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EVOLUTION SOLAR TO PARTNER IN 5 MW SOLAR PROJECT (USA)

Posted by Gilmour Poincaree on January 23, 2009

1/22/2009 8:56:00 PM GMT

EnergyCurrent

PUBLISHED BY ‘ENERGY CURRENT’

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Posted in BANKING SYSTEM - USA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENERGY INDUSTRIES, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, RECESSION, SOLAR, SOLAR CELLS INDUSTRIES, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

CHINATRUST BREAKS GROUND ON NT$15BN CONSTRUCTION PROJECT

Posted by Gilmour Poincaree on January 16, 2009

Friday, Jan 16, 2009

by Joyce Huang – STAFF REPORTER

PUBLISHED BY ‘THE TAIPEI TIMES’ (Formosa – Taiwan)

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PUBLISHED BY ‘THE TAIPEI TIMES’ (Formosa – Taiwan)

Posted in BANKING SYSTEMS, CEMENT, CHINA, COMMERCE, COMMODITIES MARKET, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, ENVIRONMENT, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, GLOBAL WARMING, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MACROECONOMY, POLLUTION, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, SOLAR, SOLAR CELLS INDUSTRIES, THE FLOW OF INVESTMENTS | Leave a Comment »

KONARKA GETS $45M FRENCH INFUSION (USA)

Posted by Gilmour Poincaree on December 16, 2008

Monday, December 15, 2008 – 9:48 AM EST

Boston Business Journal

PUBLISHED BY ‘THE BOSTON BUSINESS JOURNAL’

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Posted in ECONOMY, ENERGY INDUSTRIES, ENVIRONMENT, SOLAR CELLS INDUSTRIES | Leave a Comment »

ENDING AUSTRALIA’S OIL ADDICTION – AS AUSTRALIAN OIL PRODUCTION SLOWS AND CONSUMPTION GROWS, OUR ECONOMIC, ENERGY AND ENVIRONMENTAL SECURITY DEPENDS ON URGENTLY DEVELOPING FOSSIL FUEL ALTERNATIVES

Posted by Gilmour Poincaree on December 5, 2008

Last Updated – December 04th 2008

by John Mathews

PUBLISHED BY ‘CORPORATE CITIZEN’ (Australia)

Suddenly Australia is having the debate on energy and the curbing of greenhouse gas emissions that we should have been having years ago. But now we are actually talking – in the press, on radio, in boardrooms. And it’s not a faux debate, with nuclear power posing as a ‘green alternative’ – it’s a real debate over renewable sources, energy efficiency and how to effect a transition to a low-carbon economy.

With the debate about to move on to the specifics, the obvious place to start is with transport, because that’s where poor leadership in the past has saddled Australia with a 99.9 per cent dependence on oil.

Corporates in Australia are the prime users of the private transport system, and can take the initiative in weaning the country off its fossil fuel addiction. This is where good corporate citizenship can be tested.

To its great credit, the NRMA has taken up the challenge, and brought together a group of energy and transport experts known as the Jamison Group to draw up a roadmap to take Australia beyond oil dependence in transport. The group has now issued its first report and it deserves close scrutiny.

Today Australia consumes just over 38 billion litres of fuel annually for road and off-road vehicles – of which 19.3 billion litres comes from petrol, 2.3 billion litres from LPG (some of which comes from natural gas, and counts as an alternative), and 17 billion litres from diesel. A tiny amount – just 0.3 billion litres of E10 blend – can be counted as an alternative from biological sources. This, then, is less than 1 per cent of fuel sales (and with the ethanol itself accounting for only a tenth of this, or 0.1 per cent of total road transport fuel sales). This is the situation of total dependence on fossil fuels that successive governments have allowed to come to pass. The time for a fresh start has arrived – a start that is driven by three principal imperatives of economic security, energy security and environmental security.

Economic security means taking seriously the impending costs of remaining wedded to oil as our prime transport fuel at a time when imports of oil along with the price of oil relentlessly rising – a double whammy that makes the present cries of pain over fuel costs a mere whimper to what we can expect. So to enhance our economic security we must make a commitment to reducing our reliance on fossil fuels, and to rebuilding our industrial base, both to produce green and renewable energy and to use such energy sources preferentially – principally as a means of transport. Imported oil should carry a health warning: toxic to local economies!

