USA | Green World Investor

Google,Good Energies look to Realize part of 4000 GW US Offshore Wind Energy Potential through Offshore Underground Electricity Transmission

13 Oct, 2010

Offshore Wind,Smart Grid,USA,Wind Energy

Google has been making green investments in all sorts of Green Sectors in its quest to help Renewable Energy become cheaper tha n the price of Coal.It earlier investment in a Wind Farm was quite perplexing as it did not contribute much to the Green Cause.Now it is looking to take a 35% equity stake in a $5 Billion Offshore Underground Electricity Transmission Line on the Atlantic Coast which would link 4 US States.This Transmission line would also get equity contribution from European Green Fund Good Energies.Note Good Energies is one of the biggest and earliest investors in Green Technology.It was the founder member of the first pure play large Solar Companies Q-Cells and Renewable Energy Corporation (REC).Like Google,Good Energies is a somewhat in between a non-profit and profit company.Good Energies recently sold off its stake in Chinese Solar Company to South Korean Chaebol Hanwha so it is flush with cash.

Google’s Reicher Aims at Another Fledgling Industry: Wind Farms – Bloomberg

The company said yesterday that it’s investing in a $5 billion underwater network that can channel electricity from wind turbines scattered off the Atlantic coast, enough to light up 1.9 million homes from New York to Virginia.

Under the new project, Google will buy a 37.5 percent stake in the development stage of the Atlantic Wind Connection project, said Rick Needham, director of green business operations at Mountain View, California-based Google. The new transmission line would form the “backbone” of an offshore wind industry that could add 6,000 megawatts of capacity to the grid. That’s as much as about five nuclear plants.

The first phase of the project, which the developers aim to complete by early 2016, would run about 150 miles and cost $1.7 billion to $1.8 billion, Needham said. The second phase to complete the 350-mile (563 kilometers) line could be finished by 2020.

US Offshore Wind is currently Stalled even as it rides a Tailwind in Europe and Asia

The Transmission Line will give a huge boost to Offshore WInd Energy in the United States.The Government has estimated a 4000 GW Offshore Wind Potential which is almost 4 times bigger than the current 1000 GW Electricity Generating Capacity . However note the load factors for wind is usually 1/4th to 1/3rd that of normal Fossil Fuel Energy so it would be incorrect to say that Offshore Wind could generate 4 times the current US Electricity like some websites are doing.However this is not to takeaway from the fact that this will help wind energy and green jobs considerably.US is seriously lagging behind countries like China and South Korea in the upcoming Green Industry.Lack of US Climate Legislation and indifferent individuals and companies are creating massive roadblocks in Climate Mitigation.Transmission Costs are a big hurdle for Offshore as well as Onshore Wind Energy.Note the bigger the consumer area for Renewable Energy the less the adverse affects of intermittent.The Tres Amigas Transmission SuperHub is another example of Private Initiative in the Electricity Transmission Area.While the dollar benefits to the investing companies might be uncertain,the Green Benefits of this move are immense.The US Electricity Regulator has already given a thumbs up and the US Administration also seems very supportive recently approving the Cape Wind Offshore Wind Farm in Federal Waters in Nanuteck Sound.

US offshore wind capacity could top 4000 GW, says report – Energy Efficiency

The US total potential offshore wind energy resource could top 4000 GW, according to a new analysis by the Department of Energy’s National Renewable Energy Laboratory (NREL).

Exploiting the country’s offshore wind potential could help it reach 20% of electricity generation – or around 54 GW – and revitalise its manufacturing sector to the tune of $200 billion.The report says that the 26 states along the US coast – including the Great Lakes, where there are large urban areas, could provide very favourable conditions for offshore wind generation.

The US, while one of the world’s leaders in land-based wind generation, has no offshore wind capacity at all, although the country’s first facility, the controversial Cape Wind project, has been given the go ahead.

Mitsubishi Heavy Industries looks to overseas Wind Markets for Growth

17 Jul, 2010

GE,Japan,USA,Wind Energy

Mitsubishi Heavy Industries , the massive Japanese Conglomerate is looking to overseas market for growing its Wind Energy Division.Mitsubishi like other Japanese companies are looking towards Green Industry for growth.Japan already possesses solid strengths in this area with its traditional focus on resource efficiency.While companies like Panansonic and Toyotal looks towards Electric Vehicles and Batteries,Sharp and Kyocera towards Wind Energy,Mitsubishi is focusing its energy on the Wind Sector.

