Investing in Coal a Great Idea (Think China,India) – US Coal Stocks,Market Vectors Coal ETF(KOL) Analysis

6 Jul, 2011 by
Coal

Coal is the biggest source of Energy for Electricity Production in the world and its use is expected to continue to grow to 44% of the Electricity Production by 2030 (IEA).Despite Coal having many dangerous disadvantages,its Advantages of cheapness and abundance have made it the Fossil Fuel of choice.With global reserves estimated to be around 200 years,it does not have the “peak oil” characteristics as well.Though not a Coal Fan,nonetheless Coal stocks are a great investment choice due to the fact of its growing demand which is outstripping supply.China and India are massively growing their electricity,steel and cement production which  requires billions of tons of coal.China consumers almost 45% of the global coal production while Indian demand is growing by leaps and demands as well.Indian Power Utilities are grabbing up Coal Mines in Africa,Australia and Asia to secure feedstock for their gigawatt thermal power plants.Despite its growing importance Coal does not have a lot of choice in terms of investment unlike Fossil Fuels like Oil and Gas.Here is a list of Coal Stocks which one can invest in  and the sole Coal ETF – Market Vectors Coal ETF (KOL).

List of Coal Stocks

US Coal Stocks

Peabody Energy Corporation (BTU) – Market Cap of $18.5 Billon.Peabody Energy Corporation is the largest Coal Company in the United States with operations both in USA and  other countries.The Company has equity interests in a wide variety of Coal Mines and Coal Related Companies.It owns majority interests in 28 coal mining operations located in the United States and Australia.The Company holds approximately nine billion tons of proven and probable coal reserves and more than 500,000 acres of surface property.

CONSOL Energy (CNX)  – One of the the biggest Coal Companies in  the US with a Market Cap of around $12 Billion.CONSOL Energy is not a pure play Coal Company rather it has equal interest in Gas and Coal.. The Company produces pipeline coalbed methane (CBM) gas from its coal properties in the Northern and the Central Appalachian basin, and oil and gas from properties in the Appalachian and Illinois Basins.During 2010, it had 13 mining complexes, including two 49% equity affiliates, all located in the United States. The Company had an estimated 4.4 billion tons of proven and probable reserves

Arch Coal ACI – Market Cap of $5.6 Billion .During the year ended December 31, 2009, the Company sold approximately 126.1 million tons of coal and  operated 19 active mines at 11 mining complexes located in the United States.  On October 1, 2009, the Company acquired Rio Tinto’s Jacobs Ranch mine with 345 million tons of coal reserves and integrated it into the Black Thunder mine.

Alpha Natural Resrouces (ANR) Market Cap of $7 Billion,Alpha Natural Resources  is a coal supplier in the United States. It operates 66 mines and 13 coal preparation plants in Northern and Central Appalachia and the Powder River Basin. During 2010, Alpha sold a total of 84.8 million tons of steam and metallurgical coal.

Walter Energy (WLT) – Market Cap of $7.5 Billion  primary business, the mining and exporting of hard coking coal for the steel industry.During 2010, the Underground Mining segment produced 6.7 million tons of metallurgical coal. Underground Mining also extracts methane gas, from the Blue Creek coal seam. Its natural gas business produces approximately 38 million cubic feet of gas daily from over 1,700 wells

Massey Energy (MEE) – Market Cap of $6.9 Billion.Massey Energy Company (Massey), incorporated in 1920, is a coal producer in the United States. At January 31, 2011, the Company operated 84 mines, including 66 underground mines  and 18 surface mines in West Virginia, Kentucky and Virginia. On April 19, 2010, the Company completed the acquisition of Cumberland Resources Corporation and certain affiliated entities (Cumberland). The Cumberland operations include primarily underground coal mines in Southwestern Virginia and Eastern Kentucky. The Company owns a majority interest in Coalsolv, LLC (Coalsolv).

Alliance Resource Partners (ARLP) has a Market Cap of around $3 Billion.It operates primarily to serve  United States utilities and industrial users. It operates nine underground mining complexes in Illinois, Indiana, Kentucky, Maryland, and West Virginia. At December 31, 2009, ARLP  had approximately 647.2 million tons of coal reserves in Illinois, Indiana, Kentucky, Maryland, Pennsylvania and West Virginia and sold 25 million tons of coal.

Patriot Coal Corporation (PCX) has a market cap of $2.25 billion and produces coal in the eastern United States, with operations and coal reserves in Appalachia and the Illinois Basin. It is also a producer of metallurgical coal. The Company’s operations consist of 14 mining complexes which include company operated mines, contractor-operated mines and coal preparation facilities.During the year ended December 31, 2009, the Company sold 32.8 million tons of coal and  controls approximately 1.8 billion tons of probable coal reserves

International Coal Group (ICO) – – Market Cap of $2.2 Billion  is a producer of coal in Northern and Central Appalachia .As of December 31, 2009, the Company operated a total of 11 surface and 11 underground coal mines located in Kentucky, Maryland, Virginia, West Virginia and Illinois.The Company’s mines in Central Appalachia produced 10.1 million tons of coal in 2009, and the mines in Northern Appalachia produced 3.9 million tons of coal in 2009.