Energy security means taking seriously the prospect of world oil supplies peaking (they may already be doing so) and thus highlighting the necessity of moving to an economy that is less and less dependent on oil as its driving force. Transport is in the front line here, because it starts with such near-total oil dependence. So moving away from oil dependence to relying increasingly on renewable and other low-carbon energy sources should be the guiding light in fashioning public policy. For transport options, that means supporting a new generation of electric-powered vehicles and new electric public transport systems for our cities, backed up with new industries for growing our own fuels (biomass, biooils, biogas, and first generation biofuels) and for making use of Australian-produced cleaner fuels such as natural gas.

Environmental security means taking the threats to our environment from the burning of fossil fuels seriously – from the planetary effects that are captured by the phrase ‘global warming’, to the local effects that are measured in terms of smog and air pollution in our cities, causing high levels of avoidable respiratory disease, cancer and other serious public health impacts. The immediate and short-term way to reduce such impacts is to insist that fuels sold in Australia meet the highest standards of fuel economy and health standards; while the longer term means of meeting the environmental threat involves again finding ways to rebuild our economy on a low-carbon footing. Geoscience Australia predicts that Australian production of crude oil plus condensate will hold at around 550,000 barrels per day until 2009 and then decline steadily, reaching a mid-range estimate of 224,000 barrels per day by 2025 (that is, a 50 per cent reduction) – as depicted in Figure 1. That means that oil production has already peaked in Australia.

As our domestic production peaks, so our imports of oil rise to keep up with relentlessly rising demand. The level of imports has risen by no less than 30 per cent in just four years – from 33.5 GL to 43.6 GL – a trend that commentators like Geosciences Australia see as continuing and getting worse.

Further, as the level of imports rises, so the balance of trade in petroleum products worsens. From a surplus in 2003 it has deteriorated rapidly, moving to a deficit in 2004 and reaching a huge deficit of nearly $10 billion in the current year.

So what is to be done?

First, we suggest the federal government announce a national goal of reducing oil dependence in Australia by 20 per cent by 2020; by 30 per cent by 2030; and by 50 per cent by 2050. A roadmap to reducing oil dependence should start with realistic goals that would seize public imagination in Australia and provide a benchmark against which all government policies could be measured. These goals would be subject to scrutiny by a panel of experts appointed by the government and required to report by 2009 on the feasibility of the goals and steps that could and should be taken to achieve them.

Secondly, promote and develop alternative fuels. The goal to reduce oil dependence should translate into a commitment to develop alternative fuels in Australia as well as to reduce consumption and improve energy efficiency generally. We need to encourage the development of three major alternatives to oil-based fossil fuels:

– Natural gas (CNG, LNG, LPG derived from natural gas);

– Biofuels (first generation ethanol and biodiesel; second generation lignocellulosic biofuels; bio-oils and biogas); and

– Electric vehicles (hybrids, plug-in hybrids and eventually all-electric vehicles).

These alternatives all provide opportunities to develop new industries in Australia, (subject to the most stringent environmental precautions, certification and development of national standards) that are on par with best international standards. There are vast opportunities for Australian businesses in such an approach.

Natural gas can be sourced from Australian reserves (some of which should be reserved for domestic use) and thus meet concerns over economic and energy security. Although natural gas burns more cleanly than petroleum, it is still a fossil fuel and contributes greenhouse gas emissions. As the national emissions trading scheme starts to bite, we see natural gas becoming the fuel of choice in power stations, thus competing as an end use with natural gas used in transport.

Biofuels are a natural candidate for expansion in Australia, but only in such a way that they are seen to be sustainable and deliver real greenhouse gas emissions improvements. This means expanding biofuels activities in such a way that they do not compete with food production and minimize fossil fuel inputs into the production process. Biofuels production should of course meet stringent environmental standards and be certified as such.

Electric vehicles are a promising automotive alternative, with zero tailpipe emissions, but they would not deliver real greenhouse gas gains at the moment because generation of electricity in Australia remains tied to the burning of coal. To the extent that power production responds to fresh policy initiatives (such as the national ETS) and renewable sources of electric power become available, so the electric car option will become more attractive.

