass Energy can convert this feedstock into useful electricity without adding carbon to the atmosphere.Waste to Energy is the most unexploited forms of energy and there exists enormous potential here also.Here is a list of the Biomass Energy and Wood Pellet Companies in the World.Note most of the companies are small in nature compared to the wind and solar companies.Most of the biomass electricity companies still have their biomass plants in the drawing or construction stage.Wood Pellet Companies are mostly private companies and not traded on the Stock Exchange.
March 13, 2011
The Tsunami Nuclear Energy Disaster which is unfolding in Japan highlights that Nuclear Energy can cause some very serious damage though the safety of the nuclear reactors are highly touted in the media by the Nuclear Energy Industry.These Nuclear Plants in Japan are quite old but so are most of the Nuclear Energy facilities in the West.Most of these Nuclear Plants are susceptible to serious natural disasters like earthquakes and tsunamis.In case of a nuclear meltdown the radiation from the Nuclear Plants can not only cause more deaths and injuries from natural causes but also make the area around the Nuclear Plant uninhabitable for hundreds of years.India and China are on a major Nuclear Energy Building Spree even though their nuclear plants have faced minor accidents in recent years.With this Nuclear Disaster,the protests in the se countries are set to grow with NIMBY becoming the biggest hurdle.Already protests are being held in Jaitapur in Maharashtra over damage to the ecology,expect the Japan's nuclear reactor incident to basically kill this Areva-NPCIL plant.Nuclear plants in the US and Europe are already facing huge cost and time overruns.This new problem should cause those projects to also die off.
March 10, 2011
India had set up around 500 MW of Biomass Capacity by 2007 and has increased it by almost 150 MW since then to reach around 1 GW capacity today.Most of Indias' Biomass Electricity is being generated in Andhra Pradesh,Maharashtra,Tamil Nadu,Karnataka and Rajasthan.A lot of new capacity is being built in Punjab and Chattisgarh as well.India with a total biomass capacity of around 1 GW is planning to increase it by 10 times to 10 GW by 2020 by setting up a number of 1-2 MW biomass plants around the country.Around 400-600 acres of land are required to support 1 Mw of Biomass Capacity and 200-300 acres using energy intensive crops.This is much more than what is required for even thin film solar energy which is around 10 acres.The large land requirements make Biomass Energy Scalding a difficult proposition,however it has a great use in niche applications where there is a large amount of crop and animal residue/waste
Biomass Energy is clearly seeing a massive investment of private capital by a number of Green Energy companies.A number of these companies are backed by Private Equity Players.Almost all Sugar Companies in the country co-generate biomass power at their sugar plants.The size of the segment is quite large and has not been listed here.In India 3 types of companies are focused on biomass electricity - Sugar Companies,Rice Companies and Green Energy Utilities.The first 2 categories will be successful as their cost of feedstock is essentially zero while the the success of the third kind will depend on the management and execution.
March 10, 2011
Solar Companies have proliferated in the last decade as the Solar Energy Industry has seen a 50% CAGR in the past 10 years exploding by almost […]
March 8, 2011
India is set to see a massive infrastructure capex cycle over the next decade as the existing infrastructure fails to support India's massive population.$500 Billion is expected to be spent in India's next 5 year plan with expenditure concentrated on roads,railways,ports,water,power,transportation etc.Capital Goods,Construction and Real Estate Companies will benefit hugely from this capex cycle.A Number of Companies have been raising capital from the Indian Stock Markets as India requires massive amounts of capital to fund its ambitious growth plans. Here is the list of top construction companies in India on the basis of their tie-ups with their international counterparts, technological advancements, generating money from the market to trigger their expansion plans and for establishing an entire township in the wastelands and making it the hottest commercial destination.Note Infrastructure companies in recent days have taken a massive beating falling to their 2008 Lehman lows.This is due the the numerous scams hitting the country,delays due to land acquisition,high interest rates and slow execution.However the long term potential of these construction/EPC companies in India remains excellent due to the massive investments.
March 8, 2011
Solar Energy in Japan has a long future dating back to 1994 when the government introduced capital subsidies to boost solar energy installations on rooftops.Till 2004,Japan was the largest solar market in the world after which it was overtaken by Germany.After 2004,the growth in the solar industry tapered off as the government reduced the subsidies for solar panels to almost zero.The huge domestic market gave rise to Japanese companies like Sharp,Mitsubishi,Kyocera,Panasonic-Sanyo become top solar panel producers in the world.However the low cost Chinese solar module producers have pushed back most of the Japanese companies.Since the last year,the Japanese government has again started giving generous solar subsidies and feed in tariff to boost the renewable energy production in the country which remains far off targets.This has led Japan to become the top non-European market after USA and the growth seems set to continue in the future as well.Japan has relatively low installations costs and is much nearer to grid parity.Also lack of wind energy makes solar energy more attractive as a renewable energy choice.While large scale solar installations in Japan are almsot absent,there remain large numbers of rooftop solar installations.
