China Putting Brakes on Green IPOs as some Green sectors face overcapacity

9 Jun, 2010
China,Goldwind,Green IPO,Renewable Energy,Solar Energy,Wind Energy

China has put on hold new IPO’s from its fast growing Green Industry to prevent overcapacity and weed out small players.Though Goldwind (China’s second largest wind turbine producer) has received approval for the Biggest Green IPO in 2010 in HongKong later this month,others are facing hurdles.While no official communication has been released,Reuters reported that the “Go Slow” on Green IPOs had been sent to investment bankers and industry executives.China has been trying to slow down the overcapacity plaguing some Green sectors like Wind Equipment and Polysilicon.The number of players in the Wind Equipment has risen to almost 60 many of which are Small and run on paper thin margins.Same is the case with the PolySilicon sector which has many Entrants running small,uneconomic and environmentally unfriendly plants.

Prevention of capital raising for these cash strapped players will lead to consolidation and benefit the larger companies like Sinovel,Goldwind ,LDK and GCL Poly.This also goes along with China’s strategy of becoming a Clean Technology Leader through home grown World Class Green Technology Champions.

China freezes some renewable energy IPOs: sources – Reuters

Chinese regulators have ordered a freeze on some initial public share offerings in the renewable energy sector, amid fears that overcapacity will weigh on the rapidly growing industry.The government has made no official statement on the freeze, but sources with direct knowledge of the matter said the message had been communicated to executives and investment bankers looking to bring wind or solar power companies to the market.”The government hasn’t said so publicly, but certain sectors including polysilicon and wind are forbidden from hitting the primary IPO market,” said a source familiar with the situation.”They’re holding approval for certain IPOs because of overcapacity concerns.”China Securities Regulatory Committee officials could not be reached for comment. The sources declined to be named because of the sensitivity of the issue.

Clean technology IPOs in China totaled $2.2 billion so far this year against $2.4 billion for the whole of 2009, according to Thomson Reuters data.A freeze on initial public offerings is China’s latest attempt to curtail expansion in an industry that has many small domestic players yet is controlled by just a few.

Masdar tries Solar Thermal Technology as Thin Film Division faces trouble;To Build a CSP plant “Shams 1″ with Abengoa and Total

9 Jun, 2010
Abengoa,Applied Materials,Concentrated Solar Thermal,Masdar,Oil,Saudi Arabia

Masdar’s Amorphous Silicon Division in Trouble

Masdar, Abu Dhabi owned Green Company plans to build a  Solar Thermal plant called “Shams 1″ near Abu Dhabi. Masdar PV has been in the news recently with the Dismissal of its top executives as its German Thin Film plant is facing trouble.Masdar PV sourced technology and equipment from Applied Material’s Thin Film Division which is struggling to survive against the onslaught of Crystalline Silicon (c-Si) competition.Applied Materials has drastically reduced support to its “SunFab” amorphous Silicon (a-Si) thin film technology with 90% drop in Poly Silicon prices making a-Si technology uncompetitive.Q-Cells and Suntech,two major customers of Applied Material’s SunFab product have already written off their investment.With these two Solar Stalwarts failing to make a-Si products viable,it is highly unlikely that Masdar PV will get much success from this venture.

Masdar partners with Abengoa and Total in Solar Thermal Plant

With Thin Film not getting much success , Masdar PV is apparently changing its strategy by building a 100 MW CSP plant near Abu Dhabi with Abengoa and Total as minority partners.Abengoa is a world leader in Solar Thermal Technology with considerable  experience in building and operating big solar plants in US and Spain.The role of France’s Oil Giant Total is not totally clear except the that company has some project experience in Solar Installations through its subsidiary Tenesol.Super Rich Abu Dhabi has been trying to make major investments in Renewable Energy through big bang projects like the worlds first carbon neutral city “Masdar”.Other countries in the Middle East like Saudi Arabia have also shown interest in establishing Solar Plants given the favorable solar conditions of the region.

