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September 30, 2007

A Solar Technology for Every Application

Acciona's financing of Nevada Solar One, and a recent series of a financing, a prominent hire, and a big announcement from Concentrating Linear Fresnel Reflector (CLFR) developer Ausra has been keeping long-underappreciated Concentrating Solar Power (CSP) technology in the news recently.  I consider this great news, because the potential for cheap thermal storage of CSP and the gigantic size of the available resource means that CSP is likely to provide the backbone of reliability for any future decarbonized electric grid [Word Doc] where the clear skies which it requires to operate properly and sufficient transmission are available.

But CSP is only one of a broad range of Solar technologies, and here I will outline the framework which helps me understand and predict which ones are likely to be most successful.

To understand the future of any technology, you first need to understand its applications, which will lead to an understanding of the characteristics necessary to meet them.  Broadly, solar power is used to produce heat for climate control and process heat, and for electricity, both on the grid and off.

Daylighting

The oldest solar application is daylighting, the use of windows and other means allowing indirect sunlight to provide effective internal illumination inside buildings.  For individual homes, window and skylights are usually sufficient for the job, but there also exist architectural features such as light shelves and even active sun tracking systems which combine with fiber optics or mirrors [pdf]  to provide light to the interior of large buildings.  Such systems can provide significant energy and maintenance cost savings, as well as increase worker productivity.  They are particularly popular in schools because of studies which show enhanced student learning under natural light.

Thermal Applications

Solar thermal, when used for space heating is needed mostly in the winter in cold and temperate climates.  Because of the fact that it is only useful for part of the year, it needs to be simple and inexpensive to be practical.  Here, passive solar design and proper orientation of buildings is the hands down winner, because passive solar measures are inexpensive to free, with one of the most expensive steps being adding extra thermal mass, something which greatly enhances performance where daily temperature swings are large, and tends to remain fairly inexpensive given its low tech nature.   Passive solar design is almost certain to be a long term winner, although it is unlikely to be a big winner for investors because it does not require special products or materials.   Active solar thermal systems are typically too expensive to economically be used for only the part of the year when the heat is necessary, although when the heat from the system can be switched between multiple applications, such as domestic hot water or electricity generation, it can be economic for an active solar thermal system for at least part of a building's space heating load.  

For process heat, which includes solar domestic hot water, as well as heat for industrial processes [pdf], the active solar thermal systems shine because year round usage can make these still relatively inexpensive systems easily economic.  These systems tend to be either flat plate collector systems, which circulate a working fluid under a black heat collector, or evacuated tube systems, which are somewhat more expensive, but can reach higher temperatures because the heat collector is a solid wire, which avoids problems with boiling the working fluid.  Solar parabolic trough systems are also sometimes used in large scale, high temperature industrial applications.

Electricity Generation

With electricity generation, both time and location become important.   Electric transmission is constrained by infrastructure, and and electric storage is often more expensive than the power being stored, leading to large price premiums for power delivered where and when it's needed most.

The right place

For off-grid applications flat plate photovoltaic (PV) panels, which can be either thin-film or the more traditional crystalline silicon with a battery backup tend to be suitable despite the relatively high cost of power because of the scalability, relative simplicity, lack of moving parts, and low maintenance of the systems.  Concentrating photovoltaic (CPV) is seldome used in off grid homes to reduce up-front costs, because it tends not to work as well as flat plate collectors when there are clouds, and the need for a solar tracking system adds to maintenance costs which can be especially critical in the remote locations where off grid power is usually needed. Another form of practical off grid application is small scale power for lighting or equipment in areas where the grid is available but where the savings from avoided wiring make an investment in PV and a battery pack economical.  A common example of this are the now ubiquitous solar garden lights.

Photovoltaic technologies also have an advantage in distributed generation: placing the power source at the point of use.  The main advantage here is in their simplicity (which allows for low maintenance) and scalability, allowing the sizing of the power source to fit the need.  For instance, an electric utility might place west-facing PV on a transmission base station which is near capacity during times of peak load, thereby meeting a portion of that load and avoiding an expensive upgrade to the base station.

The right time

Since electricity typically requires expensive batteries for storage, technologies which can have inexpensive, built in storage have a cost advantage over ones that only produce power when the sun is shining.  Most solar electric technologies conveniently produce power on sunny summer afternoons, a time which normally corresponds to peak load in climates where air conditioning drives peak load.  This effect can often be enhanced by orienting the panels towards the west or southwest so that they are producing their greatest output in the afternoon.  This produces intermediate power, which is available when electric demand is high, but is also often available at non peak times, such as during the day in the winter.  Although such power is more valuable than other forms of intermittent power generation, which often have no correlation with the load profile, they also cannot be relied on to be available when needed, and are less valued by utilities which are responsible for providing power whenever customers want it. 

Dispatchable power is the most valuable form of generation (per kWh) on the electric grid, because the utility can use it only when demand is high and cannot be met with cheaper resources, while utilities also value base load power, which is almost always available and can be relied on at any time.  Since the sun is not always shining, these forms of power require some form of storage, and this means that they are best met with Concentrating Solar Power, which can be built with thermal storage, a much less expensive way to store power than batteries and other forms of electric storage (with the possible exception of Pumped Hydro, which is limited in its available capacity and location.)

Thin film vs. CPV

The incumbent photovoltaic technology, crystalline silicon is typically very expensive per watt, and there are two approaches currently being taken to cut costs: thin film and concentrating PV.  Thin film is another form of flat plate PV that requires much less and less specialized materials but typically has lower conversion efficiencies and durability than crystalline PV, which makes it inappropriate for applications that require a large amount of power generation in a small area, while concentrating photovoltaic (CPV) uses lenses or mirrors in to focus sunlight on small but very high efficiency cells to generate power at a lower cost.  CPV usually requires the ability to track the sun and few clouds, which means that it is unlikely to be as economic in distributed applications, although some companies are working to overcome these limitations.

Central Power Generation

For central power generation, the main factor in choosing between technologies is cost.  Here, the concentrating technologies (CSP and Concentrating PV) tend to have the advantage, and the ability to use transmission to bring the power to the point of use means that the generation can be placed in areas with a lot of sun and very few clouds where these technologies perform best.  The need for additional maintenance for solar trackers is less of an issue at a central solar plant, and this also give and advantage to the concentrating technologies.