Mitsubishi runs into GE while expanding into the lucrative US market

Mitsubishi is looking to open a massive wind turbine factory in Arkansas ,USA to target the lucrative US market which was the second biggest in 2009.However it is running into stiff opposition from US Wind Energy Leader General Electric which is using the patent lawsuit route to try and block Mitsubishi.GE filed a case in 2008 with the ITC to thward Mitsubishi from selling Wind Turbines in the US,which it lost in 2010.After having failed at the International Trade Commission (ITC),GE filed a civil lawsuit case in Dallas.Mitsubishi filed a counter lawsuit accusing GE of anti trust motives which seems to make sense .Note GE is the market leader in the US with more than a 40% marketshare,however it is facing stiff competition from European competitors Siemens and Vestas .Its a matter of time before cheap Chinese wind turbine producers Goldwind and Sinovel also make a strong push into the US market .

GE-Mitsubishi Wind-Turbine Fight Threatens Arkansas – Bloomberg

The plan may be delayed if the U.S. International Trade Commission, an agency set up to protect U.S. markets from unfair trade practices, sides with GE in a patent battle and bans Mitsubishi turbines from the U.S. market. The agency, which was scheduled to announce a decision today, will now decide by Jan. 8, it said in a notice posted on its Web site. It gave no reason for the delay.GE, the biggest U.S. wind-turbine maker, claims Mitsubishi infringes its patents. If it wins, the Fairfield, Connecticut- based company might prevent Tokyo-based Mitsubishi from increasing its share of the U.S. wind-turbine market, now dominated by GE and Denmark’s Vestas Wind Systems A/S.Wind turbines accounted for 42 percent of new electricity- generating capacity in the U.S. last year, almost matching the additions of natural gas-fueled plants, according to the American Wind Energy Association, an industry trade group.

Mitsubishi looking to partner in the UK Market

The United Kingdom has a very aggressive expansion plan in the offshore Wind Energy sector with almost 30 GW of planned capacity in the North Sea.Mitsubishi probably learning fomr the US experience , plans to partner a local entity while making an entry here.It will tie up with Scottish and Southern Energy to supply 5-7 MW turbines for the UK.Note Scottish and Souther Energy is one of the companies chosen for building offshore wind farms.

Mitsubishi Heavy, UK firm to make wind turbines-Nikkei

Mitsubishi Heavy Industries Ltd said it will tie up with Scottish and Southern Energy Plc to develop turbines for an offshore wind power project in the United Kingdom, the Nikkei business daily reported.The UK government project will add 32 gigawatts, roughly the output of 30 nuclear power plants, to the country’s power generation capacity by 2020, the paper said.

US Solar Energy policies seem misguided as Obama visits Solyndra which looks to be Billion Dollar Failure

28 May, 2010

First Solar,Green IPO,Solar Energy,Sunpower,Technology,USA

Solyndra has been the most hyped startup in the crowded Solar Energy field .It is not due to a lack of competition,another thin film player Nanosolar has been in the news with heavyweights like Google,Carlye and EDF backing it.Then there are other startups like eSolar, Brightsource Energy,Miasole which promise to drastically improve the adoption of solar energy.But Solyndra has been singularly successful in marketing itself as the solar startup to watch out for, filing a prospectus do an IPO in 2010.It has received more than a Billion Dollars in Equity funding from its PE investors and Millions of Dollars in Loan Guarantees from the US government through Department of Energy (DOE).These huge amount of dollars are going to be a huge waste IMHO

Solyndra’s Scale is too Small

Solyndra’s Capacity will be 85 MW by end 2010 and 500 MW by end 2013 .Compare this to the Gigawatt scale capacity being built up by many of the Chinese,European ,Japanese and Taiwanese players in 2010 itself.By 2013 , Solyndra will not even rank in the top 20 of world’s top suppliers . Leading Companies like Trina Solar , First Solar ,LDK will already have a capacity of more than 2 GW by 2011

Solyndra’s capex per Watt is too high

Solyndra’s 500 MW plant will require $1.38 billion to be built according to its S-1 filing .This works out to be more than $2.5/watt ,compare this to $1/watt capex required by First Solar to build a similar plant.Even crystalline solar plants which have much higher efficiency require almost half the capex dollars to build a similar size capacity

