Greece Referendum on European Bailout – 5 Points you Want to Know

6 Jul, 2011
World Economy and Markets

Greece Referendum is set to become the hottest media topic related to the European Debt  Crisis in the coming months.In a totally surprising move Greek Prime Minister George Papandreou called a referendum and a parliamentary confidence vote on 31st October just a week after  the European leaders had agreed on a package to .Papandreou’s personal and government popularity have plunged amid fresh austerity measures that sparked a wave of social unrest.The PM is calling this vote probably to bolster his government as it loses support of the masses.Mr Papandreou, whose ruling Socialist party has suffered several defections as it pushes waves of austerity measures through parliament while protesters rally outside, said he needed wider political backing for the fiscal measures and structural reforms demanded by international lenders.

a) Recapitalize the Eurozone Banks

b) Agreed on a €100bn loan to Athens and Offered a 50% haircut on Greek Debt

c) Promised to increased the size of EFSF to almsot 1 Trilion Euros

This new Referednum promises to set the cat amongst the piegons once again and set off a new wave of crisis.

Here are some points that you need to keep in mind with this referendum

1)  The confidence vote will conclude late on Nov. 4, while the referendum will likely be held after the details of the European accord are tied up.The Referendum is supposed to occur early next year.It will be only Greece’s second in almost 40 years,the first being to oust the Monarchy.Referendum Legality is also being questioned since it can be only held for matters of national importance and not for Economic Matters.

2) The chances of the referendum passing are low as Most Greeks oppose last week’s European deal to address the country’s debt crisis.According to the poll, 58.9% of Greeks judge the new European deal as “negative” or “probably negative” for Greece, while nearly two-thirds said they felt unease, fear or rage at the decisions reached by European leaders.54.2% of Greeks thought a national referendum should be called to approve the new aid deal, compared with 40% who said Parliament should decide.

3) Total Default on Greek Bonds could occur if the Bailout Referendum Occures resulting in a Lehman style Event though probability of that happening is low.What is certain is that till the Referendum happens the Global Financial Markets will be plunged in Volatility

4) The popularity of all major political parties is low with 14-22% approval ratings.Nobody knows whether such unpopular politicians can convince the public of anything let alone a complex referendum which will be decided by emotional appeals rather than a logical cost benefit analysis

5) European Leaders were blindsided by this sudden decision of the Greek government and many consider it a betrayal after going through such painstaking negotiations over the past few months to hammer out a deal.Some consider it as Blackmail by Greece to the whole European Union.Sarkozy is “dismayed” by the Greek plan, Le Monde newspaper reported, citing unnamed people close to Sarkozy.

 

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Greek Debt Deal – Bondholders take 50% Loss- Who Wins and Loses

5 Jul, 2011
Europe,Italy,Spain

According to reports coming from Europe where the summit of major European leaders took place to resolve the growing debt crisis,a deal has been reached on Greek debt.The Euro 350 billion debt which dwarfs the size of the negatively growing Greek economy has been a major source of instability in the last 2 years.The private holders of the Greek government bonds have agreed to take a  50% writeoff on their holdings.This means that if they hold Euro 100 of bonds they have become Euro 50 now as the rest has been written off as bad debt.Not that it was not apparent as Greek CDS and Greek bonds were touching all times lows in the secondary market.In fact the only buyers of Greece bonds were the European Central Bank and the Greek banks.The capital markets had been going up in the last month in the hope of some sort of resolution.The deal does not look like a win win as there will be some big losers in this deal (though they were already losing for some time).Nicolas Sarkozy announced the deal which would be voluntary in nature so that the CDS would not be invoked.Here are the winners and losers from this deal

Losers

1) Greek CDS Holders – They would be one of the biggest losing part as ISDA will not invoke that this is a credit event in which the Greek bonds have defaulted despite the 50% haircut

2) Greek Citizens – They would have been better off if a more sustainable path had been paved since the estimates still call for Greece to have 120% debt to GDP ratio by 2020.This means that they will have to live in a generation of austerity and poverty

3) Greece Pension Funds and French Banks – The French Banks like BNP Paribas,Credit Agricole have the biggest holdings of the debt.So also Pension Funds in Greece and other places which will be suddenly seeing a big hole in their assets column

Winners

1) Euro – The currency has managed to survive this phase of the crisis and has managed to surge at least till now.