March 7, 2011
Siemens derives almost 30-35% of its annual 20 Billion Euros in revenues from its Environmental Portfolio.The company is looking to spin out its LED Lighting OSRAM business in an IPO later this year.Siemens has a market capitalization of around $116 billion so doing a simplistic analysis the market cap of its Green Business would be around $35 billion dwarfing the market cap of First Solar or Vestas.
March 7, 2011
Lovable Lingerie is an innerwear textile company that is coming out with a $20 million IPO.Unlike other totally junk issues which are totally hands of market operators,this one seems to have decent fundamentals and the valuation is not too expensive either.The company has managed to sell 6% pre-IPO to Sequioa Capital which is one of the blue blood PE firms in the country.However this should not be an endorsement given that a number of their investments have bombed in the recent mid cap and small cap carnage.Corporate governance and management issues in small companies in India is totally out of control so investing just based on pure fundamentals does not help.Also a number of other companies in the same sector in textiles remain at attractive valuations.That said the company does have good differentiation as it leverages on the fast growing Indian consumer growth story.The company sells Lingerie though top retail outlets like Lifestyle,Shopper's Stop in top Indian metros and has good brand recall.Here are the positives and negatives of the company based on its DRHP.
March 6, 2011
A Clean Technology REIT is about to be launched which is going to invest in real estate which generates clean energy.The strategy is simple to invest in properties which have green energy power plants.Note Clean Tech Investing has yielded terrible results for public investors in the last couple of years.The failure of Copenhagen,Cancun Climate Meets and the Lehman crisis has led to a bloodbath for Green Investors.Don't know how successful this strategy will be for I don't know how much alpha a Clean Tech REIT can generate over a normal REIT.However the performance of DLR has been quite awesome over the last few years.
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 4, 2011
The MarketWatch news column quotes a Citigroup analysis note that says that the Korean Stock Index Kospi level of 1960 incorporates an oil barrel prices of more than $115 .This is quite absurd since the stock market valuation at any point of time is a hugely complex function of a variety of structural,sentimental,cyclical factors.I have no doubt that the writers of the piece have done extensive analysis but the conclusion is so patently foolish that it earns the "Stupid Financial Analysis of the Day" award.
March 3, 2011
There are only 2 Solar Energy ETFs in the Market right now - TAN and KWT.Note buying solar ETF provides a less risky way of investing in solar energy as some stocks can dramatically underperform in this fast growing industry.However Solar ETFs will on the other hand perform much worse than the best performing stocks in the solar universe.This is because their holdings are also concentrated on some of the lesser quality companies.KWT and TAN are better investments for the less informed and less sophisticated investors.Amongst the 2 ETFs,KWT is the better option than TAN for a number of reasons which are described below.
March 2, 2011
India's Electricity is set to see a huge boom as the 8-9% economic growth rates require massive amounts of energy.India is planning to nearly treble its electricity capacity to almost 450 GW by 2020 from around 160 GW now which means a yearly addition of nearly 23 GW in the next decade.Currently India’s Electricity comes mostly from Coal and Hydro Based Energy.Almost 50% of Energy Requirements and 53% of the Electricity is generated from Coal.Despite Coal being the the Dirtiest Form of Energy,India has got little choice in the matter.Most of India’s upcoming Electricity Plants are based on Coal.Hydro Energy is generated mostly from India’s Northern Himalayan States.Renewable Energy forms only 7.7% of the Capacity with around 11 GW of the 16 GW from Wind Energy.Nuclear Energy is around 3% of the total capacity at around 4.5 GW.Here are the list of the major power utilities in the country which is currently dominated by the state run PSUs.However the next decade should see the rise of private electricity companies.
February 28, 2011
Indian Stock Markets are full of stock market manipulators and operators trying perennially to loot the small investor with the regulator SEBI mostly turning a blind eye.Pump and Dump IPO issues,circular stock rigging in small caps,corporate governance issues in even large companies are quite endemic.Investing in the Indian markets is a very hazardous activity for the small investor.Its not only the Indian companies but also large reputed MNCs who also keep pulling fast ones on the minority shareholders.The Cairn-Vedanta deal is a recent example where the promoters are rewarded at a higher premium in takeovers through legal shenanigans by large corporate groups.