Thirdly, we need compulsory fuel consumption standards. The best way to reduce oil dependence is to reduce the consumption of oil-based fuels in transport, through improvements in consumption standards and/or their equivalent in greenhouse gas emissions standards. This will be the single biggest saving on fuel costs that the government can offer to working families in Australia, no less than to the corporate sector.

Fourth, an alternative fuel market mandate. The best way to promote fuel alternatives is to set mandates for increasing market shares of alternatives. Alternative fuel industries will be built in Australia only to the extent that market mandates that break the grip of the petroleum industry on our fuels market are promulgated. Voluntary targets will not work, and urgent action is needed now to avoid the looming catastrophe of a balance of payments crisis caused by the costs of oil imports. We propose an alternative fuels mandate of 5 per cent by 2010, 10 per cent by 2015 and 20 per cent by 2020.

Such fuel market mandates can be found throughout the world where governments are serious about switching the fuel mix away from dependence on oil – in the EU, in the US, in Japan, and of course in Brazil where the feasibility of a non-oil transport fuel mix was first demonstrated. They should now be found in Australia as well. There are huge opportunities for Australian companies in such an approach.

Fifth, we need tax incentives to stimulate demand for vehicles running on alternative fuels or propulsion systems (for example EVs). The entire tax system, which is at present focused on raising revenue, should be refocused to accomplish a swing in the vehicle fleet towards flex-fuel vehicles running on both petroleum-based and alternative fuels; and towards vehicles that depart radically from oil dependence, particularly electric vehicles and hybrids. Vehicles and fuels that perform better would attract tax benefits, and vehicles that perform at current standards or worse would be penalized. In such an approach, corporates that modernise their vehicle fleets with fuel-efficient and low-emissions engines would attract tax incentives.

Six, we need tax incentives to grow new alternative fuels and to build the infrastructure needed. On the supply side, government can play a significant role in providing tax incentives to firms that are making investments in green energy. In transport terms this means offering incentives to automotive firms to shift to fuel efficient vehicles utilising new fuel efficient technologies (such as clean diesel); incentives to fuel distributors to offer a range of fuel dispensing systems including diesel, biofuels such as E10 and B5, and CNG; incentives to new biofuel producers building biorefineries to produce a range of first and second generation biogas, biooils and biofuels; and incentives to farmers to invest in new crops for producing energy without sacrificing our food production and export of food crops. The seventh suggestion is to identify the subsidies paid to reinforce current oil dependence and then wind them back. There exists a raft of explicit (as well as hidden) subsidies provided to fossil fuel industries in Australia, and one of the easiest ways for government to level the playing field is to dismantle these subsidies, explaining at the same time why it is doing so. The subsidies and incentives include tax benefits for cars provided by employers (but perversely excluding non-polluting forms of transport such as bicycles and public transport); import duty inequities for SUVs; non-recovery of public agency costs (such as the heavy industry support provided for the oil exploration industry); explicit fossil fuel tax concessions; fossil fuel energy R&D (such as massive expenditure in Australia on so-called ‘clean coal’ while winding back support for renewable energy R&D); the diesel fuel rebate scheme; and subsidies for road use and car parking.

Eight, we should use the proposed Emissions Trading System as a means of building alternative fuels industries. The proposed national emissions trading system is going to have to cover as many greenhouse gas emitting industries as possible if it is to function effectively. The fossil fuels industry, (with its mining and refining activities both intense emitters of greenhouse gases), cannot be allowed to be an exception. Already there is skirmishing underway, with claims that the transport sector should not be covered unless some other sector is also covered. These claims must not be allowed to progress. The counterpart to a compulsory emissions permit system is a system for allocating carbon credits to activities not covered by the ETS that reduce carbon emissions, or preferably sequester carbon already present in the atmosphere – as is done by carbon negative biofuels. As a complement to the proposed national ETS, the government could create a national mechanism for recognizing and certifying carbon credits (probably under the AGO) that would act in concert with, but across a broader range of activities, than the UN Clean Development Mechanism. Such certifiable credits could then be traded on carbon markets in Australia – giving a further financial incentive to farmers and producers of biofuels and other alternative fuels businesses (such as conversion kits suppliers) that could make a case to the AGO that they are creating carbon credits.