Solyndra’s Huge Accumulated Losses

Solyndra has accumulated more than$500 million in deficit making even its Auditor PWC has questioned its survival as a Going Concern

Solyndra’s products are not Cost Competetive

Solyndra’s S-1 filing with the SEC shows that its cost structure is too high compared to the mainstream crystalline solar energy technology.Its costs are also much more than the Cadmium Tellerium (Cd-Te) technology used by solar energy market leader First Solar . Solyndra’s cost per watt is currently more than $4/watt ,compare that to Trina Solar which has a cost per watt of $1.1/watt at much higher efficiencies.It would take a major miracle to reduce this vast cost gap.

US solar energy policies are misguided

Existing US Solar companies with state of the art technology like Evergreen Solar,Energy Conversion Devices and Sunpower are barely surviving due to lack of US govt support while President Obama is visiting a fledgling startup.Evergreen Solar lamented the lack of US govt support as it moved its manufacturing operations lock stock and barrel to China.Sunpower is constructing its next big Fab in Malaysia in partnership with AUO while Energy Conversion Devices is running at 50% utilization .Its questionable why DOE is giving a $535 million loan to Solyndra and not to these companies with proven technologies and plants.Note China is giving huge subsidies to its solar companies in the form of billion dollar credit lines,electricity subsidies and even taking equity stakes.These incentives have made the China capture 50% of the world market from less than 5% in 2005.US needs to show similar commitment to its solar companies to regain its lost leadership in the clean energy race.

Wind Energy in US hits an Air Pocket in 2010 due to Low Gas Prices and Federal apathy

28 May, 2010

Gas,GE,Renewable Energy,Siemens,Suzlon,USA,Vestas

Wind Energy in 2010 has ground to a halt in the US after a record 10,000 MW were installed in 2009.The ARRA grants in 2009 which gave a 30% cash grant for wind farm development plus the 2008 pushed out orders led to a path breaking 2009 for Wind Energy in the US .Almost 30% of the total installed capacity in the US was constructed in 2009 alone.Wind Energy accounts for roughly 39 GW of electricity capacity in the US or roughly 4% . The major reason for the slowdown has been Gas prices which were ruling at $8/BTU at the peak have crashed down to $4.2/BTU making Gas based Power much cheaper .Wind Energy is one of the cheapest forms of Renewable Energy at around 8-10c/KwH.However , it has been tough for Wind Farm developers to sign Power Purchase Agreements (PPAs) with utilities given that electricity demand has contracted in the US . Wind Energy has hit a perfect Storm driven by a confluence of negative factors.Total Wind Energy Capacity declined by a whopping 80% y/y in first quarter of 2010 compared to the first quarter of 2009.The factors contributing to this decline are

Decline in Electricity Demand in the US for the first time in 50 years due the Economic Crisis
25% Decline in Gas Prices making Gas based power generation cheaper in comparison to Wind power
Lack of a National Renewable Energy Standard (RES) which mandates a certain percentage of electricity generation done through Cleaner Energy at the federal level

US losing the Clean Energy Race to China

US lags far behind in Wind Energy equipment production with only General Electric(GE) being the only US manufacture in the top 10 rankings.A slowdown in the home market will make it even tougher for US companies to compete with Chinese suppliers which are looking to expand outside.The Government has been tardy about passing a Climate Bill which would give a boost to Renewable Energy.China on the other hand is looking to dominate Wind Energy just like it is currently dominating Solar Energy.

US Turbine Producers face a Bleak 2010

The US Wind Energy Turbine Manufacturers have been pushing for a RES at the federal level as wind farms require long term financing which in turn requires policy stability.With 30% Cash Grants expiring this year and no Federal Push on the Energy and Climate issues , its tough for Wind Farm developers to get financing.Suzlon, Gamesa, Vestas and GE which have large US factories will have to run theirFactories at low utilization levels waiting for a friendly Green policy.

Electric Vehicles -Four Weddings and a Divorce as Auto Heavyweights jostle for position

27 May, 2010

China,Electric Vehicles,Oil,Renewable Energy,USA

Electric Vehicles is becoming the most active segment of the Green Industry in recent times with Alliances,Acquisitions as well as Breakups . Global Auto Heavyweights along with numerous small startups like Fisker,Coda,Tesla are jostling for position in this new “Hot segment” of the Auto industry.The past few months have seen furious activity with a mish-mash of tie-ups and stake sales among these companies.