2) Italy,Spain and Portugal – The contagion to the bonds of these countries will be contained since Greece has not done a messy default.The yeilds on the bonds of these countries might go down at least temporarily

 

Greek bondholders to take 50% haircut – Marketwatch

French President Nicolas Sarkozy said at a press conference in Brussels that the 50% haircut will be a voluntary agreement.An involuntary writedown could have potentially constituted a “credit event” that would have required the payout on billions of euros in credit default swaps, instruments used to insure debt against non-payment.

Thursday’s deal means that Greece’s debt burden will fall by around €100 billion ($140 billion). Media reports earlier this week had put a possible haircut on Greek government bonds at between 40% and 60%.Sarkozy also announced that the European Financial Stability Facility will see an increase in firepower by four- or five-fold.

An expanded bailout fund is seen as crucial in ensuring that the debt crisis doesn’t engulf Spain and Italy.

Electronic Waste Recycling – Process,California E-Cycling Fees and Act of 2003 as USA Shockingly has failed to Pass a Federal E-Waste Law

14 May, 2011
USA

Electronic Waste is a massive problem in the Developed and Developing world with Thousands of Tons of Hazardous Electronic Waste being generated each year.With Electronics getting more ubiquitous and costs falling rapidly,Electronic Waste Problem is only going to increase.E-Waste is responsible not only for releasing dangerous substances into the environment it also causes deaths and injuries to poor in countries like India,China and Africa who are forced to work in extremely bad conditions.Electronic Waste Recycling is  the need of the hour but the governments around the world have not pushed hard enough.Europe has been at the forefront with the WEEE directive passed in 2002 while USA has been a laggard as usual failing to prevent toxic waste from being dumped in landfills and shipped to poor countries with lax environmental regulations.Electronic Waste Recycling Act of 2003 has been passed in California which again as usual has been leading the federal government on clean technology legislation.

How the Powerful Technology Industry have prevented USA from passing a E-Waste Management Law

It is quite shocking that USA which is the global leader in Technology with companies like Apple,Google,Microsoft,IBM does not have a federal law on regulation of electronic waste.It is the powerful corporate lobby which has prevented this hazardous waste from being obligatorily disposed of in an ecologically sound manner.It is surprising and shocking that USA has failed to pass the law which leads to thousands of tons of toxic electronics waste being shipped to countries like India besides polluting the landfills in America with hazardous materials as well.At present, there is no Federal mandate to recycle e-waste. There have been numerous attempts to develop a Federal law. However, to date, there is no consensus on a Federal approach.However any states have instituted mandatory electronics recovery programs. The following website provides regularly updated information on state e-waste legislation

What is Electronic Waste Recycling Process

Electronics  has grown at such a tremendous pace that Americans own approximately 24 electronic products per household.The electronic waste recycling business has involved greater diversion of electronic waste from energy-intensive downcycling processes (e.g., conventional recycling), where equipment is reverted to a raw material form. This diversion is achieved through reuse and refurbishing.

Process Steps

In developed countries, electronic waste processing usually first involves dismantling the equipment into various parts (metal frames, power supplies, circuit boards, plastics), often by hand.To obtain the highest possible result, labour intensive methods are used to completely disassemble and separate items into core materials and components.

In an alternative bulk system a hopper conveys material for shredding into an unsophisticated mechanical separator, with screening and granulating machines to separate constituent metal and plastic fractions, which are sold to recyclers.  Some of the emissions are caught by scrubbers and screens. Magnets are employed to separate glass, plastic and  metals.. Hazardous smoke and gases are captured, contained, and treated to mitigate environmental threat.

Alternatives to Electronic Waste Recycling

Reusing Electronics and Benefits

Reuse extends the lives of valuable products and keeps them out of the waste stream for a longer period of time. Reuse, in addition to being an environmentally preferable alternative, also benefits society.

Donating Electronics and Benefits

Donating used (but still operating) electronics for reuse extends the lives of valuable products and keeps them out of the waste stream for a longer period of time.By donating your used electronics, you allow schools, nonprofit organizations, and lower-income families to obtain equipment that they otherwise could not afford.s a business, you might be able to take advantage of tax incentives for computer equipment donations.