Oxford Resource Partners (OXF) has a market cap of around $550 million and produces coal from mines  in Ohio.Company produced 5.8 million tons of coal, including 0.4 million tons produced from the reserves it acquired in western Kentucky from Phoenix Coal and sold 6.3 million tons of coal.OCX controls 91.6 million tons of proven and probable coal reserves

James River (JRCC) – Market Cap of $900 million, James River Coal Company mines coal through six subsidiaries  located in eastern Kentucky and in southern Indiana. As of December 31, 2009, the Company’s six mining complexes included 14 underground mines, 10 surface mines and 10 preparation plants, five of which have integrated rail loadout facilities  As of December 31, 2009, it controlled approximately 271.1 million tons of  coal reserves. and  produced 9.8 million tons of coal

Coal Stocks Symbols

1 Arch Coal, Inc. ACI
2 Alpha Natural Resources, Inc. ANR
3 Peabody Energy Corporation BTU
4 CONSOL Energy Inc. CNX
5 Evergreen Energy Inc. EEE
6 Massey Energy Company MEE
7 Natural Resource Partners LP NRP
8 Penn Virginia Resources PVR
9 Walter Energy, Inc. WLT
10 Yanzhou coal mining Co. (ADR) YZC
11 International Coal Group, Inc. ICO
12 Penn Virginia GP Holdings, L.P. PVG
13 Patriot Coal Corporation PCX
14 Cloud Peak Energy Inc. CLD

Market Vectors Coal ETF (KOL) Analysis

Market Vectors KOL ETF provides a good well diversified way to invest in Coal which is seeing a massive upsurge in demand driven by India and China.Note KOL is the only listed Coal ETF with Assets under Management (AUM) of nearly $900 million.It invests mostly in large cap companies and has a global scope.For investors looking for individual stocks here is a list  of US Solar Companies and Stocks and Indian Coal Stocks.China with around 3 Billion Tons of Coal Consumption and India with another 500 million Tons depend on King Coal for majority of their Energy Needs.While China generates 80% of its Electricity from Coal,India generates around 65%.While both countries have Huge Reserves and Production of Coal,their voracious demand is leading to surging imports.These Imports are being sourced from countries like Australia,Canada and USA which are going through Coal Mining Booms.Ports are getting congested as Infrastructure failed to meet the growing coal needs of India and China..The Biggest Advantages of Coal its Abundance and  Cheapness of Coal has made it the Fossil Fuel of Choice for Electricity Companies building power plants in developing countries despite its Drawbacks.This has led to a fight to secure Coal Supplies through vertical integration into buying up of coal mines,building ports and railways to transport Coal.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.

KOL ETF

Market Vectors Coal ETF (KOL), which was launched in January 2008.

KOL Composition

KOL  is composed of 40 coal stocks  with the Top 25 Holdings make up 93% of the weight of the ETF.The ETF has  5 holdings with weight greater than 5% and has a well diversified mix of geograhies from USA,China and Indonesia.KOL largely has large cap stocks which make up more than 80% of the market cap with Mid Caps at 17% and Small Caps at a miniscule 3%.

1) Coal Sectors form 100% of the ETF Market Cap – The ETF has 5 sectors of Coal Mining and Produciton,Coal Equipment,Coal Technology,Coal Power Generation and Coal Transportation.Not surprisingly Coal Mining forms 68% of the Market Cap while Coal Mining Equipment forms 16%.This makes sense as KOL is mainly a play on Coal as a Mineral .

2) Top 5 Companies form 40% of the ETF– The Top 5 Constituents of the ETF namely Peabody,Consol Energy,China ShenHua,Joy Global and Bucyrus form 40% of the ETF’s value.2

3) Valuation of the KOL is currently quite high – The P/E and P/B of the ETF at31x ad 4x is quite high and reflects the current bull run in Coal Stocks.It may not be an oppurtune time to invest in this ETF at the present time,however its a good long term buy because Coal compared to Oil is still quite cheap.Beside KOL has given astounding returns in 2009 and 2010 vastly outperforming S&P and the Energy Index

Despite the high valuation,KOL gives a very good dividend yield of around 2%.

4) KOL Cost is cheap– The ETF is charging a total expense of 0.6% of the Weekly Average Assets which is quite cheap.It allows an investor to invest in top quality Global Coal Stocks from different countries at a relatively low cost which makes it an ideal Coal Play.

 5) Stowe Coal Index – KOL follows the  The Stowe Coal Index which is a trademark of Stowe Global Indexes LLC and is licensed for use by Van Eck Associates Corporation in connection with Market Vectors Coal ETF (KOL).