Concentrating Parabolic Trough plants, Solar Tower, and Concentrating Linear Fresnel Reflector generators need large scale (in the hundreds of megawatts) to achieve their superior economics, while Dish Stirling and Concentrating photovoltaic (CPV) technologies achieve their economies of scale at less than a megawatt.  The superior scalability of Dish Stirling and CPV is largely negated by the cheap thermal storage (referenced earlier) available with the first three technologies which is not available with Dish Stirling or CPV.

Conclusions

Whenever a company announces a new technology with higher efficiency, lower cost, or better storage, it's easy to get carried away and think that that one technology is destined to win out over all the others.  I hope you now appreciate that there are as many or more applications as there are technologies, and which technology has the upper hand will depend on the intended use.  When evaluating companies, it's most important to consider the target market, and compare the technology to its true competitors.  This article and the following tables should provide a useful cheat-sheet when you do so.

National Solar Tour LogoIf You Want to See it in Action

Next Saturday (October 6) is the National Solar Tour in the US.  Click here to find a tour near you and see many of these technologies in people's homes.

Application Table

Application Category Dominant/Best Technology Other Technologies
Daylighting Lighting Windows, Skylights Light Shelves, Active systems
Space Heating Thermal Passive Solar Design Active solar thermal, especially if also used for other applications such as water heating.
Process heat/ Water heating Thermal Active Solar Thermal flat plate or evacuated tube
Distributed generation Electric Photovoltaic technologies   
Off Grid Electric Non-tracking PV with battery backup  
Central Power Generation Electric Concentrating Solar Power Concentrating PV, Flat plate PV
Dispatchable Power Electric CSP with thermal storage Others w/ battery backup
Intermediate Generation Electric All technologies, should be tracking or west-facing to make production align most closely to peak load.
Base load Generation Electric CSP with thermal storage Others w/ Battery backup

Electric Generation Technology Table

Technology Best uses Strengths Weaknesses
Photovoltaic      
    Flat Plate Distributed, off grid Simplicity, Scalability Cost
       Crystalline Distributed Low maintenance, high durability Cost
       Thin Film Distributed, off grid Low cost; scalability  Low efficiency
    Concentrating PV Sunny areas, Central installations Low cost Higher maintenance
Concentrating Solar Power (CSP)      
     Solar Trough, CLFR, Solar tower Central Generation; peaking and intermediate power; base load capable. Thermal Storage, Cost Large Scale
     Dish Stirling Sunny areas, Central installations Low cost; can be hybridized with natural gas; Scalability Higher maintenance

DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.

September 29, 2007

The Week in Cleantech (Sep. 23 to Sep. 29) - One Step in the Direction of Deep, Liquid and Global Carbon Markets

On Sunday, Lascelles Linton at AutoBlog Green informed us that VW intended to offer a hybrid option for ALL of its models. I'm a big fan of electric hybrid and plug-in hybrid technologies, but this looks to me like a risky bet. VW is already a leader in fuel efficiency, which taken alone represents a competitive advantage in an era of rising fuel prices and tightening environmental standards. HEV is a whole different ball game, and it remains unclear at this stage whether this will end up being the winner technology. If I were a shareholder, I probably would not applaud this move.

On Thursday, Biopact told us about the world’s first Certified Emission Reductions (CERs) spot market auction that took place on the Brazilian Mercantile & Futures Exchange (BM&F). Detractors like to point to flaws in the first phase of the EU ETS to argue that the entire idea of emissions trading is doomed to fail. Yet transactions such as this one, involving a European financial institution acting on behalf of industrial clients based in Western Europe, and an emerging market futures exchange, point to the potential behind an integrated global carbon market.

On Thursday, Peter Fairley at Technology Review discussed how to store solar power efficiently. An old theme coming back again - large-scale storage to smooth out the inherent variability of most forms of renewable energy. Could solar thermal offer part of the answer? As the article points out, storing heat is, for the time being, easier than storing electrical power.

On Friday, Clean Edge reported on FPL's (NYSE:FPL) latest set of alt energy initiatives. The interesting piece here is the $1.5 billion investment in solar thermal. Something tells me there is a bit of a solar thermal renaissance occurring at the moment - something to keep an eye on perhaps..?

On Friday, Todd Sullivan at Seeking Alpha argued that ADM's collaboration with ConocoPhillips was good news for shareholders. This is indeed an interesting partnership, but is not an entirely unique initiative. Many oil majors have been quietly (or not) trying to get involved with next-generation fuels. The movement toward diversification away from conventional oil is only going to intensify in the coming years, and there will be significant money to be made for players who are ahead of the pack.

On Thursday, Environmental Finance informed us that HSBC was stepping into the climate change index arena. Call it climate change or call it cleantech, many of these indices track exactly the same thing; exposure to environmental technologies on the revenue side. Until recently, small pure-play cleantech outfits that were largely responsible for creating such indices. The entry of big finance into this game is a promising sign that cleantech is an increasingly entrenched investment theme rather than just the latest fad.


The Week in Cleantech is a weekly roundup of our favorite cleantech and alt energy blog posts and stories from across the web. If you know of a good piece that you think should be included here, don't hesitate to let us know!

September 27, 2007

Two Canadian IPPs For Your Portfolio

Most alternative energy investors are aware of North American wind power's very bright growth prospects. In past articles, we discussed encouraging projections for the US and Canadian (PDF document) wind markets between now and 2015. While onshore European capacity is fast being exhausted, North America is only beginning its foray into wind and some major capex can be expected in this space over the coming years.

Besides solid expected growth, another phenomenon is currently impacting the wind industry; consolidation. This is a global movement that is affecting all of the power gen sector, and that has no-doubt been aided by easy credit in the past few years. Examples of recent deals in the North American wind industry include EDP's July, 2007 acquisition of Horizon Wind for $2.7 billion, and Suez' July, 2007 acquisition of Ventus Energy (PDF document) for C$124 million.

Playing Growth & Consolidation

Two of the most interesting ways to play growth and consolidation in the North American wind sector lay on the Canadian side of the border. They are two Independent Power Producers (IPPs) with attractive pipelines of projects, good forward-looking revenue visibility because of their exposures to Power Purchase Agreements (PPAs) with credit-worthy customers, and attractive take-over targets due to their size and the location of their generation assets. These two companies are: Boralex [TSX:BLX or BRLXF.PK] and Canadian Hydro Developers [TSX:KHD or CHDVF.PK].