Finally, we need to drastically improve public transport, alternative modes of sustainable mobility and energy efficiency generally. The entire transport system in Australia has been weighted towards private mobility at the expense of public transport and sustainable mobility options such as cycling. A shift towards alternative fuels as a way of enhancing economic security, energy security and environmental security should be accompanied and complemented by a revitalization of public transport systems (inter-city rail; urban fast metros; light rail systems; mixed mode transport) and a new seriousness in promoting sustainable mobility alternatives such as cycling (cycle lanes and pathways; cycle rental and exchange depots).

(*) – The Jamison Group was established by the NRMA following the company’s Alternative Fuel Summit in 2006 and comprises four eminent scholars in the fields of energy and transport – David Lamb, Mark Diesendorf, John Mathews and Graeme Pearman

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Posted in AEOLIC, AGRICULTURE, AUSTRALIA, BANKING SYSTEMS, BIODIESEL, BIOFUELS, BIOMASS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, ENVIRONMENT, ETHANOL, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, HYDROGEN - FUEL CELLS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, MACROECONOMY, NATURAL GAS, RECESSION, SOLAR, SOLAR CELLS INDUSTRIES, THE FLOW OF INVESTMENTS, THE WORK MARKET | Leave a Comment »

SUPER SUSTAINABILITY – CAN YOUR SUPER FUND SAVE THE WORLD?

Posted by Gilmour Poincaree on December 5, 2008

Last Updated – December 04th 2008

by John Kavanagh

PUBLISHED BY ‘CORPORATE CITIZEN’ (Australia)

Blair Comley wants people in the investment community to change the way they think about the Australian Government’s climate change policy. With over $1 trillion sitting in Australian superannuation funds, the scope for changing the investment landscape is huge. Even a subtle shift in investment decisions by the managers of this capital could go a long way to unlocking some of this money and, in turn, help to achieve those policy goals.

BLAIR Comley, deputy secretary of the Department of Climate Change, believes companies and investors have become obsessed with the detail and have lost the big picture. They worry about how much a tonne of carbon emissions will cost in the new emissions trading scheme. They worry about how quickly the limits on carbon emissions will be adjusted. They worry about whether they will qualify for compensation and how much they will be entitled to receive. And investors in particular will worry about how many percentage points to knock off their earnings forecasts for polluters.

Comley finds this thinking understandable but narrow. After all, he says, achieving a low carbon economy is a major reform, a structural transformation of the economy. One estimate of the amount of investment required to build clean power generation facilities in Australia to meet the Government’s goals over the coming decade is upwards of $40 billion. The opportunities for investment in infrastructure are enormous.

The other thing that surprises Comley is how impatient business is over the issue, especially the investment community. Speaking at a climate change conference in Sydney in October, he reminded his audience of mostly financial services industry professionals that economic reform is usually a graduated process. Using the example of tariff reform, a major micro-economic policy launched by the Hawke Government in the 1980s, he said it was part of the socio-economic compact to spread the burden of reform by bringing in change over a number of years.

And it is not just a matter of spreading cost in an equitable way. The government knows it risks causing serious damage to the Australian economy if it gets things wrong. One risk factor is leakage – companies moving their polluting activities to economies where the rules are less stringent to avoid having a price and a cap put on their carbon emissions.

The issue of climate change has taken on a great deal of importance for investment managers following the release in July of the Government green paper on the Carbon Pollution Reduction Scheme, and the Garnaut recommendations on emissions reductions. Both papers contain proposals that will have an impact on earnings, costs and investment programs for a wide range of Australian businesses over the coming decade, and both papers put forward a number of options.

The Carbon Pollution Reduction Scheme, also known as an emissions trading scheme, will set a price on a tonne of carbon emissions and determine which companies are included in the scheme and how they are to report their emissions. It will set up a compensation scheme and it will exempt certain industries (see breakout).

The Garnaut paper sets out the blueprint for emissions reduction and, in the process, points to the type of investment that will need to be made in renewable energy, transport, water systems and more.

The Government will publish a white paper in December and most analysts are waiting until then before they start drawing conclusions about how the investment markets will be affected by all of this.