Summary

KOL has managed to rectify most of its drawbacks since its inception when it held a large percentage of coal utilities like Huaneng and has become an ideal way to invest in Coal.Given the run up in commodity prices and the sharp surge in Coal prices,KOL valuation has increased quite dramatically rising more than 30% in 2010 after a 150% run up in 2009.This may not be the best time to get in,however the massive takeover fights and high valuation being given to Coal Assets may imply that KOL might not come down in price anytime soon.The growing energy needs of China and India make KOL one of the best ways to play this stock.It is an ideal investment tool for buying into higher Oil Prices as well.

Details of KOL Holdings

Company Ticker Shares Market Value % of net assets
Joy Global Inc JOYG US 754,524 $74,637,514.08 8.36%
China Shenhua Energy Co Ltd 1088 HK 15,729,908 $73,754,597.65 8.27%
Consol Energy Inc CNX US 1,391,943 $73,104,846.36 8.19%
Peabody Energy Corp BTU US 1,064,666 $72,514,401.26 8.13%
Bucyrus International Inc BUCY US 765,138 $69,971,870.10 7.84%
Walter Energy Inc WLT US 328,702 $46,402,861.34 5.20%
Bumi Resources Tbk PT BUMI IJ 112,752,500 $42,134,912.20 4.72%
Massey Energy Co MEE US 629,898 $41,989,000.68 4.71%
Alpha Natural Resources Inc ANR US 734,079 $41,915,910.90 4.70%
Yanzhou Coal Mining Co Ltd 1171 HK 11,027,961 $41,092,030.88 4.60%
Arch Coal Inc ACI US 1,024,996 $35,393,111.88 3.97%
China Coal Energy Co 1898 HK 25,880,095 $35,153,626.34 3.94%
Adaro Energy Tbk PT ADRO IJ 117,347,215 $31,088,715.90 3.48%
Exxaro Resources Ltd EXX SJ 1,110,674 $28,817,320.50 3.23%
Patriot Coal Corp PCX US 595,166 $15,611,204.18 1.75%
Fushan International Energy Group Ltd 639 HK 19,212,067 $14,787,805.75 1.66%
Tambang Batubara Bukit Asam Tbk PT PTBA IJ 5,270,000 $13,596,882.95 1.52%
International Coal Group Inc ICO US 1,146,584 $12,589,492.32 1.41%
MacArthur Coal Ltd MCC AU 950,974 $12,084,011.61 1.35%
Aquila Resources Ltd AQA AU 1,099,055 $11,191,265.96 1.25%
Indo Tambangraya Megah PT ITMG IJ 1,943,052 $11,160,935.36 1.25%
22 Whitehaven Coal Ltd WHC AU 1,432,014 $10,592,590.12 1.19%
23 Coal & Allied Industries Ltd CNA AU 79,797 $10,319,721.99 1.16%
24 Straits Asia Resources Ltd SAR SP 4,027,200 $8,743,562.03 0.98%
25 Cloud Peak Energy Inc CLD US 398,185 $8,660,523.75 0.97%
26 New Hope Corp Ltd NHC AU 1,497,136 $7,882,907.33 0.88%
27 SouthGobi Energy Resources Ltd 1878 HK 510,997 $7,434,747.03 0.83%
28 Hidili Industry International Developmen 1393 HK 6,304,307 $5,860,978.12 0.66%
29 White Energy Co Ltd WEC AU 1,590,286 $5,195,803.01 0.58%
30 Semirara Mining Corp SCC PM 896,152 $4,773,223.54 0.53%
31 Indika Energy Tbk PT INDY IJ 9,155,000 $4,373,953.81 0.49%
32 James River Coal Co JRCC US 181,724 $4,323,213.96 0.48%
33 Gloucester Coal Ltd GCL AU 318,392 $3,660,613.96 0.41%
34 COCKATOO COAL LTD COK AU 5,197,173 $2,832,707.41 0.32%
35 FreightCar America Inc RAIL US 78,058 $2,387,013.64 0.27%
36 Headwaters Inc HW US 395,652 $2,358,085.92 0.26%
37 Nippon Coke & Engineering Co Ltd 3315 JP 957,000 $1,785,432.86 0.20%
38 Net Other Assets / Cash 0 $870,630.06 0.10%
39 PUDA COAL INC PUDA US 127,241 $763,446.00 0.09%
40 Western Coal Corp WTN CN 43,470 $537,340.66 0.06%

Source – http://www.vaneck.com/funds/KOL.aspx

 

Indian Coal Stocks

1) Coal India Limited (CIL)– The State Owned Giant Coal Producer dwarfs the other companies through its sheer size,scale,cost and reach.The company has fared poorly in the current year after its IPO as its production growth has almost come to Zero.However its sells coal at such a low cost,that it could easily raise prices of coal in select categories to meet its financial goals.One of the safest investments in the stock market.It posseses high level of cash,low valuation compared to global peers and has a huge room to raise coal prices in the future.