Abengoa, Masdar to Build Biggest Mideast Solar Plant – Bloomberg

Abengoa SA of Spain joined Total SA and Abu Dhabi’s renewable energy company, Masdar, in building the Middle East’s first major solar power plant.The project, named Shams 1, will cost $500 million to $700 million and generate about 100 megawatts of power in Madinat Zayed, about 120 kilometers southwest of the U.A.E. capital city. Total and Abengoa each will own 20 percent of the project, with Masdar controlling 60 percent, according to a statement.

Shares in Seville, Spain-based Abengoa rose as much as 10 percent and traded at 14.46 euros, up 8.2 percent, at 2:25 local time.Abu Dhabi, holder of almost all the oil reserves in the United Arab Emirates, aims to position itself as a hub for renewable energy by building the world’s first zero-carbon city and hosting the headquarters of the International Renewable Energy Agency.Masdar already has a 10 megawatt photovoltaic, or PV, plant in Abu Dhabi. PV plants use solar panels, which convert sunlight directly to electricity. Concentrated solar reflects sunlight, usually with mirrors to heat liquids that generate power with steam turbines.

Is the Green Investing Opportunity in Pumped Hydro Storage being overlooked

7 Jun, 2010
Solar Energy,Wind Energy

Pumped Hydro Storage Introduction

Pumped Hydro Storage along with Compressed Air Energy Storage (CAES) are the less glamorous cousins of Energy Storage Approaches like Lithium Batteries,Flywheels and Capacitors .The Green Investing Limelight has been firmly taken over by startups like A123 Systems which have failed to perform to their initial hype.Pumped Hydro Storage on the other hand is already extensively used by Power Companies to store low cost electricity during off peak hours and then used during peak times to supply the high demand.There is 90 GW of Global Pumped Hydro Storage already existing in the world and with increasing Solar and Wind Energy  this Capacity is only going to grow.The main use of Pumped Hydro Storage is for Grid Energy Storage rather than Energy Storage for Automobiles and Electronic Products.The Electric Utilities are the main customers of this Technology using Pumped Hydro Storage for

  1. Load Balancing – Storing Power during Low Usage Periods and Generating Power at High Usage Periods
  2. Accommodation of Intermittent Sources of  Energy – Solar Energy and Wind Energy are  growing at a scorchingly fast rate of 50% and 30% CAGR over the last several years.Larger share of these forms of renewable energyin the Electricity Mix is driving the growth Grid Storage.
  3. Reducing Capital Investments as Peak Power plants like Natural Gas Combined Cycle Plants are much more expensive to run than normal Thermal and Nuclear Energy Plants

Advantages and Disadvantages of Pumped Hydro Storage

This form of Energy Storage also leads to losses of between 15 – 30% due to inefficiency.There are also minor problems of environmental impact of large hydro plants and availability of  favorable sites. However Hydro power storage is quite inexpensive with  with estimates ranging from $500-$1500/kW power and $50-$150/kWh energy storage capacity; which is about 1/10th the cost of energy storage like Lithium Batteries.The main advantages are that it uses existing infrastructure of Hydro Power which has a large global installed base.In the 1930s technology was developed for building Turbines which could generate Electricity and also serve as Motors allowing Storage of Hydro Power.Also Pumped Hydro Storage has High Reliability of >99% and  relatively Long Cycle times which means that the stored electricity can be used in a few hours to a few days.

Why Invest in Pumped Hydro Storage

The trend towards Pumped Hydro Storage  is increasing with countries like China,Scotland,USA and Australia proposing massive new capacities.While USA has 21 GW and Europe 38 MW ,China has around 14.55 GW of Pumped Hydro Storage Capacity.China intends to increase this to 41 GW by 2020, which at $300,000/MW would mean an investment of ~7.5  BillionDollar by China alone over the next 10 years.

How to Invest in Pumped Hydro Storage

There are not a lot of glamorous startups in this form of Energy Storage unlike other segment of Green Industry like A123 Systems,Solyndra and Tesla.Most of the companies that can used to invest in this space are large global industrial companies like Toshiba and Emerson Control Systems.While a pure play is difficult to find,Investing in these Conglomerates is also a Less Risky Green Investment.