Four Weddings and a Divorce

Tesla got a $50 million cash infusion from Toyota alongwith an unused plant.Tesla which is planning to launch an EV Sedan, already has an existing tie up with Daimler which bought an equity stake earlier.Daimler is also tying up with Chinese EV giant BYD auto to start a 50:50 JV to produce Electric Vehicles in China . BMW is already working with Brilliance China Automotive to produce Electric Vehicles in China by 2013.Honda and Coda Automotive are also looking to China for Battery Technology to fuel their Electric Vehicle ambitions.Indian utility vehicle maker Mahindra bought a majority stake in small EV producer Reva.General Motors which had a technology tie-up with Reva to produce Electric Vehicles in India canceled its tie-up and will now go it alone.Not to be outdone , Battery Technology is also seeing Increased Competition with Battery makers tying up with Electric Vehicle Producers.

GM to develop electric car in U.S.; ends Reva tie-up – Reuters

General Motors will develop electric car technology for the Indian market in its home town of Detroit, after ending a partnership with Indian firm Reva, the head of its operations in the country said.GM India, which had originally planned to launch an electric version of the Chevrolet Spark, will now offer the hybrid electric vehicle Chevrolet Volt in the fourth quarter of 2010, after its global launch in November, Karl Slym said.

India’s Reva had entered into an agreement with General Motors India last year to develop electric cars in the country, including an electric version of the Chevrolet Spark.”Now with Reva changing its ownership we saw no particular value in doing this experiment,” Slym said.Slym said the decision to end the agreement with Reva was taken around two months ago as GM had a parallel program to develop electric vehicles globally.

Buffett’s BYD, Daimler Set Up Electric-Car Venture – Reuters

Daimler, the world’s second-biggest manufacturer of luxury cars, and BYD will invest 600 million yuan ($88 million) in the 50-50 partnership in China, the Stuttgart, Germany-based carmaker said in an e-mailed statement today.

Part-owned by Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc., BYD entered the automobile market in 2003 and began mass production of the world’s first plug-in, gasoline- electric hybrid vehicle five years later. The manufacturer, which is also owned by China’s richest man Wang Chuanfu, markets the popular F3 compact, China’s best-selling car last year.BYD plans to start selling the E6 electric car in the U.S. this year and in Europe next year. The company said on May 20 that it has an agreement to deliver at least 560 E6s to a taxi operator in Shenzhen in 2010, with 40 of the cars already in use as taxis in the city, as part of an effort to encourage individual purchases. The company signed an agreement with Volkswagen AG in 2009 to explore cooperation in areas including hybrid cars and lithium-battery electric models.

Role Reversal – US Utility Duke Energy acknowledges China’s Clean Technology Leadership

23 May, 2010

China,Climate Change,Renewable Energy,Smart Grid,USA

The US Government needs a Reality Check about who is leading the world in Clean Energy.While the US Commerce Secretary thinks that the US might lose the clean energy leadership to China , I think they might already have lost it. The following US utility Duke Energy statement seems to corroborate my opinion.

“China is going to set the standard for development and deployment of clean energy,” David Mohler, a senior vice president at Duke, said in an interview May 21 in Beijing. Mohler was among representatives from 24 companies who joined Commerce Secretary Gary Locke on a trade mission to China last week in a bid to increase trade in clean-energy technologies.

Duke Energy Corp. is scouting for new clean-energy technologies in China after President Barack Obama’s bid to pass U.S. legislation curbing carbon emissions stalled, the company’s chief technology officer said.

Note Duke Energy was one of the participants in the US delegation to China which went there to persuade the Chinese to open up to US investment in clean energy.Ironically it is Duke Energy that is now looking for Chinese technology in the Clean Energy area.What a dramatic Role Reversal !!!!!! China is already a leader in solar and may dominate wind as well.

US laggard on climate change issues

The US has been procrastinating on a climate change bill for a long time and was one of the main actors behind the failure of a global deal on climate change mitigation and global warming.The US Senate is busy playing petty political games while US companies are looking at China for Green Technology.Duke Energy which has 70% of its power being generated by the dirtiest form of energy cannot afford to wait for the climate bill indefinitely while the rest of the world progresses rapidly .Unless US gets its act together soon , it would be left too far behind to come back in green industry

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