Electronic Waste Recycling Act of 2003
EWRA was signed into law on September 24, 2003, and amended by SB 50 (Stats. 2004, ch. 863) on September 29, 2004. One of the major objectives of the Electronic Waste Recycling Act, as amended, was to establish a new program for consumers to return video display devices, such as televisions and computer monitors, that are hazardous wastes when discarded. California consumers had to pay a fee of $6 to $10 at the time they purchase certain video display devices. Those fees are deposited into a special account that is used to pay qualified e-waste collectors and recyclers to cover their costs of managing e-waste.

Electronic Recycling Fee in California

California unlike the European Union has taken a different approach to funding of Electronic Waste Management.Whereas in Europe,”Producer Responsibility” is used to fund the disposing of e-waste,California charges the fee fro the customer of electronics. The Electronic Waste Recycling (eWaste) Fee is a fee imposed on the retail sale or lease of certain electronic products that have been identified by the Department of Toxic Substances Control (DTSC)  To remit the fee, a retailer must register with the Board of Equalization. A retailer may retain 3 percent of the eWaste fee it collects as reimbursement for costs associated with the collection of the fee.

The Electronic Waste Recycling Act had two main objectives:

1. To limit the amount of toxic substances in certain electronic products sold in California:  The levels of lead, mercury, cadmium, and hexavalent chromium allowed in materials that make up covered electronic devices are limited by California’s ROHS. Manufacturers of covered electronic devices are required to provide information  to: 1) reduce the levels of toxic substances in electronic devices they produce; 2) increase the use of recyclable materials in their products; and 3) provide outreach programs to consumers

2. To establish a funding system for the collection and recycling of discarded covered electronic devices.

Which sales and products are subject to the fee?

Effective January 1, 2005, the fee is due on the retail sale or lease of a new or refurbished* CED that has a screen size of more than 4 inches measured diagonally. CEDs include:

  • Televisions that contain cathode ray tubes.
  • Computer monitors that contain cathode ray tubes or use liquid crystal displays (LCD).
  • Laptop computers.
  • “Bare” cathode ray tubes or any other product that contains a cathode ray tube.
  • Televisions containing LCD screens, which includes any device containing an LCD display greater than 4 inches measured diagonally (viewable size), that has television tuner capability and can process a broadcast, cable, or satellite transmitted television signal (added July 1, 2005).
  • Plasma televisions (added July 1, 2005).
  • Portable DVD Players with LCD screens (added July 1, 2007).

Sources and Further Reads

  1. http://www.ban.org/
  2. http://www.boe.ca.gov/sptaxprog/ewfaqsgen.htm
  3. http://www.dtsc.ca.gov/HazardousWaste/EWaste/MoreInfo.cfm

Waste Electrical and Electronic Equipment (WEEE) – Brief Guide to ROHS,WEEE Directive,Regulations,Compliance,Revision and Collection

13 May, 2011
Europe

What is WEEE

WEEE refers to the  Waste Electrical and Electronic Equipment Directive issued by the European Community on E-Waste along with the Restriction of Hazardous Substances Directive in  2003 which regulates the collection,recycling and disposal of electronic and electrical equipment.The Directives are 2002/96/EC and 2002/95/EC and are going to be revised soon as 2/3rd of E-Waste in Europe continues to be dumped in Europe and Third World Countries .WEEE makes it mandatory for the producers of to dispose of the Electronic Waste.Unlike the USA which does not have such a strict policy,the companies must do so in an environment friendly way and can’t just export all the electronic junk ot Africa,India and China which has been the way of the industry till then.

The legislation provides for the creation of collection schemes where consumers return their used e-waste free of charge. The objective of these schemes is to increase the recycling and/or re-use of such products. It also requires heavy metals such as lead, mercury, cadmium, and hexavalent chromium and flame retardants such as polybrominated biphenyls (PBB) or polybrominated diphenyl ethers (PBDE) to be substituted by safer alternatives.The EU’s WEEE and RoHS laws simply serve as a template for national laws. They are transposed into national law at national level.Member States are required to draw up a register of producers and collect information on an annual basis on the quantities and categories of electrical and electronic equipment placed on their market, collected, re-used, recycled and recovered within that Member State and on collected waste exported.