2) Neyveli Lignite Corporation is a PSU like NTPC and is also involved in lignite mining company in India. The company is mainly based out of the southern state of Tamil Nadu and mines some 24 million ton of lignite per year with an installed capacity of 2490 MW

3) Singareni Collieries Company Limited (SCCL) is a PSU  jointly owned by Andhra Pradesh and the Federal Governm .The company is involved in mining coal  in the GodavariValley region, with reserves of around 8 Billion Tons with production of around 50 million tons a year.Note listed currently still one of the major coal companies in India.

1366 Technologies – Will More US Government Millions go Down the Drain aka Evergreen,Solyndra ?

5 Jul, 2011 by
Solar Cells,Solar Energy,Solar EPC,Solar Panels

1366 Technologies has got a $150 million DOE Loan Guarantee as the startup looks to raise $300 million to fund its solar wafer producing factory.Note the company is using an innovative technology which it says will be game changer in reducing the costs for making solar wafers.Note Solar Wafer Companies in China have managed to raise scale and reduce costs substantially in recent years winning marketshare from European companies like REC and Solarworld.The smaller companies like PV Crystalox are in deep trouble because of their high cost of operations and are trading at a fractional of their book value.Its a tough environment for solar companies especially if they are starting out as established solar panel companies like Evergreen Solar are facing potential bankruptcy.Evergreen Solar got millions of dollars in grants and loans from Massachusetts however the company has been forced to shut down its factory.Like 1366 Technologies Evergreen too uses a unique technology “String Ribbon” to producer solar wafers .However it has not been able to scale and reduce costs compared to the mainstream silicon solar wafer producers like LDK and GCL.

How to Save Electricity and Reduce Home Power Bills in India (Simple Ways for Lighting,Home Appliances and Entertainment)

5 Jul, 2011 by
Energy

India suffers from a massive electricity deficit with large swathes of the country undergoing power blackouts of as long as 8-10 hours on a regular basis.The problem becomes even more acute in the summer season when air conditioners are being used in an increasing number of homes and offices.The industry too is using more and more amounts of electricity as the Indian economic growth rate has exceeded at 8% in the last few years.The electricity situation has not improved and looks like it will become more miserable.The sorry state of affairs is that the cost of fuel is rising but the electricity regulators are loath to increase prices.This means that Indian electric utilities will supply low power as they will be reluctant to buy higher cost electricity.According to CEA,India had a peak demand of around 116 MW in Apri-Dec 2009 with 101 GW of Supply resulting in a 12.5% Demand Deficit.The Fast Growing Economy has resulted in even higher demand for power which has not been met by increased demand.

With an investment of 10 billion dollars in energy efficiency improvements, India’s economy could save  183.5 billion kilowatt hours, according to a new report from the World Resources Institute (WRI).

Total Installed Capacity By Energy Source

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.State Run Companies NHPC and SJVN are responsible for most of the Hydro Capacity.Some private players like the JP Group are also entering the picture.India’s Nuclear Energy Capacity is quite low,however the recent India USA Nuclear Deal should improve that with India planning around 2 GW of Nuclear Capacity addition per year.Renewable Energy forms only 7.7% of the Capacity with around 11 GW of the 16 GW from Wind Energy.

Relying on Coal Power is dangerous for the environment as it results in high pollution and emission of green house gases not to speak about the indirectly related deaths of coal miners.The Disadvantages of Coal are many and Green Companies in India are increasing to fill the Gap.However even with all sources of energy being pressed India will still remain in deficit making it important to save electricity which is the easiest way.

Why India’s Green Energy 12th Five Year Plan Target of 17000 MW is Too Low

Ways to Save Electricity at Home

Lights

1) Buy energy saving light bulbs

2) Use LED Lights and CFL Bulbs.They provide more energy and have higher efficiency compared to normal bulbs and lights.They are also economical in the long run

3) Turn off Lights wherever possible,Use less lights in home and light them only when necessary.In case of offices use automatic sensors which shut off the lighting system when not in use

4) Unplug the electrical appliances when you are not using them as they take a small amount of electricity even when they are not being used

5) Use light coloured curtains and make use of the natural sunlight as much as possible

Home Appliances

1) Keep Refrigerators at optimum tempereature  as Refrigerators account for about 20% of Household electricity use.
Make sure your dishwasher is full when you run it and use the energy saving setting, if available, to allow the dishes to air dry. Regularly defrost manual-defrost refrigerators and freezers and Make sure your refrigerator door seals are airtight.Avoid putting hot or warm food straight into the fridge

2) Replace conventional regulators with electronic regulators for Fans

3) Use Microwave ovens as they are more energy efficient than gas stoves

4) Washing Machines should only be used with full loads with optimal amount of water and detergent.

5) For Air Conditioners always keep them in energy saving mode.Don’t keep them at too cold a setting which will waste large amounts of energy as well.Make sure that that the AC is shaded and not exposed to direct sunlight.Keep the room tightly sealed and always use ceiling fans as they reduce the amount of electricity.

6) Use Energy Star Home Appliances in India which come with a star rating from BEE.