Comley is right in thinking that the investment community is obsessed with detail and short-term issues. Respondents to a survey of fund managers conducted for Corporate Citizen by the Australian Centre for Corporate Social Responsibility (ACCSR) found that they were near-unanimous in saying they were not prepared to make investment decisions around climate change issues until they had a clear picture of the rules and the regulatory framework for the Government’s proposed carbon pollution reduction scheme.

It is those investment managers, analysts and asset consultants not ready to invest in climate change who are guiding the asset allocation decisions of the country’s biggest investors – the superannuation funds. Typical of the response is this comment from Elaine Prior, a senior analyst at Citi Investment Research: “Very clearly, we need a regulatory environment that allows change solutions to become economically viable. At the moment we have a lot of talk about climate change solutions and carbon emissions and so on but we don’t have a regulatory authority. And given that a lot of the things that will cut emissions will cost a lot of money, there needs to be that regulation to act as a catalyst for investment.”

Some specialist managers, however, report that they are finding investment opportunities. The managing director of Australian Ethical Investments, Anne O’Donnell, says an area where strong investor demand is emerging is for green commercial buildings. Community awareness of where energy savings can be made in buildings is relatively high and, as a result, tenants want to move into them and institutions want them in their portfolios.

Helga Birgden, head of responsible investment for the Asia Pacific at Mercer, says superannuation fund trustees with experience in investing in the agribusiness sector are starting to ask about how the issue of carbon sequestration fits into investment in the sector.

Managers in the small, specialist funds groups say the attention of large funds management groups has been caught by the imminent introduction of a system that will put a price on carbon emissions and have a direct impact on the earnings of many of the big companies in which they invest. But, like Comley, they see this as a very narrow focus. They need to look at renewables such as wind, which has demonstrated its viability already, consumer products that will assist households reduce their energy consumption, carbon capture technology, and suppliers to the public transport sector.

But the investment management industry is dominated by large financial institutions and they are fundamentally conservative organisations. Many of them have adopted standards such as UNPRI, the United Nations Principles for Responsible Investing, or ESG (environmental, social and governance) but they tend to use these metrics as overlays for making adjustments to their mainstream equity and fixed interest portfolios. In other words, they might reduce their portfolio weighting to steelmaker Bluescope if it shows up as a bigger polluter than OneSteel. What they are not doing is investing in clean energy start-ups or other businesses with a direct stake in climate change.

What many of the managers argue is that their mandate is to invest conservatively on behalf of people who are committing funds to their retirement savings. It is not their job to take risks on new ventures. And they also argue that the biggest impact of climate change policy will come from changes that big companies make to their business practices.

Survey respondent John Guadagnuolo, an investment manager at Portfolio Partners, says: “For instance, you might decide to invest in a company that participates in a process to capture carbon from coal-fired power stations. You are taking on significant risk because you are betting the carbon price will be high enough to pay off that investment. As a fund manager we might like low emissions or sustainability to be present in a company that we invest in but it’s not a deciding factor. If there’s too much risk it’s not something we can get into.”

Unspoken in all of this is the fear that investment managers have of being caught up in the next bubble, and the reputational damage that would follow. In 2000 the fund manager BT launched a fund called the BT TIME Fund. It was set up to invest in technology and new media and, coming on the crest of the dotcom wave, it was one of the most successful retail investment product launches ever. The wave crashed soon after and the BT fund has been a chronic underachiever ever since. It has reported an average annual loss of 14.5 per cent a year since its launch. No investment manager wants to be associated with such disasters and, in the case of clean technology, managers fear there are too many unknowns. Some investment managers say there has already been something of a bubble around biofuels and that the sector represents more hype than substance.

Some commentators argue that one reason there are too many unknowns is that the investment management industry has been slow to equip itself with the expertise that would allow it to make informed investment decisions in the sector. In October this year, the Financial Services Institute of Australia (Finsia) released the findings of a study it had undertaken with Griffith University Business School, looking into the preparedness of the financial services industry to respond to climate change and its capacity to do so. Like the ACCSR, it found that regulatory uncertainty was the biggest road block for investors, along with a perception that investment in emerging climate change technologies involved excessive risk and low returns.

But it also found that there was a lack of expertise, skills and knowledge about climate change throughout the industry. Finsia chief executive Martin Fahy says most investment managers were prepared to admit their engagement with the issue was inadequate and that there was a lack of leadership within their organisations pushing for change.