China State Grid to up pumped storage hydropower capacity – Reuters

The State Grid Corp of China, China’s dominant grid operator, plans to raise its pumped storage hydropower generating capacity to 21 gigawatts (GW) by 2015 and 41 GW by 2020, complementing the fast development of irregular renewable energy sources such as wind and solar power.On Sunday, the State Grid started building a 1.2 GW pumped storage hydropower plant in southern Jiangxi province, the first phase of a planned 2.4 GW capacity expansion that will have a total cost of about 5 billion yuan ($732.3 million).China had only 14.55 GW of pumped storage hydropower capacity at the end of 2009, according to the State Grid.China’s total power generating capacity was 874 GW at the end of 2009

Apple goes Green – Files Patents Incorporating Use of Solar Energy into iProducts

7 Jun, 2010
Samsung,Solar Energy

The world’s Largest Technology company by Market Cap,Apple has decided to follow the Green Trend recently filing Two patents related to Solar Energy powering  Electronic Products.Apple known for its blockbuster consumer electronics products like the iPad,iPhone and the iPod plans to use Solar Cells both in touch displays that most of its products use as well as the back end surfaces.Though Apple has not revealed any plans to use Solar Energy as of now,the Patents clearly show that it plans to do so in the future.The current state of Solar Cell technology will not lead to complete independence from the use of electricity charging,however with rapid advances in Solar Technology this does not look like a far fetched concept.Though not specific to Electronic Products,Samsung is Betting Big on Green Products through a massive capital investment plan

Apple’s Vision of a Solar Cell iPhone Supports Prototype in the Wild – Patently Apple

One of Apple’s more interesting patents kicking off 2010 revealed their aspirations of engineering solar powered media players. In Apple’s second patent on this very subject we get to peek at more of the detailing behind their engineering vision. Yet it boils down to two main points. Firstly we see that Apple envisions utilizing solar cell technology right across the board from iPod to iPad. Secondly and perhaps most intriguingly, we see Apple detailing how they’ll be able to integrate cell panels beneath their multi-touch surface as opposed to it being applied to the top surface of their media players as previously thought.

Ambani Detente – Reliance breaks the shackles,Plans to enter Indian Power,Telecom and Financial Services

7 Jun, 2010
Energy,Finance,Nuclear Energy,Solar Energy,Telecommunications

The detente between the Ambani brothers which lead to the rescinding of the non-compete agreement has resulted in Reliance Industries  Ltd (RIL) being the biggest Winner in the win-win arrangement.While on one hand Anil Ambani’s Reliance Communication which was facing a liquidity problem has benefited by being free to sell a stake in the company,Mukesh Ambani’s RIL has gained even more. RIL has been a huge cash cow generating billions of dollars in free cash flow from its Energy businesses each year.However RIL was finding it itself hamstrung by the non-compete agreement which prevented the company from entering the areas in which ADAG ( Anil Dhirubhai Group ) operated in. RIL tried its hand at overseas acquisitions but was not finding much success.However with the Ambani Brothers burying the hatchet,Reliance find its hands free to enter the virgin territories of Telecom,Power and Financial Services which will be high growth areas in India’s booming economy

Reliance has firmed up its intentions in all Three Areas through acquisitions,JVs and greenfield expansion.

Financial Services

Reliance has made its move in this sector by signalling its intention through acquisition of a small private player JM Financial Services.With the private financial companies trading at decent valuations compared to the sky high valuations during the 2007-2008 this might be a great time to make acquistions.

Mukesh Ambani may buy MF firm – LiveMint

Mukesh Ambani, who controls India’s most valuable company Reliance Industries Ltd (RIL), is in talks to buy a majority stake in JM Financial Asset Management Pvt. Ltd, his first attempt to enter Anil Ambani’s territory since the estranged brothers scrapped a “non-compete” agreement between them a week ago.

Negotiations are under way for a deal that values JM Financial Asset Management, the money manager controlled by investment banker Nimesh Kampani, at around 8% of its assets under management, which equals Rs685 crore, said two officials close to the development who didn’t want to be named.