Televisions,LCDs and Computers

1) Do not switch on the power when Audio Visual   Systems are not in use

2) Keep your Screen in a power saving mode

3) For those replacing their old TV sets,buy a LED TV  which is much more efficient at saving power than a LCD.A Plasma TV uses much more power and should be avoided.

4) Do not keep the chargers for your laptop and mobile phones plugged in as they also draw small amounts of power constantly.

Last of all try and use Renewable Energy if you can afford it.

 

 

Nuclear Power Plants Pros and Cons – Europe Decides Cons too Disastorous

5 Jul, 2011 by
Nuclear Energy

Nuclear Power Plants

Nuclear Power Plants around the globe are being closed at a furious rate particularly in Europe. The Fukushima Disaster has caused a nuclear winter in the nuclear power plant industry. Even Nuclear Power Plant Equipment Leaders like Toshiba are changing their strategy to concentrate on Renewable Energy. Even new Nuclear Power Plants being built in India and China are facing massive opposition. New Nuclear Power Plants being built at Jaitapur and Tamil Nadu have met massive organized protests by local citizens throwing the future of nuclear power plants in jeopardy. The Communist Government in China too is going slow on the biggest rollout of nuclear power plants in the world. High Cost Escalation and long project delays had already made building new Nuclear Power Plants in the Developed World almost impossible.

Japan and Germany which are two of the largest nuclear countries have decided to shut down all nuclear power plants. Switzerland and Belgium too have decided to kill the nuclear power industry in their countries. In this light it becomes very important to examine the pros and cons of nuclear power plants. A cost benefit analysis of nuclear energy is crucial as new plants cost billions of dollars and can cause massive costs if things go wrong as was the case with Chernobyl and Three Mile Island Disasters in the 1980s.

In the aftermath of the Nuclear Accident, Germany had temporarily shut 7 of its nuclear reactors none of which is going to be reopened. The other nuclear reactors will also will be completely mothballed by 2022 when their normal life ends. This is a huge death blow to nuclear energy as Germany had one of the largest installed capacities of nuclear power. Switzerland and Japan have killed nuclear energy as well after the catastrophic loss from nuclear power which led to radioactive rain in Seoul, deathly radiation in parts of Japan and the evacuation of 20 kms area from the site of the nuclear plant of TEPCO.

Nuclear Power Plants Pros

  1. Low Fuel Cost and High Energy Density – Nuclear Power Plants  requires very little fuel mostly in the form of uranium. Nuclear Power has the highest energy density compared to other forms of energy. Nuclear Energy Efficiency is thousands of times more effective than oil,gas or coal energy. This is a huge advantage over other fossil fuels whose costs are increasing at a drastic  rate every year.
  2. No Greenhouse Gas Emissions/Air Pollution – Nuclear Power Plants do not produce any GHG emissions or cause air pollution from the combustion of fossil fuels unlike coal, oil or gas.T his makes them very attractive as a source of cheap, non carbon dioxide producing electricity.
  3. High Load Factor – The Load Factor for Solar and Wind Energy ranges from 15-40% which is quite low compared to Nuclear Power Plants. Nuclear Power on the other hand  has a load factor of almost 85-90% which is the highest in the energy industry.
  4. Huge  Potential –Nuclear Power Potential is almost infinite compared to the limited and peak features of other forms of  energy like Wind, Geothermal, Oil, Gas and others. Only Solar Energy can be said to have more potential. Note new technologies and fuels like fast breeder and thorium are still in the works which can increase the potential of Nuclear Power more.
  5. Nuclear Power provides 15% of the world’s Electricity Requirements – Nuclear Energy accounts for around 15% of the world’s production of electricity and for some countries like France there is no alternative in the short term with 80% of the electricity coming from nuclear reactors.