Some investment managers are prepared to concede this. Colonial First State head of sustainability and responsible investment, Amanda McClusky, says: “There’s a gap around education. The traditional training for an analyst is a finance degree and most of the education that analysts get does not include sustainability issues and, more broadly, social issues, reputation tracking, human capital and some corporate governance factors.”

The consensus among investment managers in the ACCSR survey was that in five or 10 years time climate change and sustainability will be mainstream investment issues. It took about 10 years for corporate governance to move from the fringe, where a handful of investment managers paid attention to issues of board independence, fair remuneration policies and transparency, to a situation today where investment managers are asked to justify why they don’t vote on director elections and remuneration proposals.

In the meantime, the field will have to be developed by a handful of specialists. One such specialist is Sean Wiles, an investment manager at CVC Sustainable Investments, a venture capital fund that aims to increase Australian private investment in renewable energy and enabling technologies through the provision of equity finance. (Funding is provided under the Australian Greenhouse Office’s Renewable Energy Equity Fund licence as well as from private sources.) Wiles reports that his fund has been investing in emerging Queensland gas producers such as Blue Energy. While gas is not exactly clean, it produces about 40 per cent of the carbon emissions of coal and receives favourable ESG scores from fund managers for that reason.

Wiles says he has trouble getting good research from brokers and investment bankers but has, nevertheless, been able to put together a portfolio of stocks in areas such as renewable energy, waste management and water. It all sounds great until you see the numbers: CVC has a mere $400 million invested across four funds.

In the end, it seems that a mix of strong, sound government policy as well as strong impetus from super clients is what is needed to shift money into climate-aware investment strategies. As Guadagnuolo says, “At the end of the day we’re a fund manager, not a venture capital firm. That makes a difference to how we see things. It’s not our job to develop new technologies, it’s our role to invest our clients’ money as we see prudent. As a venture capital firm you have much higher approval from your investors to take on risk.”

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PUBLISHED BY ‘CORPORATE CITIZEN’ (Australia)

Posted in AEOLIC, AGRICULTURE, AUSTRALIA, BANKING SYSTEMS, BIOFUELS, BIOMASS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENVIRONMENT, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HEALTH SAFETY, HYDROGEN - FUEL CELLS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MACROECONOMY, NATURAL GAS, RECESSION, RECYCLING INDUSTRIES, REFINERIES - PETROL/BIOFUELS, REGULATIONS AND BUSINESS TRANSPARENCY, SOLAR, SOLAR CELLS INDUSTRIES, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE WORK MARKET, WATER | 1 Comment »

CRISIS HITS CHINESE MAKER OF SOLAR CELLS

Posted by Gilmour Poincaree on November 14, 2008

Bloomberg News, ReutersPublished: November 13, 2008

NEW YORK: A Chinese solar cell maker, JA Solar Holdings, said the global economic slump had Solar powered homes in Ota, northwest of Tokyo. JA Solar, a Chinese solar cell producer, said 'panic' in the market had prompted the company to cut sales forecasts. (Yuriko Nakao - Reuters)brought “panic” in the solar market, prompting it to cut its sales forecasts and sending its shares down nearly 30 percent, to a record low.

JA Solar’s American depositary receipts dropped 96 cents, or 29 percent, to $2.38 in trading Wednesday on the Nasdaq composite index. They have fallen 90 percent this year to the lowest level since a share sale at $5 in 2007.

Sales of solar cells and panels have risen sharply in recent quarters as companies like JA Solar have increased production. But the global economic slowdown has since caused that growth to slow, leading to a supply glut.

“At this moment the market reaction has been panic,” Samuel Yang, chief executive of JA Solar, said in a conference call Wednesday.

The company, which posted a quarterly loss from its ties to the defunct investment bank Lehman Brothers, said it had cut back on the output of solar cells and would seek to renegotiate its polysilicon supply contracts.

That effort to cut costs for polysilicon, the key material in its cells, was an attempt to offset an expected 20 percent price decline in the average selling prices of its products.

“Just recently the euro depreciated dramatically, more than 23 percent. So we have to adjust our ASP to support our customers,” Yang said, referring to average selling price. Europe is the largest market for photovoltaic solar equipment because of the subsidy programs set up by the German and Spanish governments.

