Utility
March 13, 2011
Wind Power has come under attack in the USA focused around the Cape Wind Project off the eastern shore.The project which was conceived over 10 years ago has not managed to still build the Wind Farm due to countless number of lawsuits filed for myriad reasons most of which are quite groundless.However some of the reasons have some solid facts behind the opposition to Wind Energy.Note Wind Energy unlike other forms of fossil fuel energy should have much less opposition however it is not so.Unlike Coal,Gas and Oil Energy it does not lead to increase in Greenhouse Gas Emissions and contribute to pollution.It does not lead to deaths of hundreds of miners each year nor has the danger of a catastrophic nuclear meltdown leading to death and disability of thousands.It also does not have the drawback of massive ocean pollution leading to an ecological disaster.However there are still protests against building of Wind Power Capacity and this article examines them in details.At the outset let me mention that advantages of Wind Power far outweighs the Disadvantages.
March 10, 2011
CPV companies have recently started winning some utility scale power plant projects in recent times with Amonix wining a deal to supply 30 MW for a project being built for Xcel Energy.Now speciality wafer French company Soitec subsidiary Concentrix has won a massive 150 MW solar plant order from Tenaska Solar Ventures to produce 150 MW which will be supplied to Californian utility San Diego Gas & Electric under a PPA signed earlier.Note California has a RPS to generate 33% of its electricity from Renewable Energy Sources.Soitec will also build a new factory in the San Diego region to manufacture its proprietary CPV modules with 200 MW capacity.Note this will be the largest CPV plant in the world when built by 2015 much bigger than any CPV plant on the drawing board right now.This also pushes Soitec ahead of the other US CPV companies like Amonix,Solfocus
March 10, 2011
Interest in India's Renewable Sector is growing by the day with massive potential in Wind,Solar,Biomass and Nuclear Energy.Renewable Energy in India is going to more than quadruple in capacity over the next decade providing amply growth and profit opportunities.Foreign and domestic makers are already making a beeline to the Indian market to get a first mover advantage.Here are some of the main news in the Green Industry Space in India
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 8, 2011
The US is the world's largest electricity producer and consumer with a total electricity capacity of around 1 Terawatt.The share of Solar Energy in the US Electricity Production is negligible compared to around 19% for Nuclear Energy and around 2-3% for Wind Energy.However Solar Energy in the US is set to grow at high double digits over the next 2 decades as the Costs of Solar Energy Decline with prices of other Energy Forms set to rise.In some states like Hawaii and California,solar energy prices are already at grid parity with retail electricity prices.Some states like New Jersey,Colorado,Arizona have seen sharp increases in solar energy adoption over the last 2-3 years boosted by state specific government policies and subsidies.With the US Federal 30% Cash Grant on System Costs and falling systems prices for solar systems,the growth in inevitable.The US Solar Market has seen the rise of a number of innovative and fast growing system integration and installers.Some companies have come up with innovative financial solutions to solve the high initial investment hurdles in solar systems through leasing and financing plans.Here are a list of Top US Installers/System Integrators.Note the list will keep expanding in the coming years as the size of the US Solar Energy Market Grows.
March 7, 2011
CLP India which is a subsidiary of Hong Kong-listed Power Company CLP is one of the largest private power generation companies in India The company is the biggest wind farm operator in India with around 450 MW of capacity which it plans to raise by another 50% to around 640 MW.Two New Wind Farms will be built in Jaisalmer in Rajasthan and Andhra Pradhesh.The company will use i WTG supplier Enercon with whom it has long relationship.Note India has seen a sharp jump in Wind Energy growth in 2010 due to state and federal subsidies.With Wind Power forming almost 70% of India's current Renewable Energy Capacity,around 1.5-2 GW of new Wind Capacity will be built each year.CLP plans to add around 200-300 MW every year to keep up its pole position.
March 5, 2011
Solar Farms or Giant Solar Power Projects consisting of thousand of solar panels installed on acres of land are increasing rapidly in the USA.While the European governments are discouraging the use of large installations of solar panels,the US is going the opposite way in installing these power plants.The US government recently approved of a number of Solar Thermal Power Projects worth several gigawatt recently.
March 5, 2011
Indian Privately Owned Power Utilities are furiously expanding their capacities as India looks to treble its Power Generation Capacity in the next decade.The major power companies like Adani Power and Reliance Power are giving Tata Power a tough fight for the position of the biggest private Indian Utility.While these companies cannot hope to overtake state owned giant NTPC in this decade,they may do so in the next one.Note some of these companies are expected to grow almost 20 times in the next 10 years.Here are the main contenders
Note most of the power plants being built in India are coal ones with the power providers aggressively buying up coal mines in Indonesia,Australia and South Africa to increase fuel security.However in case of any global disruptions,India remains very vulnerable.However India's policymakers are sleeping on this issue.It makes more sense to concentrate on those sources whose fuel security is high such as solar and wind power.Coal also faces the prospect of high carbon taxation as global warming becomes acute.Environmental issues related to power plants has already resulted in some being halted as local citizens agitate against the thermal plant's negative effects on livelihoods and health.