Nuclear Power Plants Cons

  1. Nuclear and Radiation Accidents – This is the biggest con for Nuclear Energy and has been repeated 3 times in the last 30 years in Japan,Russia and USA. The fear of a repeat is so great that despite all the safety arrangements touted by the nuclear equipment operators and suppliers, Nuclear Energy faces an uncertain future.
  2. Nuclear Waste Disposal – Again a massive problem as the spent Nuclear Rods of Nuclear Reactors are prohibitively costly and difficult to dispose of. Spent nuclear fuel is initially very highly radioactive and so must be handled with great care and forethought. There is no foolproof way to dispose nuclear waste fuel after it is used in the Nuclear Reactors. The area around Nuclear Waste Sites can be dangerous to humans for hundreds of year as complex nuclear elements have half lives running into many years. The United States had accumulated more than 50,000 metric tons of spent nuclear fuel from nuclear reactors. Permanent storage underground in U.S. had been proposed at the Yucca but that project has now been effectively cancelled. Presently, waste is mainly stored at individual reactor sites and there are over 430 locations around the world where radioactive material continues to accumulate.
  3. Low level of Radioactivity from Normal Operations – The nuclear power plants also produces a large volume of low-level radioactive waste in the form of contaminated items like clothing, hand tools, water purifier resins, and (upon decommissioning) the materials of which the reactor itself is built.
  4. Nuclear proliferation – Many countries have used the ruse of nuclear energy programs to generate fuel for developing nuclear weapons .Currently there is a major international controversy with regards to the Iranian Nuclear Energy Program. Nuclear Reactors are targets for rogue state actors who can steal the fuel for creating radiation weapons.
  5. High Capital Investment, Cost Overruns and Long Gestation Time – The time to construct a large Nuclear power project can take between 5-10 years which leads to time and cost overruns. The Nuclear Plant being built in Finland has been one of the biggest failures in Project Finance. The reactor has been delayed by many year and has led to a massive cost overrun. Areva the main nuclear equipment supplier has endured huge losses.In fact the safety regulations and the long time of construction has brought the Nuclear Energy in the Developed World to almost a halt.
  6. Regulations – The Regulations for Nuclear Power Plants are many and cumbersome due to the massive risks of a failure of a nuclear reactor. This greatly increases the costs of generating nuclear power. It also leads to a long time in the actual start to the completion of a Nuclear Plant.
  7. Fuel Danger – Uranium which is the main fuel used in Nuclear Fission Power Plants is limited to a few countries and suppliers. Its use and transport is regulated by international treaties and groups. India which came under sanctions because of testing of nuclear weapons had to shut many of its nuclear plants because of embargoes.

Nuclear Power in India Issues – High Costs,Health Hazards,Massive Delays and Not in My Backyard Protests

23 Jun, 2011 by
Energy,Nuclear Energy

India has set a target of 20 GW of Nuclear Energy by 2020 from around 5 GW now and has already signed deals with major nuclear equpment suppliers like Areva,GE-Hitachi and Toshiba.However the Nuclear Disaster at Fukushima has changed things on the ground with protests growing by the day.Note only are the proposed nuclear reactors at Jaitapur facing massive protests,even the existing nuclear energy plants in India are seeing locals raising their voices.Recently many prominent citizens of India signed a protest letter against the upcoming Jaitapur plants.Note the advantages and disadvantages of nuclear power has been debated on for a long time.The catastropic risk of a nuclear reactor meltdown is the biggest con of nuclear energy and has made it intolerable in a number of countries.After Japan has decided to kill nulcear power in the country,other progressive countries like Germany,Italy and Switzerland too are going to switch off nuclear reactors once the life of the existing plants are over.

Note the cost of nuclear power has grown at a distressing pace with massive time and cost overruns.The Areva Nulcear Plant is going to cost Rs 20 crore a MW which is much more than a Thermal Power plant and even costlier than Solar Power which has the highest capital requirement amongst major energy sources.Besides disposal of nuclear energy waste is a huge problem even for countries like USA and Japan which have huge nuclear power industries.For a country like India with poor safety record ,nuclear waste disposal would be a nightmare.India should learn from the example of Germany and Italy and stop going down the nuclear path and look for other green energy sources.Note different forms of Renewable Energy have their own pros and cons but Nuclear Energy Risks are too great to be ignored.

NIMBY Protests Growing

Rawatbhata Nuclear Power Plant in Rajasthan is situated near a major dam which makes it susceptible to major flooding.Besides the villages near the plant have reported higher incidences of abortion and cancer which is typical of radiation effect of human health.A new plant being proposed in Bhavnagar,Gujarat too is seeing protests being organized by villages near the plant.

Nuclear Plants face massive cost overruns

New Nuclear Power Plants face massive delays leading to much higher costs as rule and regulations become tougher.The Nuclear Power Already the nuclear renaissance which was supposed to be boosted by India and China is coming under attack.India’s nuclear power plant to be built at Jaitapur by Areva is seeing massive protests by local villagers as well as intellectuals alike.India has around 4.5 GW of Nuclear Power Plant Capacity which it proposes to increase by around 1-2 GW every year.This will hardly make a huge difference to India’s massive power needs which rerquires 10 GW of power every year.Nuclear Energy Disadvantages with the Tail Risk of a Meltdown are too huge to be ignored.China is the other country with massive nuclear power plans,however the government too has decided to be careful.China has more than doubled its solar power target to 50 GW by 2020 from 20 GW.

Fear of radiation grips locals residing near Rajasthan’s Rawatbhata nuclear power plant

The Rawatbhata nuclear power plant is built near the Maharana Pratap Dam, which the locals consider as vulnerable in wake of an occurrence of an earthquake or flood.

According to locals in case of an accident, the leaks from the reactor’s core can be extremely dangerous and threatening in the surrounding community.

“If the cooling system of the nuclear reactor ever fails, the toxic elements from the plant could mix themselves in the water from the lake. This would be hazardous for the population living here and in the nearby villages. The radiation will have prolonged affects in the 16-kilometer stretch of Rawatbhata and will continue to haunt the residents of nearby villages for a long time,” said Sunil Kumar, a local resident.

Meanwhile, local medical institutions say there has been a striking rise in the number of abortion and cancer cases in this region in the last few years.