Boralex

Boralex currently runs a generation portfolio totaling around 350 MW, with 103 MW of wind. Over the next five years, however, Boralex is expected to add another 690 MW of wind to its portfolio. Besides having access to PPAs, Boralex is also active in the US Renewable Energy Credits (RECs) market - in 2005 and 2006, respectively, one of the company's facilities in the US recorded C$8.1 million and C$6.2 million in RECs revenue alone. With 2007E EV/EBITDA of around 12x and 2007E PE of around 21x, Boralex is trading roughly in line with its comps. The company is geographically well-diversified, with operations in Quebec (one of Canada's hottest wind markets), Ontario, the Northeastern US and France.



Canadian Hydro Developers

At upwards of 60x 2007E PE and around 24x 2007E EV/EBITDA, KHD does not come cheap, either as a stand-alone stock or relative to industry peers. However, the company has a very attractive pipeline of wind projects across Canada, and valuations are expected to converge with industry averages over the next three years. Canadian Hydro currently has around 265 MW of generating assets with around 154 MW of wind. The company has a further 384 MW of wind currently under construction and a total project pipeline of about 1,400 MW - one of the most interesting such pipelines of any mid-size North American IPP. While KHD is an expensive buy at the moment, a lot of that has to do with all of the growth the firm is projected to undergo between now and 2010, as well as with a high amount of revenue visibility associated with high exposure to PPAs.


Two Of a Kind...

Both firms belong to a very rare breed - publicly-listed alternative energy generation pure-plays. While there are a number of similar companies listed on the Toronto Stock Exchange, most of them are income trusts with limited growth pipelines or small players with next to no track records. Both companies are increasingly on the radar of public market investors due their projected growth and to the fact that they are potential acquisition targets. Fundamentally-speaking, both look very attractive in the medium term (3 to 5 years) due to their extensive exposure to various schemes by Canadian provincial governments to boost wind generation capacity. These two companies really are, for all intents and purposes, two of a kind.


DISCLOSURE: The author is long Canadian Hydro Developers.

DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.

Change of Email Address

A quick note to inform our readers that I recently changed my email address due to vastly increased levels of spam in the last few months. My new email address is:

Should you wish to include my contact information on your website, I would like to ask that you please use a format that does not make it easy for robots to read email addresses. We use images at AltEnergyStocks.com - this is one of the most effective ways.

I will be checking my old email address for another month, after which we will discontinue it permanently.

Best,

Charles

September 23, 2007

Visual Comparison of Alternative Transportation Fuels

I've recently agreed to do a of couple presentations on "Investing In Green Energy" at conferences this October, and so I've decided it's time to update and expand on some graphs I constructed this spring: I created a pair of graphs which give an overview of how different electricity generation technologies compare.  These are not precise graphs with anything resembling scientific accuracy, but I think they're a useful too for understanding the strengths and weaknesses of various technologies.  

This is my attempt to do the same for transportation fuels.  Note that I'm really only talking about cars and trucks here.  In a discussion with a group of private equity investors, we came up with six to eight metrics that we thought would be useful for characterizing transportation fuels, and I then distilled them into three groups of similar metrics so that I could display them in graphic form.  Here they are:

Quantity

    How much of this fuel is available?  How much capacity is there to replace the oil used to run our current transportation fleet with this fuel?  (This is a measure of how much can be produced in a given year, not the ultimate size of the resource.) This is represented in the graphs below by the size of the spheres.

Availability

Represented on the horizontal axis; farther to the right is better.

Components:

  1. Infrastructure:  How easily can we get this fuel to our vehicles?
  2. Density: Is the fuel both compact and light weight?    How much will we have to change our existing infrastructure to use this fuel well?  Is the energy storage medium sufficiently compact and light to fit into vehicles similar to the ones we use today. 
  3. Safety: Is it safe enough to use in vehicles similar to those we use today?

MPC (Miles per Cost)

Represented on the vertical axis.  Fuels that will take you farther for less cost (economic and social/environmental) are above more costly/damaging fuels.

Components:

  1. Mileage: How far can you go for $1?
  2. Social/Emissions/Environmental benefits: How far can you go on fixed level of emissions?

The scale is relative, and assumes vehicles of comparable weight and aerodynamics.

The Graphs

Taking it all together, the fuels I expect to be used the most will be the ones which are farther to the right (they are easier to use.)  The first graph represents my understanding of the current transportation fuels landscape, while the second represents what I expect to be the case in 20-30 years.  

Click on the graphs for larger versions with titles and key.

Current Fuels Comparison
 currentthumb.JPG
 

Future Fuels Comparison

 futurethumb.JPG

If you don't like my assumptions, you can also download the Excel Spreadsheet I used to generate them, and see how it looks with your changes.

Note that all these metrics involve a lot of qualitative judgment, and just plain guesswork when we're talking about the future fuels graph.   For an investor, refining your own view of where each potential fuel is headed will be the key to achieving the returns you hope for.  The trick will be to invest in companies that will benefit as a fuel moves towards the upper right hand corner of the graphs, as it becomes more available and easier to use, or as it becomes less expensive to produce the same amount of travel relative to the other alternatives.

DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.

September 22, 2007

The Week in Cleantech (Sep. 16 to Sep. 22) - More Solar Thermal, More Storage, and a Better Grid

On Tuesday, Andrea Quong at Red Herring told us that investors reaped returns on clean energy. A quick look at returns in the European cleantech VC and PE spaces.

On Wednesday, Emily Gertz at World Changing gave us the run-down on the legal climate on climate change. This action by NY's Attorney General formalizes what many have been saying for a while - certain power gen companies, and the investors that own them, could be exposed to serious regulatory risks related to global warming in the years ahead. Strangely, those companies and their investors often seem to favor the ostrich approach.

On Wednesday, Steve Gelsi kept up with T-Boone Pickens for us. Interesting that Pickens decided to go boutique with this IPO. This is a very interesting business model and probably a growth stock worth keeping an eye on. More broadly, it's always interesting to hear an energy legend talk about where energy is going.

On Wednesday, Todd Woody at the Green Wombat wondered whether the sun could power the US. This is article raises some interesting questions about the capacity for alternative energy combined with large-scale storage to provide reliable base-load power. As our regular readers know, Tom is a big fan of solar thermal and we both very much like storage.

On Thursday, North American Wind Power informed us that a new consortium was bring formed in California to facilitate the integration of renewable energy into the grid. This is an important piece of news. Transmission is one of the most critical hurdles to alternative energy growth, and proactive measures specifically targeted at renewable energy hotspots could be provide a major lifeline for future expansion.

