Renewable Energy Certificate (REC) Policy is starting in India tomorrow which will allow Green Energy Generators to earn additional tariff.Note the REC Mechanism is also present in different forms in Italy,USA and Australia and has proven a good incentive to promoter Renewable Energy in those countries.India’s Electricity Regulator (CERC) has been actively implementing different orders to boost Green Energy Generation.CERC had earlier mandated a 6% Renewable Energy Percentage from Alternative Energy which would go upto 15% by 2020.The REC Policy will help in achieving those targets by providing a pseud market linked mechanism to inentivize Green Power Producers.
Who will Benefit
Renewable Energy Companies and Green Utilities are set to benefit the most from this Policy.Suzlon has already welcomed the policy saying that Financing will ease for Renewable Energy Projects.Orient Green Power,the largest Green Focused Utility will also be a big beneficiary.Local Indian Wind Turbine Companies should also benefit from the Scheme.It also provides companies outside the JNNSM to get decent returns from solar generation as the REC band for Solar REC has been set between Rs 12-17/Kwh.India need to increase Renewable Energy Capacity by at least 50 GW in the next 10 year to meet the 15% CERC Target
Giant Chinese Utilities Datang and Huaneng are doing roadshows for the IPOs of their Renewable Energy Arms which would raise more than Billion Dollars Each.Note Green Utilities have become a separate Green Investment Class with lots of Asian and European Utilities already doing an IPO of their Green Subsidiaries or are in the process of doing so.However 2010 has been a bad year for Green Energy Stocks and Green Utilities have been no different.While First Wind Holdings a pure play USA Wind Farm Developer failed to get listed despite lowering its Issue Price,Indian Orient Green Power and Italian Enel Green Power have performed miserably even after listing at a much lowered stock price.Despite the negative sentiment towards Green Utilities mainly due to the Headwinds being faced by Wind Industry in 2010,Green Utilities are one of the safest ways to invest in the Alternative Energy Sector given the nascent highly volatile nature of the industry.
Green Buildings are a huge multibillion dollar industry but from an investor’s point of view the information and investment avenues about this very important Green Sector remains surprisingly scare.Most of the investment options in Green Buildings remains confined to huge conglomerates like Johnson Controls,Honeywell,Schnieder Electric,Siemens and a few small startups like Serious Materials.Most of the information about Green Buildings can be gleaned from the US Green Buidling Council and EPA.Interest in Green Buildings started in the 1970s and still remains a niche concept despite huge strides in the 21st Century.Certifications like LEED has brought awareness about Green Buildings but they still occupy a remote corner in the Green Investor’s mind.In the Green Building Series,I will try to explain the concept of Green Buildings.For a start here is the Definition of a Green Building also known as a Sustainable Building.
Siemens has planned to increase its Environmental Revenues to Euro 40 Billions by 2014 which is quite a big jump considering the large base.GE is its biggest competitor which is also rapidly increasing investment and research into Renewable Energy.Areva,ABB,Samsung,LG,Hyundai,Toshiba,Sharp,Panasonic,Mitsubishi are other industrial giants looking to rapidly increase revenue from Clean Technology.Siemens has a definite technological and incumbent advantages however the competition is quite formidable.Siemens has made important wins recently in the field of high speed railways,new generation high voltage DC electricity transmission,offshore wind etc.But it lacks size and scale in the fields of nuclear and solar energy and has little presence in the area of Energy Storage as well.While Siemens has bought Soliel in the Solar Thermal field,it lacks a Solar PV product portfolio.Siemens however remains a good long term safe green investment in a volatile cleantech sector.
Solar Energy Future Growth has been vastly underestimated by policy makers and analysts but private companies are recognized the huge potential.India’s JNNSM Policy which is meant to jumpstart India’s Solar Energy has drawn huge interest from both domestic and foreign companies.The number of Solar Companies in India are growing at a rapid pace attracted by the huge opportunity.While starting troubles like project financing of debt etc are present,the long term growth potential of Solar Energy in India is tremendous.Global Industrial Giants like GE,Siemens have already established or in the process of investing huge sums of money to capitalize on this Green Trend.Now French Giant Areva has joined them.Note Areva is the global leader in nuclear equipment technology and is not known for its prowess in Solar and Wind Energy.However the company is making a play in Solar Thermal Technology where it hopes to use its existing skills and knowledge.Areva had acquired US startup Ausra which had fallen on hard times earlier.However Areva has not won too many Solar Thermal Projects in the recent past.However things may change starting with India
Solar PV Technology have made a huge advance in the last 2-3 years leading to a demand explosion with more than 100% growth forecast this year.Crystalline PV Technology as well as Thin Film Technology like CIGs and CdTe have reduced their costs drastically.While Solar PV still requires generous government subsidies for their growth,grid parity has come very close.Solar PV Technology has become economically competitive in parts of Italy where a unique combination of high electricity rates and sunshine have made Solar PV Technology very attractive.Costs are being reduced at more than 10% per year which would make Solar PV competitive in 2-3 years in most parts of the world.However mainstream and reputed forecasters and companies like Boston Consulting Group remain blind and ignorant to this.BCG in a recent report has said that biofuels and Concentrated Solar Thermal (CSP) Technology will become competitive.I have issues with both of these technologies.