March 4, 2011
The Indian Government’s launch of the ambitious Jawaharlal Nehru National Solar Mission(JNNSM) was done with much fanfare with a target of reaching 20 GW of Solar Capacity by 2022 under 3 phases from the 81 MW currently.While the government had the best intentions and had laid down a well defined 10 year plan with subsidy support for both Solar Thermal and Solar PV Technology,it has already run into problems.Due to high interest the government went in for bidding of projects which led to irrationally low bidding from unknown firms.This has put the entire exercise in question with the the biggest private utility saying JNNSM is a failure.Without extensions of deadlines it looks highly unlikely whether the 37 winners will actually put up the plants.
March 3, 2011
German Development Bank Kfw which is owned by the German government is planning to invest 800 million Euros in Indian Renewable Energy Sector.Note Kfw is one of the biggest funding institutions in Germany for renewable energy projects giving concessional interest rates.The Bank will use its extensive expertise in the alternative energy and energy efficiency areas to extend its business in India as well.Renewable Energy in India is expected to see a massive expansion in the next decade and will require massive amounts of debt and equity.Kfw alongwith other developmental institutions like ADB and World Bank have a big role to play.Note Debt is quite expensive in India and these institutions provide loans at a much cheaper rate making renewable energy projects viable.ADB has already formed a JV with NTPC and is looking to rescue JNNSM as well.IFC is funding numerous clean projects in India following its developmental mandate as well.
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 18, 2011
Solar Energy is the fastest growing renewable energy source in the world and has shown tremendous growth in the last 2-3 years.This has been driven by a more than 50% decline in Solar PV costs which continues to decline further.With further increase in energy prices,Solar Power is becoming closer and closer to retail electricity price.Not only is the price declining,solar power is clean energy a most valuable feature in these days of accelerating climate change.Solar Energy has already reached grid parity in places like Italy and Hawaii and will do so in more places in the coming 2-3 years.The industry is a dynamic one and the list of top solar companies can change quickly.Rapid Technology Change and Fast Declining Costs have pushed out most of the Top 10 companies of 5 years ago and brought in new ones mainly Chinese.Here is a list of the Top Solar Panel Producers in the World.
February 17, 2011
Geothermal Energy in India is non existent with not a single functioning plant as of 2011.However potential for this renewable energy exists in a number of sites in India with a potential of around 10 GW.With the Indian government planning to come out with a draft policy to develop geothermal energy by March 2011,major companies are gearing up to exploit this alternative energy resource.Note India has massive energy needs and with a 15% energy requirement from clean sources by 2020,it will need to develop all renewable sources.Note India already has a well developed Wind Energy Industry and has one of the fasted growing Solar Power Industry in the world with a massive future growth potential.Geothermal Energy is regarded as a poor cousin to its more glamorous cousins Wind and Solar.However Geothermal Energy possesses one attribute that the others do not.Its 24 hour generation capability is a massive plus compared to the intermittent nature of Wind and Solar Energy.However long project development time and massive capital investments have deterred fast growth in geothermal energy in the world.However some countries like Iceland,Indonesia,Philippines and USA have a strong geothermal energy industry.
February 7, 2011
The Chinese Penetrate the US Solar Utility Market – exclusive playground of First Solar and Sunpower
The US Solar Utility Market has been the preserve of the 2 largest US Solar Module Players Sunpower and First Solar.While other Solar Panel Makers have won small deals,these 2 companies have dominated the US Utility Market so far.Sunpower has been very successful in the commercial,municipal and utility segments winning a huge number of deals even as its residential dominance evaporated.The bigger Chinese solar producers like Trina,Yingli,Suntech had already taken over the residential market in California with their much cheaper prices.Now even the larger utility market is under threat from the low cost companies from Asia.Note upstream producers like LDK and GCL Poly are also targeting the system development market in US through acquisitions and alliances.The 250 MW Sempra Generation solar plant being built in Arizona will source Suntech modules and will be completed by 2013.This is a huge order win by Suntech which is the largest module producer in 2010 and could see other Chinese producers using this as a template to push out Sunpower and First Solar.