WEEE Provision

The directive sets out collection requirements and a minimum collection target of 4 kg per inhabitant per year for WEEE from private households. In line with the so-called waste hierarchy, preference is given to re-using whole appliances of collected WEEE. In addition the directive provides minimum combined targets for re-using components and recycling and minimum recovery targets.

What is Restriction of Hazardous Substances (ROHS)

The Restriction of Hazardous Substances Directive (RoHS), which bans the use of certain hazardous substances (such as lead, mercury, cadmium, hexavalent chromium and some polybrominated flame-retardants) in EEE. RoHS allows possible exemptions.

WEEE Objective

The prevention of waste electrical and electronic equipment (WEEE), and in addition, the reuse, recycling and other forms of recovery of such wastes so as to reduce the disposal of waste. It also seeks  to improve the environmental performance of all operators involved in the life cycle of electrical and electronic equipment

WEEE Collection

Main Points

a) Systems have to be set up so that Final holders and Distributors are able to return such waste at least free of charge

b) When supplying a new product, distributors shall be responsible for ensuring that such waste can be returned to
the distributor at least free of charge

c) Producers  are allowed to set up and operate individual and/or collective take-back systems for WEEE from private households

d) Member States shall ensure that all WEEE collected  is transported to treatment facilities

The Commission proposes to set mandatory collection targets equal to 65% of the average weight of electrical and electronic equipment placed on the market over the two previous years in each Member State. The recycling and recovery targets of such equipment would cover the re-use of whole appliances and weight-base targets would increase by 5%. Targets are proposed also for the recovery of medical devices.

WEEE Success/Failure and Need for Revision

Despite Rules on Electronics collection and recycling  approximately a third of waste electrical and electronic equipment (33%) is reported to be treated according to the legislation. The rest goes to landfills (13%) and potentially to sub-standard treatment inside or outside the EU (54%). Illegal trade to non-EU countries is still widespread. The collection target of 4 kg per person per year does not reflect the amount of WEEE arising in individual Member States.

WEEE Revision

The European Commission has published its legislative proposal for the review of the WEEE Directive on December 3rd, 2008. The proposal will be debated and amended in a political legislative procedure by the European Parliament and EU Member States governments.New rules will probably not take effect until 2011-2012. Significant changes such as a broader scope, the introduction of CE marking requirements and new bans on substances could be made during this procedure.

Which changes does the Commission propose?

  • harmonise the registration and reporting obligations for producers and make national registers of producers inter-operational so that producers need only register and report in one Member State for all their activities in the EU. This is expected to lead to potential savings of €60 million;
  • clarify the scope and definitions;
  • change the collection target from the current 4kg/capita per year ("one size fits all") to a variable target that takes into account the economies of individual member States. The new target is set at 65% of the average weight of products placed on the market in the two preceding years. Although many Member States have already reached this target it becomes binding in 2016, thus giving other Member States time to adjust;
  • a combined recycling and re-use target which is socially and environmentally viable that will sort out current deterrents to re-using;
  • enhance environmental benefits and material savings by including recovery and recycling/re-use targets for medical devices;
  • set minimum inspection requirements for Member States to strengthen the enforcement of the directive and include minimum monitoring requirements for shipping WEEE;
  • make Member States, where appropriate, encourage producers to finance all the costs of separate collection;
  • allow producers to show to consumers at the time of sale the cost of collection, treatment and disposal of products in an environmentally-sound manner, without time limitation and for all equipments. This is in line with the principles of sustainable consumption and production and ensures that consumers can make informed purchasing choices.

What overall improvements are expected?

  • Significantly reduce the administrative burden to producers without lowering the level of environmental protection;
  • Enhance effectiveness of the directive through simplified and improved implementation;
  • Reduce the environmental impacts of collection, treatment and recovery of WEEE at levels providing the greatest benefit to society.