Revolt brewing against nuclear plant in Bhavnagar – Hindu

The first bugle of revolt against the proposal to set up a 6000 MW capacity nuclear power plant at Jaspara-Mithi Virdi village in Bhavnagar district in the Saurashtra region of Gujarat was sounded on Friday.
The village panchayats of over 50 coastal villages in the district, which apprehend direct impact if the nuclear power plant is set up, took a “do or die” pledge at a public meeting at Mithi Virdi village not to allow the government to acquire their “fertile land” to set up the nuclear plant.

Ashok Parthasarathi: Renewable energy is the future, not nuclear – ET

It is well-known that because of the technology involved, nuclear power reactors are intrinsically highly capital-intensive. When one adds the protective technology and equipment, as well as the waste treatment technology and equipment described above, the capital costs go through the roof. Thus the capital cost of the ‘latest’ European Power Reactor (EPR) which the French firm Areva is to set up at Jaitapur in Maharashtra is around Rs 20 crore per Mw, compared to Rs 15 crore for solar power and Rs 6-7 crore per Mw for wind power. Such capital cost levels, in turn, take the cost of nuclear power to Rs 7-8 per KWh (or unit of power generated), making the reactors totally uneconomic.

Then there is the problem of recurring slippages in the time scales of setting up nuclear power plants, particularly imported ones. For example, the two 1,000 Mw Russian reactors coming up at Kudankulam in Tamil Nadu are already four years behind schedule, provided they are actually commissioned in 2011 and 2012, as the Nuclear Power Corporation claims they will be. The four Areva 1,650 Mw EPRs — one each in France and Finland, and two in China — are also four years behind schedule, with no firm commissioning dates indicated by Areva as of now.

 

Toshiba acquiring,investing in Green Companies (Landis & Gyr,Unison) as Nuclear Energy faces Fukushima Winter

31 May, 2011 by
Japan,Nuclear Energy,Renewable Energy,Smart Grid,Solar Energy,Solar EPC,Solar Panels,Wind Energy

Japanese Nuclear Giant Toshiba which is the second largest seller of complex nuclear equipment globally is looking to shift its focus towards Renewable Energy and Energy Efficiency.The company is already facing delays in shipping nuclear reactors to customers as the Fukushima Disaster makes governments around the world rethink their nuclear power ambitions.The Nuclear Energy Disadvantages are winning over the Advantages currently in public sentiment.Toshiba which acquired US Westinghouse has a target of selling 39 nuclear reactors which is getting delayed.With advanced nuclear power countries like Germany,Switzerland and Japan killing nuclear energy,the going looks tough for Toshiba.The company was already facing tough competition from the GE-Hitachi and Areva as well as new players from South Korea and China in the nuclear equipment market.

Toshiba acquiring Green Companies

Nuclear Energy is facing slowdown even from countries like China which has the largest growth planned for nuclear energy .Even India is facing tough opposition in building new nuclear power plants (Jaitapur).With the winds clearly turning against nuclear energy which was already facing a slow death in developer countries,Toshiba has started to make acquisitions in the Clean Technology industry.The company has bought Landis&Gyr which is one of the biggest  global smart meter manufacturers.The company has also bought a stake in South Korean Wind Company Unison.

Toshiba Solar Plans

Toshiba the Japanese Giant known for its Global Leadership in Nuclear Power Equipment,Electronics and Memory Businesses has decided to become a big player in  the Solar EPC business as well.This strategy is quite different from the other global conglomerates entering the Solar Energy Field.It is already in the process of building a 10 MW plant in Bulgaria and plans to generate around  $2 Billion Dollars annually from US and Europe by 2015.

Competition in the Nuclear Equipment Market Increasing

The Nuclear Equipment Industry is seeing intensifying competition with the entry of the Chinese and the South Koreans.While Nuclear Energy Market in the Developed World has hit a Virtual Wall,the Emerging Markets are still growing strongly.China and India are the biggest growth markets with other smaller nascent markets like Vietnam,UAE,East Europe and others.The fight between the Great Powers like Russia,USA,Japan has intensified for a piece of this lucrative market.Russia state owned Rosatom is leaving no stone unturned to garner a bigger marketshare of the Nuclear Equipment Market.It is using its vertically integrated model right from supplying uranium raw material to waste disposal to penetrate European Markets.

Japanese Giant Companies already making huge investments into Green Energy

Most of the Japanese companies are making huge investments into the Green Energy Space.Here is a list of Japanese companies in Solar Energy.

1) Sharp – Sharp,the Japanese Zaibatsu known more for its Electronics Products is also the world’s No 1 Company in terms Solar Module Revenues.Sharp has been the solar world leader since the past 4-5 years despite stiff competition recently  from upcoming Chinese Crystalline Solar (c-Si) players and Thin Film Leader First Solar

Sharp’s c-Si division is not cost competitive with the Chinese and Taiwanese companies as its cost structure is almost 30-40% higher than the cheapest Chinese producers.Though the quality of Sharp’s crystalline silicon modules is considered much better,the cost difference has become too big in a rapidly commoditizing industry

While companies like Masdar are abandoning their Thin Film plans,Sharp has started shipping a-Si modules from its 1 GW capacity  plant in Sakai.With its established distribution strengths and technological abilities in LCD Technology,Sharp is one company that can survive the c-Si onslaught.