On Friday, Martin LaMonica informed us that a "clean coal" start-up had just raised $100m. This outfit has some significant backers, both in the industry side (Dow, AES, Suncor) and on the VC side (Kleiner Perkins). Its target area of operation, Alberta's tar sands, is fast becoming the number one North American greenhouse gas emitting region. Investors should keep an eye on Alberta not only because of its oil sands, but also because it is a prime market for rolling out greenhouse gas control technologies.


The Week in Cleantech is a weekly roundup of our favorite cleantech and alt energy blog posts and stories from across the web. If you know of a good piece that you think should be included here, don't hesitate to let us know!

September 19, 2007

Q2 2007 Biofuels Country Attractiveness Indices

Ernst & Young recently came out with its quarterly rankings of the investment attractiveness of the main national biofuel markets (PDF file). The report contains three indices: the All Biofuels Index, the Ethanol Index and the Biodiesel Index. No big surprise with most of the results.




The report also outlines some of main deals to have occured in the global biofuels space in Q2, and notes two worrying developments. First, the German biodiesel market appears less than healthy at the moment, with many refiners operating at below 50% capacity. Second, Chinese authorities recently placed a moratorium on granting new permits for the production of cereal-crop-based ethanol on concerns over food price inflation in the country.

On the positive side, the report notes growing interest in the use of jatropha as a feedstock for the production of biodiesel. Jatropha does indeed have a number of qualities that make it ideal for biodiesel production, and some money is starting to change hands in that sector. It may, however, be a tad early for investors to be able to play this.

The biofuels space is an interesting beast, standing at the confluence Western governments' efforts to protect their farmers and emerging markets' attempts to find a in. I remain skeptical about the long-term prospects of the industry as a whole, and outright bearish on corn-based ethanol. Nevertheless, many governments are pushing so hard to make this happen that there are bound to be some opportunities in the near and medium terms.

September 17, 2007

Who Killed the Electric Bus?

3607TQ13.jpg

In the last Technology Quarterly, The Economist had a story about the electric busses in 1907 London.  As they tell it, the electric bus had a real chance to beat out the internal combustion engine, and the company only failed because of fraud.  The electric technology was in many ways superior to the internal combustion engines which eventually won out. In fact, many people at the time still considered the horse to be the far superior technology.  These days, the battle is still between the same three fuels: Electric, Petroleum, and biomass (grass and oats for the horse, corn and grass for cellulosic feedstock today.)

It's a fun article, but also a cautionary tale for investors looking at alternative modes of transportation today.  Technology is not everything when running a business.  The business needs to be well run, and its products have to be something that the world is ready to accept.

For instance, after I got over my initial reaction that it was a joke, I now think that the inflatable car is a superior technology.  But who is going to buy it?

September 16, 2007

Electro Energy: Drained, or Ready to Recharge?

Bottom-Fishing for Batteries

I believe that we have only seen the beginning of the current market decline.  You should take that with a grain of salt, since I've been unremittingly bearish since 1999 and for more than half that time, the market has been going up.

Even if the market has much further to fall, some stocks may have already taken most of the damage they are likely to take.  Knowing that I might be wrong, I've started to do a little bottom fishing among companies that people have been starting to dump as the realize stock prices can also go down.  One of those stocks is Electro-Energy Inc. (EEEI).  Even casual readers of Alternative Energy Stocks know that I'm a big fan of batteries of all sizes, because I view storage of electricity as essential to both improving the way we produce electricity, and using it to run our vehicles.

Over the next five to ten years, I expect that rising fuel prices will mean most new cars will come with hybrid drivetrains, and that some of those will be Plug-in Hybrid Vehicles (PHEVs - now being tested in Japan and Europe.)   The demand for secondary (rechargeable) batteries is projected to grow 50% between 2007 and 2012 solely on the basis of greater use of secondary batteries in electronic devices.   The total demand for secondary batteries in the US in 2007 was about $8 billion, or about 35 million kWh of capacity, but a single PHEV-25 (a Plug-in Hybrid with an all-electric range of 25 miles) would need about 8 kWh of battery capacity, while the current Prius has about 1.3 kWh of batteries.  Annual production of 4.5 million PHEVs (60% of the current number of cars sold in the United States) would double US demand for secondary batteries.  

Clearly, a 60% penetration rate for PHEV passenger cars will take a long time.  Yet we are likely to see a continued rise in the percentage of hybrid vehicles, an increase in the number of electric vehicles (EVs), and continued penetration of hybrid drivetrains into public transport, commercial and industrial vehicles.  One factor which is likely to drive adoption is the new move towards leasing batteries currently being pursued by Th!nk and considered by GM, allowing customers to purchase EVs and PHEVs without an additional upfront cost.

Battery Technology: Harder than it Looks

Batteries have been around almost as long as humans have known about electricity.  The word was coined by Benjamin Franklin, although what he was working with was a type of capacitor.  The first electro-chemical battery, which produced electricity through an electro-chemical reaction like batteries used today, was invented in 1800.  

Over 200 years later, we're still struggling to concoct affordable batteries that can store energy at sufficient density and be recharged enough times to be used in practical Plug-in Hybrid vehicles without exploding.  Despite the recent burst of interest in advanced lithium-ion (Li-Ion) batteries, history shows that battery technology is tricky.  This isn't rocket science... it's more difficult.  Even if you're convinced that one particular battery chemistry is far superior to all the others, this report on the limits of available Lithium makes a convincing case that we'll have to use a mix of battery chemistries just on the basis of resource availability.

Given all that, makes sense to hedge our bets by looking at companies whose fates do not rest on perfecting new technology to succeed.

Electro-Energy (EEEI) is one such company.  Their core technology is a method of manufacturing bipolar cells, an innovation that's been around for years but has resisted commercialization due to electrolyte leakage.  Bipolar cells are a different battery geometry which lessens a battery's resistance to current flow, and allows a smaller battery to produce comparable power to a conventional cell.  They currently use this technology with several battery chemistries: including the familiar Nickel-Cadmium (NiCd), Nickel Metal Hydride (NiMH), and Li-Ion battery chemistries.   This implies to me that if other companies succeed in improving batteries with better chemistries, separators, or electrodes, EEEI will likely be able to further boost the power of the new battery with their bipolar geometry.

My attention was recently drawn to Electro Energy in an interview with Kirby Beard, COO of Porous Power Technologies, a battery membrane developer.  He pointed out that their plant near Gainesville, Florida is the largest battery production facility in North America.  While the facility requires some re-tooling, it would be valuable to a company wishing to expand battery production in North America. 