“We do not believe in the ‘disaster scenario’ implied by the stock’s sharp drop during today’s session,” Pavel Molchanov, an analyst at Raymond James, said in a client note, noting that the stock was trading nearly 40 percent below its book value. “JA Solar’s low cost structure and healthy balance sheet place it in a strong competitive position.”

JA Solar said that it would seek a 20 percent discount in the price it pays its suppliers for polysilicon in 2009, and that it had already won price concessions for 2008. The company will seek to push its contracted costs for silicon below the spot market price of $200 to $220 per kilogram, or $90 to $100 per pound.

The company cut its 2008 revenue forecast to between $849.5 million and $878.9 million from the $1.05 billion to $1.17 billion it had forecast in October, and said its earnings per share would be near break-even.

It also cut its 2009 revenue forecast to $1.5 billion to $1.7 billion from the previously issued $2.0 billion to $2.2 billion.

Fourth-quarter growth margins will drop to 5 to 7 percent, the company said, from 21.6 percent in the third quarter and 23.3 percent in the second quarter.

JA Solar said it lost a net $21.0 million in the third quarter. In the same quarter a year ago it earned $24.4 million.

It posted a one-time loss of $100 million in investments it made with Lehman, a $7.3 million loss from the derivatives deals with the bank and a 1.1 million share dilution based on shares lent to the collapsed investment bank.

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Posted in CHINA, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, SOLAR CELLS INDUSTRIES, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

CREDIT CRUNCH SNARES CLEAN-TECH INVESTORS

Posted by Gilmour Poincaree on November 12, 2008

Last updated November 11, 2008 5:21 p.m. PT

The Economist

Earlier this year, with the oil price at record heights, T. Boone Pickens, a celebrated Texas oilman, seemed to confirm the unstoppable growth of the clean-technology industry when he announced plans not only to build the world’s biggest wind farm, but also to spend $58 million of his personal fortune promoting the cause of wind power.

On Oct. 30, with oil prices having fallen by more than half, he told a television reporter that the boom he had foreseen in wind would be “put off,” due to the unexpected fall in the price of fossil fuels and the sudden difficulty of borrowing money.

Pickens is not the only clean-tech investor caught out by the credit crunch. New Energy Finance, a research firm, calculates that the amount of project finance devoted to clean-energy projects around the world fell by almost 25 percent in the third quarter, to $18 billion.

The firm expects it to fall further before the end of the year. It also expects firms to raise less money on stock markets, due to the financial turmoil. NEX, an index that tracks clean-tech stocks globally, has tumbled even faster than the market as a whole.

Big American utilities are slashing their investments in alternative energy. Florida Power & Light has cut its planned investment in wind power next year by 400 megawatts. Duke Energy of North Carolina has lopped $50 million off its budget for solar power.

And on Oct. 31 VeraSun Energy, one of America’s biggest ethanol producers, caught out by gyrations in the prices of corn and gasoline, filed for Chapter 11 bankruptcy protection.

In the European Union the price of carbon permits has fallen from a high of almost 30 euros in July to around 20 euros, making clean-tech investments less attractive.

But Michael Liebreich, the boss of New Energy Finance, expects total investments in clean energy to fall only slightly in 2008, thanks to a strong performance in the first part of the year.

Venture-capital and private-equity investments actually rose slightly in the third quarter. The price of oil aside, he says, the issues that stoked interest in clean tech, including global warming and energy security, are as prominent as ever.

A few customers for wind turbines, says Steve Bolze of GE Energy, are delaying their orders, but the firm has no doubts about the industry’s long-term prospects.

The world still needs energy, argues Steve Sawyer, the head of the Global Wind Energy Council, an industry group, and even if banks are slower to lend, utilities can often afford to pay for new generation out of their own revenues. Investing in dirtier sources of power carries risks of its own, he adds, as illustrated by the recent seesawing in the price of fossil fuels.

Moreover, a new rationale for promoting green investments is beginning to emerge. Many luminaries, from the head of the United Nations Environment Program to Barack Obama, America’s president-elect, tout the industry as a means both to address global warming and stimulate flagging Western economies.