Power

Reliance is making forays into Power starved Indian Market by planning to set up Thermal ,Solar and Nuclear Energy Plants.With its superb project executions skills and rock solid Balance Sheet , Reliance is ideally situated to become a dominant player in this space

Reliance may foray into nuclear energy – report – Reuters

Petrochemicals-to-gas conglomerate Reliance Industries Ltd is looking to enter nuclear energy, the Economic Times reported on Monday, citing unnamed sources with knowledge of the matter.The energy major is believed to be in talks with Bechtel, the largest U.S. engineering firm, for a possible collaboration, the newspaper said.”RIL has indicated to the government that it is keen on generation and distribution of nuclear power,” it quoted an unnamed senior government official as saying, adding the plans are at a preliminary stage.

RIL may enter thermal power sector – Energy Business

For RIL power sector is not new as it is already supplying power to Jamngar refinery, Hazira petrochemical complex and Jamngar city through 800 Mw captive power plant, and said sources close to the family.
The company might enter in to the bidding process during next round of UMPPs are offered by the government. However it is unlikely that, RIL will enter in to telecom or financial service sector as RIL are a B2B company and not B2C company

Telecommunications

Reliance Industries had brought a revolution in the Indian Telecom space by introducing the “Monsoon Hungama” scheme which allowed poor Indians to go mobile at a  startlingly low cost of $11 ( Rs 500)  . This arm was hived off as Reliance Communications under the separation agreement between the two Ambani brothers.Now Reliance sees an opportunity to return to Telecom through the new wave of investments in 3G.

RIL to offer 3G, WiMAX devices – Financial Express

Five years after its exit from the country’s booming telecom sector, Mukesh Ambani’s Reliance Industries Ltd (RIL) is plotting the road map for a return trip. However, this time around, it won’t be plain vanilla telecom services that RIL will be interested in, but rather the emerging segments of 3G and WiMAX. According to executives familiar with the development, the initial strategy is not to enter as a telecom operator, though this cannot be ruled out in the long run.

German Solar Feed in Tariff Story gets another Twist as Upper House refuses to pass the Law

4 Jun, 2010
Germany,Solar Energy

The German Solar Feed in Tariff cut scheduled for July 2010 has got another twist with the Upper House of German Parliament Bundesrat not passing the Law in its current form.The one-off German Feed in Tariff cut has seen enough twists and turns to make a person go giddy . It all started with the new German government deciding to cut the high Solar FIT which was leading to outsized returns for investors installing solar panels in Germany leading to a situation similar to Spain’s  2008 solar frenzy .The reason was that the solar module prices had gone down by almost 50% in 2009  with the FIT rate ( higher subsidized electricity rates given to generators of renewable energy) going down by the only scheduled 10% .So in addition to the annual 10%  2010 cut , the German government decided to add another 16% Feed in Tariff cut byMay 2010 which led to a huge uproar from the industry.This led to a lot of bargaining between the industry,the coalition partners of the German government and the various industry lobbies.Ultimately the law went in with almost the same percentage of cuts but the cut was delayed from May to July . With the German Lower House Bundestag passing the government proposal , the Bundesrat’s approval was only supposed to be formality.However it seems that the Eastern German states which have the most to lose in terms of jobs and taxes from these cuts want to reduce the quantum of the cuts which in their original form would lead to a ~35% cut in one year.The law which is supposed to go into effect by July 1 might see more delays as it leads to more negotiations.

German solar cuts hit parliamentary hurdle -sources – Reuters

Germany‘s Bundesrat upper house of parliament is unlikely to pass cuts to solar incentives on Friday, so a mediation committee would be needed to resolve the matter, government sources told Reuters on Thursday.If the parliamentary committee is called, the proposed cuts, which include a 16 percent reduction in so-called feed-in tariffs for new rooftop solar installations, would not be able to take effect on July 1 as planned, the sources said.

The impasse has arisen because states in eastern Germany, along with the big western states of Baden-Wuerttemberg and Bavaria, where the solar industry is strong and provides thousands of jobs, have decided to block approval, sources said.The Bundesrat, which represents Germany‘s 16 states, is due to vote on the planned changes on Friday.The cuts, which have been passed by the Bundestag lower house, could still be applied retroactively, the sources said.

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