Bipolar Depression

 eeei.png

EEEI has had a baleful performance since the stock price peaked around $13 in December 2004.  The big price drop in August was triggered by their disappointing second quarter results.  The move was probably accentuated by a lessened willingness of investors to take on risk.  EEEI has explicitly stated that they need to secure additional funding to cover operating costs until they can reach positive operating cash flow, and on Thursday they announced that they announced they had engaged a specialist law firm to help them with debt restructuring, a move which spooked investors again on Friday.  

However, interest in alternative energy investment remains high among sophisticated investors.  EEEI is a company with interesting technology, as well as Gainesville plant, which they acquired for $21 million in stock and warrants in April 2006.  With the decline in stock price, EEEI's entire market capitalization has fallen to $12.37 million.  You can now buy a piece of the Gainesville facility for 40% less than they paid for it 17 months ago, and you get their technology, their other facility in Colorado Springs, and a management team described by Torc Investments as "impressive" thrown in effectively for free. 

While institutional investors have been dumping EEEI stock by the truckload, President and CEO Michael Reed bought his 65,000 shares last winter and spring, at prices between $1 and $1.50, although no other officers own stock in the company.  I have not yet been able to determine if Mr. Reed's purchases were voluntary, or part of the company's stock incentive program, so his ownership is not necessarily a sign that he is bullish enough to buy the stock on his own accord.  The balance of the roughly 28% of the company owned by insiders is the stake which was exchanged for the Gainesville facility, so we cannot draw conclusions from their continued ownership.  

Given the tightening credit markets, getting funding is likely to be much more difficult than it would have been just six months ago.  Does the stock have further to fall?  Quite possibly.  Is it currently well valued, even given the risks?  I think so.  In such situations I usually buy small amounts with limit orders near current prices, and and then buy more if the stock falls further.  Stocks that are this beaten down and lightly traded can provide excellent buying opportunities to investors with extremely strong stomachs, because even a small order can move the price considerably in any direction.

More Than the Sum of its Parts

Given the rapidly growing interest in hybrid, plug-in hybrid, and electric vehicles, and my expectation that the market for secondary batteries of the type EEEI makes will grow faster than current consensus projections, I believe that the company's value if it were broken up and sold off would be higher than the current market capitalization.  If EEEI can obtain financing to ramp up production at the end of this year and during next year as planned, the gains for investors today are likely to be considerably greater.

Many investors are currently depressed about this bipolar battery company.   I'm waiting for the next manic episode.

DISCLOSURE: Tom Konrad  and/or his clients have positions in the following stocks mentioned here: EEEI.

DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.

September 15, 2007

The Week in Cleantech (Sep. 9 to Sep. 15) - TXU In, SaskPower Out!

On Tuesday, Mark Gongloff at the WSJ's Energy Roundup informed us that Alcoa couldn't wait to go geothermal. This is indeed an interesting development. Aluminum smelters are some of the most electricity-intensive industrial processes around, and, in a context of rising energy prices, there are very real incentives to explore alternatives for firms in this industry.

On Wednesday, Kevin Bullis at Technology Review looked into making cheaper solar cells for us. Could Heliovolt be the next First Solar (NASDAQ:FSLR)?

On Wednesday, Tyler Hamilton at Clean Break warned us of the inherent limitations of so-called "clean coal". The failure of this project, which would have been one of the first such initiatives to be fully rolled-out in North America, does indeed speak volume. As an investor, carbon capture and sequestration is not something that I would put my money behind, at least in the foreseeable future.

On Thursday, Environmental Finance gave us the final cut of the TXU buy-out story. This deal set a very interesting precedent in the US: big finance saw enough of a potential regulatory risk to force management to back down on a large capital expenditure plan. What does that tell you about older coal-fired plants across America? Some players in the power generation industry stand to take a big hit under Federally-imposed carbon caps, so you may want to take a peek at your favorite utility's generation portfolio.

On Friday, Jim Fraser at The Energy Blog discussed Novozymes' latest foray into biofuels. Last February, we told you that Novozymes was building exposure to cellulosic ethanol through its work on enzymes to break down cellulose. This is further evidence that the company is indeed serious about its biofuels activities, and good news for those who hope to see the cost of producing cellulosic ethanol come down.

On Friday, Jim Hansen at The Master Resource Report worried about a lithium shortage. Should we try to replace the entire vehicle fleet with PHEVs and EVs based solely on Lithium batteries?

The Week in Cleantech is a weekly roundup of our favorite cleantech and alt energy blog posts and stories from across the web. If you know of a good piece that you think should be included here, don't hesitate to let us know!

September 12, 2007

Power Purchase Agreements Webinar

Greentech Media is hosting a one-hour webinar at 12:00 PM ET Wednesday, September 19th, entitled "The Advance of the Solar PPA: When an Organization is Ready for a Power Purchase Agreement."

PPAs are an interesting new area of activity in alternative energy, and definitely something worth understanding for the alt energy investor. For further details and registration, visit Greentech Media's special section for this event.

Structured Leveraged Concentrating Solar Power?

On August first, Acciona Energy closed financing on Nevada Solar One, in the first leveraged lease structured financing in the United States.

This begs two questions:

  1. What in the world is a leveraged lease structured financing?
  2. Why do we care?

What in the World?

An in-depth analysis of the economics of leverage leasing for all three parties involved is available here.  Structured financing is a generic term for any form of financing more complex than a loan or a rental.  For those of you who need to remain awake, here's the short version: a leveraged lease is a way of obtaining financing that allows the three parties (lenders, equity investors, and lessee) involved to parcel out the risks, tax benefits, and income streams in a way that suits each of their needs.

Why We Care

While using structured finance can lead to substantial financial benefits for the parties involved, the deal can only be done if the lenders believe that the cash flows from the underlying asset, in this case Nevada Solar One, a Concentrating Solar Power (CSP) plant, are sufficiently reliable that they are willing to loan money in exchange for  a share of those cash flows.

In other words, the lenders believe that Acciona (ACXIF.PK) will be able to operate the CSP plant with sufficient reliability to earn enough money to eventually pay off the $266 million they put up for the deal.  The equity investors believe that the CSP plant will retain some value at the end of the lease, so they will not be left holding the bag.

The completing of a leveraged lease is implicit proof that all the financial institutions involved have a degree of confidence in CSP technology, which they would not have in a development stage technology.  By their actions, lenders Spain-based Banco Santander and BBVA, and Portugal-based CAIXA Geral de Depositos and equity investors JPMorgan Capital Corp., Northern Trust (NTRS) and Wells Fargo (WFC), are all saying, "Concentrating Solar Power is a main-stream technology, and we are confident of its predictable operation for the lifetime of the lease."  Just as important, they're putting their money where their mouths are.