WEEE Categories of Electrical and Electronic Equipment

1. Large household appliances
2. Small household appliances
3. IT and telecommunications equipment
4. Consumer equipment
5. Lighting equipment
6. Electrical and electronic tools (with the exception of large-scale stationary industrial tools)
7. Toys, leisure and sports equipment
8. Medical devices (with the exception of all implanted and infected products)
9. Monitoring and control instruments
10. Automatic dispensers

Sources and Further Reading

  1. http://epp.eurostat.ec.europa.eu/portal/page/portal/waste/data/wastestreams/weee
  2. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32002L0095:EN:NOT
  3. http://www.buyusa.gov/europeanunion/weee.html
  4. http://ec.europa.eu/environment/waste/weee/index_en.htm
  5. http://www.buyusa.gov/europeanunion/weee_info.html
  6. http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/764&format=HTML&aged=0&language=EN&guiLanguage=en

Renewable Energy in Poland (Wind,Biomass) in Brief – Increasing with Huge Prospects due to 90% Dependence on Coal

12 May, 2011
Biomass Energy,Coal,Offshore Wind,Renewable Energy,Wind Energy

Poland resiting EU mandate to shift from Dirty Coal to Green Energy Sources

Poland is one of the largest countries in Europe to have such a high dependence on Coal Energy to meet its Electricity Needs.Note European Union has a target to meet 20% of its Energy by 2020 from Renewable Energy sources which has mad the fossil fuel dependent Eastern European countries looks towards Wind,Solar and Biomass Energy.Note Eastern European countries like Romania have seen a boom in wind energy driven by incorrect Green Energy subsidy policies while the Solar Boom in Czech led to a drastic increase in electricity prices forcing the government to Bust it with a combination of FIT cuts,tax increases and strict regulation.Poland which is the largest Eastern European country in the EU has traditionally depended on Coal to meet most of its Energy Needs.Despite the major disadvantages of Coal,Poland has resisted reducing the support given to the Thermal Power Industry.The cheapness and abundance of Coal has made it hard for Poland to shift its Energy Policy like other Coal dependent nations like South Africa,China and India.

Poland Renewable Energy Target

Poland  has established a target of 7.5 percent of energy production from renewable sources by 2010, and 15% by 2020.  However, these targets have not yet been enforced, discouraging large scale renewable development.  Even so, the aggressive targets combined with strong economic growth provide a healthy investment atmosphere for renewable energy developers.   Utilities are required to purchase electricity from renewable sources, although prices are not regulated by tariffs.The Energy Act of April 2007 states that all energy companies selling electricity to end users have to obtain and present a specified number of renewable energy certificates or pay a substitution charge.

Solid biomass had the highest share in renewable energy production in 2008. It amounted to nearly 87% of the total domestic production of energy from renewable sources. Liquid biofuels were the next largest carrier in primary energy production from renewable sources (5.4%), followed by water (3.4%), biogas (2.4%) and wind (1.3%). Heat pumps, geothermal energy, solar radiation and energy from municipal waste were less significant in the total balance.

Renewable Energy in Poland Increasing with Wind and Biomass Energy

Biomass and wind appear to be the most promising renewable energy resources for development in Poland, with an estimated potential of about 4,000 MW each.

Wind Energy in Poland

Poland also has some of the best documented wind resources in Central and Eastern Europe with areas reaching up to 1,000 W/m2 in power density. Poland has started to increase its Renewable Energy Industry with 460 MW of Wind Energy installed in 2010 .Poland is set to install around 500 MW of Wind Energy this Year.Poland had 1,005 MW of installed capacity for wind-generated power in the middle of 2010.

The Polish Wind Energy Association predicts very dynamic growth of installed capacity in the wind power sector, amounting to about 13 GW in 20203). The figure comprises almost 11 GW of onshore wind farms, 1.5 GW in offshore wind and 600 MW of small wind.

Biomass Energy in Poland

Thermal Power Plant are being  converted into a Biomass Power Plants because Biomass Energy has a number of advantages over Coal Energy.Both liquid and solid biomass are considered to be the main sources of renewable energy in Poland, for both electricity and thermal energy production.  Currently, biomass is mainly used as heat in small and medium scale boilers in industrial settings. Common fuel is wood pieces, sawdust, and wood shavings. Combined heat and power (CHP) plants using organic waste from pulp and paper operations, and straw and wood fired heating plants are also in operation.