2) Sanyo-Panasonic  – Sanyo plans to invest more than  70% of its total investment over the next  3 years in its renewable energy and energy storage segments.Sanyo has never been as successful in the hyper competitive electronics market as other Japanese companies like Sony or Sharp.However its lithium batteries and solar panels possess cutting edge technology.Its solar panels with proprietary HIT technology rival the best  in terms of efficiency and quality.

Panasonic after acquiring Sanyo has completely changed its strategy to become a major Green Player targeting a Major Percentage of Sales in the future to come  from Green Products.Panasonic which is the world’s biggest Plasma TV producer is going to spend $1 Billion on Green Building investments.Panasonic will combine its Green Strengths with Sanyo’s to sell a complete Eco-Friendly Home complete with Solar Power,LED Lighting and Energy Storage and Efficiency capabilities.In Solar where Panasonic  is the No. 3 player in Japan behind Sharp and Kyocera ,it is speeding up the expansion of solar capacity.It will spend more than $500 million aiming to triple its energy solutions business in Europe to 800 Million Euros by 2016.

3) Kyocera – Kyocera is Japan’s second largest solar panel producing company.The company recently won a major contract to build a solar farm in Thailand.Unlike other companies it has been slow off the blocks and unless  it perks up its game,it is likey to become a even smaller company in the global scheme of things.

4) Mitsubishi – Mistubishi is another old time Japanese solar company which has a low profile solar module and system business.The company is known for its high quality panels and has a decent presence in USA and Japan.However like Kyocera it has not been aggressive enough leading to loss in marketshare.

5) Mitsui – Mitsui Engineering and Shipping,one of Japan’s huge zaibatsus is planning a foray into the solar energy market as well.The Company is being supported in its initiative by METI which will collaborate with the Tunisian government in setting up a combined gas solar hybrid plant.A 5 MW Solar CSP plant will be set up by 2013 to demonstrate the technology.The company also owns a solar system business in the US after acquiring Sunwize

6) Toshiba – Toshiba the Japanese Giant known for its Global Leadership in Nuclear Power Equipment,Electronics and Memory Businesses has decided to become a big player in  the Solar EPC business.This strategy is quite different from the other global conglomerates entering the Solar Energy Field.South Korean Players like Samsung,LG,Hanwha and Hyundai are all building Crystalline Silicon Modules.Toshiba wants to enter the Smart Grid business by leveraging its experiece of the Solar EPC business.It is already in the process of building a 10 MW plant in Bulgaria and plans to generate around  $2 Billion Dollars annually from US and Europe by 2015

7) Honda – Honda,the Japanese auto giant has also joined the Solar Energy Race by selling Thin Film Modules based on CIGs technology.Japan’s conglomerates like Sharp,Kyocera,Mitsubishi and Panasonic already have big solar manufacturing operations with Sharp being the largest Solar Company in the World.Honda which has a small presence in the Solar Energy through its subsidiary Honda Soltec is expanding its lines of modules for the domestic market.

8 ) Solar Frontier – Solar Frontier is a subsidiary of Showa Shell Sekiyu and is listed on the Japanese Stock Exchange.The Company has big plans for the Solar Energy Market planning to increase its capacity by more than 10 times in 2011 to around 1 Gw in total.All its 3 plants are located in Miyazaki in Japan and uses previous plasma plant of Hitachi.Solar Frontier claims 11.5% efficiency for its CIS modules which are expected to go upto 14% by 2014It has signed a distribution deal with GE to sells its Copper Indium Selenide (CIS) Panels in USA

Toshiba cautious on nuclear sales, eyes renewables

Toshiba Corp said it may not reach its target of 39 orders for nuclear reactors until 2-3 years later than expected, and that it would increase focus on renewables and smart grids as the crisis rumbles on at the Fukushima Daiichi nuclear plant.Orders for four AP1000 reactors in China are on target, but approval delays in the United States and other countries could delay by 2-3 years the firm’s goal to expand nuclear sales to 1 trillion yen ($12.2 billion) and 39 reactor orders by March 2016, Sasaki said.He added that the company’s direct checks with customers had not yet found any planning to change their orders.It now targets sales of 350 billion yen in solar, hydroelectric, geothermal and wind power technologies, 900 billion yen in smart grid products and 800 billion yen in low-power consumption motors, inverters and batteries.On Monday, Toshiba announced an alliance with South Korean wind power firm Unison Co. The Japanese firm will buy some 3 billion yen in Unison convertible bonds as the first step of the deal and the Nikkei newspaper reported it would raise its stake to about 30 percent in about a year.

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