When lenders believe in predictable cash flows, they reduce the interest rate they charge to finance a project, just as a mortgage company will charge a lower rate of interest to a married couple with steady jobs than they would to a single man who has never worked in his life (if he could obtain a loan at all.)  A lower interest rate translates into a lower discount rate when calculating the Levelized Cost of Energy which a technology can produce.  

With financial innovation, a group of Iberian and American financial institutions have reduced the cost of energy which will have to be paid by this plants and future CSP plants in the United States just as surely as any technical innovation would.  Everyone who wants clean energy at affordable prices should care.

UPDATE: 9/13: In this article on CSP by Fortune/CNN columnist Marc Gunther, he quotes an executive at CSP developer Ausra, saying "As soon as we can build solar power projects with the same cost of capital as building conventional coal or natural gas plants, we'll deliver electricity at the same cost as coal."  (emphasis mine.)

DISCLOSURE: Tom Konrad  and/or his clients do not have positions in any of the companies mentioned here.

DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.

September 09, 2007

The Grid Impacts of Net Metering

Net metering describes the requirement that an electric utility buy electricity from any of its customers that generate their own electricity (usually with some sort of renewable energy, such as solar or wind) at the same price that they sell it to the customer.  That seems fair, doesn't it?

The Utility Perspective

It doesn't seem fair to the utility.  Utilities do more than just generate and sell electricity to customers.  They also are responsible for transmission (delivering the electricity) and reliability (making sure that the lights work when you flip the switch.)

Taking just the reliability requirement, suppose that a homeowner, call him Sol, wants to install a solar photovoltaic (PV) system on his roof and sell the electricity back to the grid when he was not using it himself.  But suppose Sol had a reliability requirement.  For instance, suppose that whenever Ted, one of his neighbors,  turned on the TV, Sol had to make sure the PV system was working, or the TV would not turn on.  Also suppose Ted knows where Sol lives, and that Ted likes to watch TV at night. 

Ted would probably grow quite unhappy with Sol quite rapidly, and would definitely complain, and might even start pay Sol an unfriendly visit at uncomfortable hours.  Sol would probably think twice about signing up for net metering under those rules.  

Utilities aren't enthusiastic about net metering, either.

The Benefits of Grid-Tied Solar

The example above is something of a straw man.  Unlike Sol in my example, with net metering, utilities are not being asked to do something which they are incapable of doing.  In fact, utilities balance load and demand all the time, and so long as net metered systems only account for a small fraction of a utility's total demand, they are un likely to be a strain on the grid.

In fact, because PV panels usually produce power on hot, sunny afternoons when peak load is driven by air conditioning, solar homes often provide a net benefit to the grid [.pdf] for which the customers are not paid, because most utility customers are charged a flat rate per kWh, which does not take into account the higher value of electricity at times of peak demand.

WFPV.GIF
Peak reduction from near Zero Energy Homes with West-facing PV (blue) for Sacramento Municipal Utility District. Slide 19

The ideal orientation for PV depends on the utility's load profile.  West-facing PV will be better for some, while south facing will be better for others.  

What about Small Wind?

Not all distributed generation is south- or west-facing PV, however, and other forms of generation such as small wind often produce power at times unrelated to peak.  If the distributed generation customer is charged a flat rate for electricity, the costs of servicing the customer may come to exceed what he pays for service.  This is especially likely for a customer with a small wind turbine which may produce very little of its power at high priced peak load times, and a lot at times of low load.  This requires the utility to transmit the power a long distance to where it may be needed, as well as run its least expensive generation at less than full capacity in order to accommodate the extra power generated by distributed wind.  

Many environmentalists will read "least expensive generation" in the line above and think "that's exactly what we want... least expensive generation means coal plants, and it would be wonderful if a utility had to shut those down."  

While coal is the least expensive form of generation for most utilities today, but it may not be for long, and not only because of the cost of pricing un carbon emissions.  In terms of marginal cost of generation (the cost of producing an extra kWh of power) wind is already cheaper than coal because there is no fuel cost.  I no longer recall where I heard this anecdote, but I believe that last winter (2005-6), on an extremely windy weekend in Europe, electricity was trading for free on the wholesale market, and many utilities were shutting their coal plants down.  North America still lags Europe in terms of wind penetration, yet utilities in windy areas are likely to get to high wind penetrations first, and these are precisely the areas to which small wind is also most suited.  In the not so distant future, I can easily see a scenario where a rural utility with a high degree of wind generation of its own might have to shut down some of its wind turbines in the middle of a windy night because of net-metered small wind, forcing the utility to pay retail rates for electricity it would otherwise have gotten for free, and then having to pay to transmit that power somewhere it might actually be used.

The Bigger Picture

This is not to say that small wind is bad and west-facing PV is good, just that each impose different costs or benefits on the system as a whole.  Wind can also be good for a system.  In February of 2006, an unseasonable cold snap caused power outages in Denver in part due to unexpectedly large demand for natural gas for heating.  Cold winter nights also happen to be when the wind blows hardest and most consistently on the northeastern Colorado plains, so a small wind turbine on net metering would have actually helped to reduce the severity of the controlled rolling blackouts Xcel ordered.  If the 400 MW Peetz wind farm (now in phase II of construction) had been operational in February 2006, I think it is unlikely that the blackout would have happened at all.

 windPerformance.bmp
Graph from Trans-Elect, LLC using data from NREL Wind Performance Projections.  Note that the capacity factor for Peetz in NE Colorado is over 60% in the month of February, when the blackouts occurred, and capacity factor is also highest at night.  The other lines are wind regimes from SE Wyoming and Lamar in SE Colorado.

Having Customers Pay for Costs and Benefits

Net metering is an implicit subsidy for distributed generation, because the net metered customer gains the benefits of the utility's grid (reliability and transmission of electricity) without having to pay for it.  In addition, some forms of net metered generation are given greater benefits than others when electricity is metered at a flat rate.  If the price of electricity varied depending upon the load on the system (Time of Use pricing), then properly oriented PV would often be paid more than it under a flat rate system, and people would be encouraged to orient their solar panels for maximum system benefit, rather than maximum electrical output.   

As for the implicit subsidy of unpaid-for transmission, I believe it should be abolished, and replaced by an explicit subsidy large enough to reflect the social benefits of distributed generation other than increased grid stability, which is accounted for with time of use pricing.  