Reports enumerating the economic benefits of state support for clean technology, in the form of industries fostered and jobs created, abound (although few of them examine the potential costs of such schemes, in the form of increased government debt and misallocated capital).

American lawmakers, at any rate, seem convinced: they slipped an extension of all-important subsidies for renewable energy into the recent bailout for financial services.

Clean-tech firms with strong business models can still raise money. EDF Energies Nouvelles, the renewable-energy firm controlled by Europe’s biggest utility, recently raised $734 million from a secondary share issue.

GridPoint, an American start-up that sells technology to improve the efficiency of electrical grids, raised $120 million in venture capital in September; Silver Spring Networks, another smart-grid firm, raised $75 million last month.

In general, firms selling technology that will earn a quick return, in fields such as energy efficiency, are proving most resilient. Capital-intensive businesses such as ethanol distilleries are struggling — especially Brazilian ones whose debts are in dollars while their revenues come in depreciating reais.

Makers of wind turbines and solar panels still have long waiting lists for their wares, so a slowdown is not as alarming as it sounds, Liebreich points out. Smaller manufacturers with weaker balance sheets will be snapped up by bigger, more efficient firms, he predicts, and shortages that have crimped the industry’s growth will ease.

The price of silicon, the chief component of photovoltaic cells, is already falling. Cheaper steel and copper should help reduce the cost of making wind turbines. A shortage of capital may become a new bottleneck, he says, but it will not kill off the industry any more than the previous ones did.

From The Economist magazine. Copyright 2008 Economist Newspaper Ltd.

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PUBLISHED BY ‘SEATTLE POST-INTELLIGENCER’ (USA)

Posted in BIODIESEL, BIOFUELS, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENVIRONMENT, ETHANOL, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HYDROGEN - FUEL CELLS, INDUSTRIES, INTERNATIONAL, NATURAL GAS, SOLAR CELLS INDUSTRIES, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

FIRST SOLAR TO INVEST $25 MILLION IN SOLARCITY, ENTERS RESIDENTIAL MARKET (USA)

Posted by Gilmour Poincaree on November 3, 2008

Wednesday, October 29, 2008

Phoenix Business Journal – by Patrick O’Grady

First Solar Inc. is going residential with its products, investing $25 million in installer SolarCity Corp. and signing a deal to supply the company with more than 100 megawatts of panel generation capacity.

The deal, announced Wednesday, will have Tempe-based First Solar (Nasdaq:FSLR) supply SolarCity with the panels over a five-year span. The financial investment will allow SolarCity to continue expansion plans that brought the Foster City, Calif.-based company to Arizona this summer.

“We’ve been very successful with our expansion in Arizona, and we want to expand that to other states,” SolarCity CEO Lyndon Rive said.

First Solar primarily has been providing its thin-film technology to commercial and utility operations. The marketplace, however, is changing with the expansion of a federal tax credit that gives the same 30 percent break to residents that it does to businesses.

“The combination of First Solar’s modules with SolarCity’s innovative approach to designing, financing and maintaining complete solar solutions enables homeowners and small-business owners to lower their electricity costs while reducing air pollution and the effects of global warming,” said Mike Ahearn, First Solar’s chief executive officer, in a statement.

SolarCity’s business model allows businesses and residents to take advantage of the tax credit through a 15-year lease option. The deal allows users to save smaller amounts than if they were to purchase the panels outright.

The supply agreement would allow SolarCity to equip more about 25,000 homes with its average of a 4- to 5-kilovolt systems, typically enough to supply most of the power a home would need annually.

There only are about 50,000 homes with solar power generation in the U.S., Rive said.

The panels will not all end up on homes as SolarCity provides them to businesses as well.

Rive said he believes the market will be expanded with the recent tax credit passage, although it is still expensive for homeowners to buy a system outright. “Most consumers can still not afford the $20,000 to $30,000 it costs up front,” he said.

SolarCity expects to announce at least some of its expansion plans early next year, Rive said.

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PUBLISHED BY ‘THE PHOENIX BUSINESS JOURNAL’ (USA)

Posted in ECONOMY, ENERGY, ENVIRONMENT, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, SOLAR CELLS INDUSTRIES, THE FLOW OF INVESTMENTS, USA | Leave a Comment »