January 12, 2011
Sunpower has been the dog of the solar market in 2010 as competitive pressures from low cost Chinese companies have made investors question the long term sustainability of the company.But Sunpower has managed to survive with some smart deals like the manufacturing JV with AUO and focusing on the solar project development.Sunpower makes the world's most efficient solar crystalline panels but comes at a much higher cost.This has led to erosion of its marketshare as cutthroat Asian companies have ruthlessly cuts prices and costs of solar panels.Sunpower has lost its dominant position in the US residential market with major Chinese companies like Trina,Suntech,Yingli and Canadian Solar winning large chunks.However Sunpower management has been a trier all along with its management constantly looking for ways to survive and proper .It has also started using less efficient solar panels for its projects as part of its strategy to compete.
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.
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 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 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 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 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.
October 21, 2010
The HPUC has given a FIT rate which is quite low for solar energy and has failed to implement a policy for installations between 500-5000 KW.Also the FIT rates for Concentrating Solar Power (CSP) does not make sense at all for under 500 KW installations.Don't think there exists a single decent producer of such small CSP plants.The FIT Policy was passed despite stiff opposition from the island's utilities who questioned the Feed in Tariff as a good Green Incentive.The huge success enjoyed in Europe by FIT did not make a big impression.Note 80% of the world's solar installations depend on Feed in Tariffs.While there have been bad implementation cases of FIT in Spain and Czech,there have been huge successes in other countries like Germany and UK.HPUC rightly decided to go ahead as trial and errors would be needed . It won't lead to a huge boom in solar in Hawai due to poor returns however it should lead to some boost to existing solar producers or those who were going to install solar anyway.
October 11, 2010
Constellation Energy has become the latest USA Utility to cancel its proposed new nuclear energy plant to be built in Maryland.Despite a Loan Guarantee from Department of Energy (DOE) as part of the US Green Stimulus,Constellation has found the economics of the Nuclear Reactors as unworkable.In fact this is keeping with the trend of other utilities in the Developed World who have found New Nuclear to be too expensive.While a number of cyclical factors are at play (Wind Energy has also been affected) in hindering the development of these plants,it seems a secular shift has occured.Finland has become the poster boy of a Nuclear Project Disaster with the main developer Areva bleeding from losses as time and cost overruns have almost doubled.The increaseing costs of environment and safety regulations has increase manifold since the last spurt of nuclear energy construction in the 1980s.The Nuclear Renaissance has proven to be a complete failure in the Western Countries.While China continues with its aggressive Nuclear Expansion plans,construction in the US has come to a virtual halt.Exelon which is the largest Nuclear Energy Operator in the USA has also halted developed of 2 new reactors in Texas.These Utilities have said that they need much higher energy prices and a carbon tax before going ahead with reaction construction.Note Exelon recently bought a Wind Energy Operator as Solar/Wind become the favored Green Energy choices.
September 24, 2010
Offshore Wind Energy is starting to receive a huge amount of investment and attention both in Europe and Asia.Onshore wind installations facing the problems of visual impact,saturation of good windy geological locations and problems of low frequency noise.However Offshore Wind Farms face no such problems since they are located in high wind locations offshore far away from the general population.The largest Wind Farm got installed in the UK with Swedish Utility Vattenfal starting a 300 MW + Farm off the cost of Thanet.UK is at the vanguard of the Offshore Wind Energy Revolution with the largest amount of installations at 1340 MW.The Government has given out a number of approvals to another 30-40 GW of Wind Farms to a number of private players.This will not only substantially raise the Renewable Energy generated from UK but will also result in a huge number of Green Jobs and Investment.Already a number of Oil and Gas offshore companies are converting themselves to Green Ones to take advantage of the Offshore Wind Boom.The Wind Farms are being developed by big utilities like Dong,E.ON,EDP and RWE.
September 17, 2010
BYD has fallen almost 35% this year heavily underperforming the market as sales growth has slowed substantially.After a 140% growth in Auto Sales last year,this year the sales growth will go down to 30% as the company has reduced sales target to 600,000 from 800,000 earlier.Chinese auto sales have fallen and BYD has been specially affected with its workhorse F3 Model declining in popularity.The company delivered a good first half with $100 million in 2Q profits.However the company is still quite expensive at $15 Billion Market Cap which would give it a P/E of around 38x.Also the company's strategy to enter solar energy does not make sense.However BYD is a good story for the future.China has made a new Green Policy to create National Champions in the EV and Battery Industry.BYD is a perfect candidate with its strengths in both areas.While its execution in the EV sector is yet to give results,it is already planning into the future getting into the Grid Storage Sectors.I would not put money presently but would wait for a better entry point in the future.
September 13, 2010
China,India and South Korea have been leading the charge buying up Oil and Gas Assets at an incredible clip around the world.TEPCO plans to buy upto 50% of its Uranium needs from internal purchases as well raising LNG purchases.Japan lost out to South Korea in Economic Diplomacy when it lost out on Lucrative Nuclear Power Plant Contracts in UAE.It is now jostling with USA and China for building Nuclear Power in Vietnam.TEPCO is a leading member of Japanese Consortiums in international bidding