California Solar Initiative: A Note of Caution

When California mandated that solar customers had to sign up for time of use metering in order to earn solar rebates, solar installers felt that they were not given enough support to understand the new rules (which included a lot more than the switch to TOU.)  Non-specialist customer confusion was understandably greater, and TOU pricing became the focus of a minority of solar customers who were actually charged more than they would have been under flat rates (because their solar system too small to offset enough of their air-conditioning driven usage during the peak period).  The California Public Utilities Commission (CPUC) removed the TOU pricing requirement because of the outcry.

The fact that the CPUC backed down is a tragedy.  In a very real sense, the solar customers who were hurt by the switch to the TOU tariff were the ones who had been receiving an unfair subsidy in the flat-rate system: they used a disproportionate amount of power during peak times, so much so that the benefits of solar systems were too small to replace the lost implicit subsidy.  Customers who suddenly had to pay something closer to the true cost of their electricity usage found that they were paying more than they had been, despite their new solar panels.  They unsurprisingly clamored to get back onto the flat rate where they were able to take advantage of the market inefficiencies which subsidize their air-conditioning chilled lifestyles.

Such homeowners would do a lot more for the environment if, instead of splashing out money on a PV system, they had made their homes tighter and switched to more efficient air conditioning.  For instance, the hyper-efficient Coolerado Cooler (The commercial version of which is sold as the Delphi HMX) works best in the hot, dry climates which were worst hurt by the time of use rates.  As I have said many times, PV holds an unhealthy fascination for people, to the point that money which would do far more good spend on energy efficiency improvements is effectively wasted on solar.  If we are truly more interested in solving the world's climate problems, we will spend limited government rebate money subsidizing energy efficiency improvements with large net benefit for the grid that also reduce carbon emissions, rather than subsidizing expensive solar systems for a fraction of the benefit.

Conclusions

Net metering is definitely advancing.  On August 21, I attended a Colorado Public Utilities Commission (PUC) hearing on distributed generation, and it seemed clear to me that some form of statewide net metering would likely become law in the Colorado in the next legislative session.  See my notes from that meeting for more detail.  I did bring up the possibility of combining net metering with TOU pricing in the meeting.  However, that and other good ideas from participants (including inverted tiered block pricing) or using solar rebates to subsidized increased energy efficiency will probably require considerably more advocacy if they are to make it into law.  

On the bright side, the Colorado Governor's Energy Office did suggest that the PUC investigate west-facing PV as part of a net metering program.  They are likely to be listened to, although inclusion in the final package from the state legislature is chancier. 

The California experience shows that the complexity of such schemes means that care will have to be taken with design, and educational outreach is important.  If the California consumers were helped with efficiency improvements before they installed solar, there would likely have been much less of a backlash, and the efficiency improvements would have done a lot more good than the solar PV systems which would have served as the carrot to induce the efficiency improvements.

DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.

September 08, 2007

The Week in Cleantech (Sep. 2 to Sep. 8) - Is Geothermal Really Alternative Energy's Klondike?

On Wednesday, Energy Tech Stocks gave us the heads up on a recent warning by Raymond James & Associate about declining oil production. Interesting to see a thesis that was derided as pure fantasy as recently as two years ago slowly creeping up into the mainstream.

On Thursday, Sam Abuelsamid at Autoblog Green opined that CO2 regulations in Europe could place the balance of power on the auto parts suppliers' side in the fight for profit margins. We have noted in the past how some of the most interesting (and 'safest') clean car investment opportunities rested with parts manufacturers. Besides CO2 regulations in Europe, tightening fuel efficiency standards the world over should help parts manufacturers do well relative to car makers.

On Thursday, Andrea Quong at Red Herring informed us that VCs were striking out for greener pastures. It is always interesting to know where cleantech venture capitalists are turning their attention to.

On Thursday, Biopact reported on China's latest alternative energy plans. Of course the caveat with this grand scheme is that half of the proposed US$265 billion will go toward large hydro, which tends to receive mixed reviews from just about everyone. Nevertheless, US$133 billion in investments in biofuels, bioenergy, wind and other forms of alternative energy, not to mention pollution control, will create very interesting opportunities for a variety of different companies.

On Friday, Rob Day, formerly of Cleantech Investing and now with Greentech Media, outlined for us the main barriers to adoption of energy efficiency applications in commercial buildings. An interesting piece that partly explains why, despite seemingly compelling economics, energy efficiency technologies such as smart metering aren't taking off as fast as could be expected.

On Friday, Jim Fraser at The Energy Blog reported on a small Icelandic bank's big bet on geothermal. Geothermal tends to fade in and out of the alternative energy newswire, yet it may be one of the most compelling alternative energy investment stories out there. I haven't read the report but I trust that it is packed with very useful information for the would-be geothermal investor.


The Week in Cleantech is a weekly roundup of our favorite cleantech and alt energy blog posts and stories from across the web. If you know of a good piece that you think should be included here, don't hesitate to let us know!


September 06, 2007

RSS Feeds for CleanTech News and Alt Energy Stocks

In June, we launched CleanTech News which generates the top headlines in the cleantech world by automatically by scanning over 240 cleantech blogs and news sources. Today we are launching an RSS feed for CleanTech News. The aim of this feed is to allow you to track what is happening in the cleantech world through a single feed.

Tom and Charles have been using the CleanTech News feed for some time and they have also been providing feedback which has been used to improve the application that generates CleanTech News. Both Tom and Charles, who are voraciaous consumers of cleantech information, have found CleanTech News to be very useful. We are confident that you will agree and encourage you to sign up for CleanTech News and give it a try.

We are also now using the FeedBurner service to distribute and track the RSS feed for Alt Energy Stocks. If you are currently following our site through RSS, please take a moment to switch over to the new feed at Alt Energy Stocks. Feedburner will give us aggregate information about our subscribers and readership and this will help us better serve your needs. Your old feed may work for sometime, but we will likely discontinue those feeds at some point so we do encourage you to switch over now.

As always, we welcome your comments and feedback.

September 05, 2007

Alternative Energy Stocks Portfolio Update

It's been six weeks since I last provided readers with an update on the Paper Portfolio.  According to the guidelines I laid out there, stocks are added to the portfolio when Chares or I mention them positively for the first time (leaving out ones for which Yahoo! finance does not have historical data, which are mostly pink sheet stocks.)  Here are the ones we've added since then.