The amount of electricity generated from biomass between 2006 and 2008 increased nearly twofold – from 1818 GWh to 3267 GWh. A large part of it was generated in co-combustion processes (84% in 2008). Also the amount of electricity produced from biogas increased almost twice during the three analysed years, from 117 GWh in 2006 to 221 GWh in 2008. Over half of this was generated from landfill biogas (63% in 2008), one third from biogas produced in sewage treatment facilities and the remaining small part was generated in the agricultural sector (4% in 2008).

French energy company GDF-Suez plans to convert a 225 MW Coal powered Plant will be converted into a biomass powered plant making it one of the biggest biomass plants in the world,The 205 MW Biomass power plant in Polaniec, south-eastern Poland will use about 1 million tonnes of biomass a year.GDF is also interested in purchasing assets from Sweden’s Vattenfall. The latter company intends to leave the Polish market by selling its major holdings there.Poland’s second-largest utility, Tauron, has taken a z?.30 million loan to help it finance the conversion of its coal-fired power plant in Tychy so that it can burn biomass instead.Note Pure Play Biomass Companies are difficult to invest in as Biomass Power Plants are built by the utilities.

Electricity in Poland

Polish power generation system is the largest in Central and Eastern Europe in terms of capacity.Poland has around 3 GW of Total Electricity Capacity with 90% coming form Thermal Power .It also has around 2 GW of Renewable Energy Capacity. Household electricity prices have increased by 32% since 2004, but they remain about 14% below the EU-15 and  EU-25 averages. Prices for industrial customers are about 28% below the European averages The power system is very fragmented, with nearly 400 power plants.Solar and Hydro Energy Resources in not well developed in Poland though a few companies have started to manufacture solar energy products in the country.

More Links on Poland Energy

1) http://www.elektrownie-wiatrowe.org.pl/en/

2) http://en.wikipedia.org/wiki/Wind_power_in_Poland

3) http://www.enercee.net/poland/energy-sources.html

4) http://www.sourcewatch.org/index.php?title=Poland_and_coal

5) http://www.iea.org/stats/electricitydata.asp?COUNTRY_CODE=PL

Why did it take Spain 3 years to stops/changes subsidies to Solar Power Plants getting Feed in Tariff through Fraud

15 Apr, 2011
Solar Energy,Spain

Spain has started cracking down on Solar Power Plants which are making huge profits through illegal Feed in Tariffs which they should not get.Note Spain had seen a massive boom in solar installations in 2008 due to unusually large ROI driven by high Feed in Tariffs.FIT are electricity rates which are higher than wholesale electricity rates paid to renewable energy power plants in order to make them competitive with cheaper fossil fuel power plants.Seeing a huge increase in the subsidy burden Spain has pretty much killed the solar market in 2009,however the problems of Fiscal Deficit has made Spain reconsider the tariffs being given to even older solar power plants.After a lot of controversy,Spain changed the FIT rules in the middle of the game through a retroactive FIT Law drawing howls of protest from solar investors like pension funds which have sued the government.

Spain is now also pursuing the solar industry by cracking down on power plants which connected after 2008 but got the FIT for 2008 power plants.Almost 304 solar power plants have been deemed illegal.Spain is reviewing the all the 9000 plants and till now almost 30% of the plants being reviewed have had their subsidies stopped or FIT changed.Don’t know why it took Spain 3 years to crack down on subsidy fraud when everyone knew that massive solar fraud had taken place during the boom as everyone rushed to put up a solar power plant during the solar gold rush.

Spain watchdog halts premiums for 304 solar plants

Spain’s energy watchdog ruled on Thursday to provisionally suspend paying premiums to 304 solar plants which failed to show they were up and running before subsidies were capped in 2008.

The National Energy Commission (CNE) recalled in a statement that it had provisionally suspended another 347 solar plants on March 29.Last year the CNE began investigating 9,041 photovoltaic plants, of which 840 have waived a premium of 475 euros ($683.9) per megawatt-hour and accepted one of 326 euros/MWh.Spain’s benchmark wholesale power market price on Thursday was 44.43 euros/MWh.Of the remainder, 2,021 plants have been examined and 651 suspended. The government has the final say on suspensions.

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