The Week in Cleantech (Feb. 17 to Feb. 23) - Does The Residential Real Estate Sector Hold The Climate Change Key?
On Monday, Richard T. Stuebi at the Cleantech Blog gave us the heads up on a McKinsey Global Institute study on energy 'productivity' (read efficiency). MGI makes an good case for policy-makers to pay more attention to energy efficiency, and the authors outline what investment commitments would have to made in different sectors for their ideal scenario to be realized. One interesting insight - the residential sector would be near the top at 25% of investment flows. Are retail energy efficiency solutions one piece of regulation away from taking off?
On Tuesday, Nick Hodge at Seeking Alpha told us about how to invest in BIPV companies. If one believes that the MGI's masterplan for energy productivity (discussed above) has a good chance of being implemented, than the BIPV sector would be a huge winner. Another funny coincidence: one the global leaders in this space just got smashed for margin, inventory and guidance hiccups. Can you guess who that is? This could be a good time to look at picking some up on the (relative) cheap.
On Wednesday, Energy Tech Stocks argued that the chance of a disastrous drought in the U.S. southwest presented a huge opportunity for utility-scale solar firms like Ted Turner’s. It's no mystery that the once mighty rivers of the US west aren't so mighty anymore - so could the lost hydroelectric potential be recouped through massive solar developments? That's certainly a possibility and I'd go further and argue that, given yet unresolved variability and storage issues with solar PV, CSP is what you should really be interested in if you think the west is going solar for its baseload needs.
On Wednesday, Climateer at Climateer Investing told us about an interesting article that wonders whether massive railroad infrastructure will fundamentally change US transportation logistics. Railroads could be one of the great winners of tightening environmental standards, rising fuel costs and chronic traffic problems in most of North America's major urban areas. Of course, this isn't 1873 anymore and one doesn't build a railway where ever one feels like it. But because hardly any money has gone in the railroad network since 1873, upgrades alone could provide some interesting opportunities. Look for the suppliers.
On Thursday, Keith Johnson at the WSJ's Environmental Capital told us about a new carbon market. I've been keeping an eye on the little Massachusetts-based, Toronto-listed company discussed in this article for a couple of years now because of my interest in environmental markets. While I think that what these guys are doing is very innovative, I am a little concerned about crowding out. America's environmental markets (i.e. NOx/SOx, RECs, etc.) are neither especially large nor especially liquid. While the advent of carbon trading and the growth of the RECs markets could change that dramatically, it is unclear whether everyone will be able to play this game profitably. At the end of the day, in the exchange business, scale and reputation drive business which drives liquidity which drives efficient prices which drive more business, although the World Energy folks don't view exchange-based trading as an optimal solution (hmmmm...I wonder why that might be). At the other end of the spectrum, the more established brokers will drive a lot of the OTC business. While the entry of NYMEX into this sector boosted confidence that carbon trading is indeed be on the horizon for North America, it also made that whole space a lot less attractive for existing and potential competitors.