Stock Article Date Added Price Price 9/5/07
DOW Investing in energy Efficient Homes 7/24/07 $47.20 $42.20
OC Investing in energy Efficient Homes 7/24/07 $33.00 $24.26
HON Performance Contracting 7/25/07 $60.88 $55.10
ASD Performance Contracting 7/25/07 $40.45 $36.26
GPRE Cellulosic Beef 7/31/07 $18.95 $16.25
USBE Cellulosic Beef 7/31/07 $12.49 $10.71
VSE Cellulosic Beef 7/31/07 $14.30 $13.01
PEIX Cellulosic Beef 7/31/07 $10.22 $11.79
TSN Biodiesel's Nightmare 8/13/07 $19.96 $19.48
UFS Cellulosic Feedstock 8/29/07 $7.89 $8.25
PCH Cellulosic Feedstock 8/29/07 $42.62 $44.09
BFRE.ob War with Iran? 9/4/07 $4.80 $4.61
CZZ War with Iran? 9/4/07 $10.70 $10.67

According to the quick poll we took on August 16-18, our readers were about evenly divided between the optimists who felt that Alt-E stocks would rise as the market falters, and those who thought Alt-E would fare much worse.  A look at the stocks above shows that, so far, the pessimists have been right.  Personally, I wanted to have it both ways, and would have voted for the 3rd most popular choice "It depends on the Alternative Energy Sector."  

My picks for the most resilient sectors will be those that have the least hype about them, especially energy efficiency, as always.  So far, I've been wrong about that; the first four stocks above are all energy efficiency related, but they've fallen about 10% in the last 6 weeks, while the S&P has fallen only about 2% over that period.  That just makes me more interested in these stocks.  As you can see from my disclosure below, I've been waiting for a good correction before I buy... I think this one has farther to run.

Visit our Portfolio page to see how these stocks are currently doing.

DISCLOSURE: Tom Konrad  and/or his clients have positions in the following companies mentioned here: OC, UFS, PCH.

DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.

September 02, 2007

War With Iran? Buy Alternative Energy Stocks.

September is starting out as the month of speculation about a massive three day air strike on Iran

Is Bush ready to attack Iran while our troops are still trying to stabilize both Afghanistan and Iraq?  In February, administration officials were denying it.   The preparations now going on could simply be the stick part of a negotiating strategy; the bad cop to Russia's good cop.  But Bush's chances of successful cooperation with Putin could be better.

What if?

If Bush does launch a massive three day air strike on Iran, what will that mean for alternative energy stocks?  I think it would have to be favorable.  We can certainly expect the oil price to rise sharply, which tends to be good for alternative energy.  Because a war with Iran would almost certainly disrupt world oil supplies, not only from Iran but from neighboring states such as Saudi Arabia.

Of Alternative Energy stocks, the ones likely to see the greatest appreciation from a war induced oil price spike are the ones most aligned with energy security, with a lesser advantage seen by the rest.  If the region remains in turmoil for a long time (and the wars in Iraq and Afghanistan certainly point to that as a possibility) then the rest of alternative energy will probably follow.

Here is my list of the alternative energy stocks I think would benefit most from short and long term increases in the price of oil:

Batteries/Hybrids: 

Short term: Hybrid car makers such as Toyota (NYSE: TM) and Honda (NYSE: HMC) will benefit as people spooked by high gas prices buy hybrids.

Longer Term: All carmakers will be introducing efficient cars, so component makers with an advantage in efficiency such as Magna International (NYSE: MGA), as well as battery and capacitor manufacturers will benefit.  A war with Iran might cause car makers to stop waiting for better Lithium Ion batteries and just go with the tried and true NiMH batteries in a big way.

Biofuels

Short term: Ethanol from corn is lousy on the environment, but almost all the energy that goes into it is domestic.  So most corn ethanol producers will benefit.  I have mixed feelings about biofuels, but ADM is my favorite, because they have a dominant position, and produce their own feedstock. Biodiesel producers will also get a boost, for the same reason, but try to find ones which don't rely too much on the commodity oil markets.

Longer Term: Look to cellulosic ethanol companies, such as BlueFire Ethanol Inc. (OTCPK: BFRE), and ethanol from sugar companies such as Brazil's Cosan (NYSE: CZZ.)  

Coal-to-Liquids

Short term: Coal to Liquids (CTL) firms are likely to get a big short term boost because coal is domestic.

Long term: CTL may have trouble due to constraints in the domestic supply of coal.

In general technologies that can be used for transportation fuels will see big benefits, with lesser benefits being felt by electricity generation technologies.  I've declined to list hydrogen here, because I think it's not a very good transportation fuel due to its low density, the additional energy costs of compression, as well as the high cost of fuel cells.

DISCLOSURE: Tom Konrad and/or his clients have positions in MGA, ADM.

DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.

 

September 01, 2007

The Week In Cleantech August 26- August 31, 2007: Markets Closed for Blogger's Wedding

Last Week,

Jacques Diouf at Biofuel Review reminded us that biofuels are a great opportunity for the worlds poor.

James Fraser at The Energy Blog told us about Penn State's new method of converting black liquor into DME for biofuel, and Green Car Congress, told us about the partnership which is exploring commercialization.

On Monday,

Tyler Hamilton at Clean Break told us about Vinod Khosla's big bet on Concentrating Solar Power.  Excellent article, especially since Khosla slams half-measures that don't make a big difference in the global warming problem.  He also said, "I think that (enhanced transmission) is absolutely key to all renewables."  If I had Khosla's cash, I'd be putting big private equity money in CSP, too. 

Randy Udall, writing for ASPO-USA, analyzed the schizophrenic nature of the National Petroleum Council report.  

On Tuesday, 

Carlin Lee at The Daily Speculator told us to taste a sweet ERoEI with Cosan (NYSE: CZZ.)  

Larry Greenemeier at Scientific American told us about the Digitized Energy Storage Device, a type of ultracapacitor which may provide hybrid vehicles with power and improved efficiency.

On Wednesday,

Preston at Jetson Green picked out his Top Three Free Reports on Green Building Costs

On Friday,

Eric Stavitz of Barrons told us about rumors that LED maker Cree, Inc (CREE) might be bought out by GE (GE) or Phillips (PHG).  I wrote about the LED industry earlier this week.

Equity Green cracked us up with this video about that unnoticed miracle of life, coal.

On Saturday, our own Charles Morand got married. In possibly unrelated news, the US markets will be closed for three days.

DISCLOSURE: Tom Konrad and/or his clients have positions in CREE, GE, and PHG.

DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.


« August 2007 | Main | October 2007 »

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