Monthly Archives: August 2014

Interview With Nathaniel Bullard On Fossil Fuel Divestment

by Tom Konrad CFA Renewable Energy World asked me to write a commentary on Bloomberg New Energy Finance's recent report on the difficulties institutional investors are likely to have divesting from fossil fuels.  The report details how the scale, yield, liquidity, and historic growth of the oil and gas sector are impossible to match with any other investment sector. While this is quite true, much of the other coverage has missed the point.  Ironically, I thought Bloomberg News' coverage was some of the worst, because it focused on the least important aspect of fossil fuels...

Playing The Advanced Biofuel Lottery

by Debra Fiakas CFA Over the past six months advanced biofuel producers have raised $450 million in new capital.  The industry has finally gained traction after shifting focus from strictly cellulosic ethanol technologies to a mix of biochemical and renewable fuels.  Few if any of the advanced biofuel companies ‘climbed up out of the red,’ but we suspect the investors who had a chance to participate in these deals thought they had got a whiff of profits.  Indeed, Gevo, Inc. (GEVO:  Nasdaq) promised to achieve breakeven at its Luverne, Minnesota plant this year as the ethanol and isobutanol...

3 Stocks For The Coming Solar Shortage

By Jeff Siegel An impending glut of solar panels was going to be the death knell for the industry. Or at least that's how the solar bears framed the argument just a few short years ago. Today, however, it's a different story... A shortage of solar panels is now going to kill the industry. Or at least that's how the bears are framing the argument this time. Meanwhile, I'm grinning ear to ear. Because just as opportunity existed during the great solar glut, opportunity exists as the solar industry gears up for a potential shortage. So don't...

REG Sells More Biodiesel, Earnings Drop, Acquisitions Are Future Wild Cards

Jim Lane Biodiesel giant Renewable Energy Group (REGI)  is up on gallons, down on dollars as market prices weigh on results. In Iowa, REG announced net income of $10.8 million for the second quarter on revenues of $332.9M, a drop from its Q2 2013 net income of $19.6 million, and a 13% drop in revenue despite an 11% lift in gallons produced. The company noted that net income was boosted by a tax benefit of $11.9 million, recognized primarily from the release of a valuation allowance resulting from recording deferred tax liabilities related to the...

Amyris Aims For Huge Second Half

Jim Lane The Pharaohs of Farnesene continue to pick up momentum. In California, Amyris (AMRS) reported a net loss of $35.5M for the second quarter of 2014 on sales of $9.3M, with a 5.4 percent increase in sales over Q2 2013. Renewable product sales were $4.4M for the quarter, while “Recognized grants and collaborations revenues” reached $4.9M. In announcing results, the company highlighted: • End of quarter cash, cash equivalents and short-term investments balance of $90.2 million. • Lowest farnesene production costs to date and successful start of fragrance molecule production. • Addition of Braskem as a...

Hannon Armstrong’s Strong Q2 Keeps It In My Top Picks

By Jeff Siegel Hannon Armstrong (NYSE:HASI), one of my top picks for 2014, just made me very happy. Yesterday, the company announced its Q2 Core Earnings of $4.7 million or $0.22 per share. On a GAAP basis, the Company recorded net income of $2.9 million. Here are some other highlights. . . Raised approximately $70 million in April, 2014 in a follow-on offering. Increased the flexibility and expanded the capacity of its existing credit facility by $200 million. Completed more than $200 million worth of transactions, including the acquisition of a $107 million portfolio of land...

How the Don Quixote Principle Drives Solar

by Paula Mints Don Quixote by Honore Daumier via Wikimedia Commons For decades the photovoltaic industry has been driven by its beliefs, hopes, the availability of incentives, and what it is willing to ignore in terms of market realities and technological barriers. The apparent achievement of grid parity, even at drastically low margins, was hailed a victory. Continued deployment of multi-megawatt installations in the face of low margins for developers and likely gigawatts of poor quality installations has been regarded as proof of the inevitability of the industry’s success. ...

GMOs and Hain Celestial

50 Shades of Green Garvin Jabusch As I've written before, "human economies are still so far from real sustainability that even a highly idealized portfolio of our most sustainable enterprises necessarily falls short. Ultimately, the best any portfolio can do is mirror the reality of the world, and today, still, even the best representatives of sustainability can be found wanting compared to what will be required if we would like to keep society thriving indefinitely." There's no better example of the various conundrums swirling around sustainable economics than GMOs. As one institutional client, Timothy Yee of...

Convertible Solar Bonds: Trina, SunPower Stoke Fire; Ascent Descends

by Sean Kidney Trina’s $150m 3.5% 5yr convertible solar bond In June Chinese solar manufacturer Trina announced the private placement of $150m of 5 year, 3.5% convertible bonds to “institutional investors” (no details provided). Trina weren’t clear how they would use the proceeds, but they are planning to build 400-500MW of solar plants over the rest of this year. Book-runners were Deutsche Bank, Barclays, J.P. Morgan and Goldman Sachs (Asia), with co-manager HSBC. SunPower issues $400m 7yr 0.875% (!) convertible solar bond That same month SunPower announced a private placement of $400 million, 7 year, 0.875% senior convertible bonds. What...

No Longer Just Growth: Investing in Renewable Energies for Yield

by Robert Muir Given the determined investor quest for yield as the Federal Reserve maintains the benchmark Federal Funds rate at zero, and the resurgence of attention being paid to alternative energy generation, mainly solar, and to a lesser extent wind and hydro, it’s no wonder Yield Co’s have gained so much investor interest lately. In the near to mid-term, the enthusiasm may be justified. Supported by Power Purchase Agreements, energy infrastructure financing and leasing contracts, and electricity transmission and distribution concessions, all with credit-worthy counter-parties, Yield Co’s are designed specifically to pay out a large portion of...

Ten Clean Energy Stocks For 2014: August Update

Tom Konrad CFA July was a hard month for the stock market and clean energy stocks in particular.  My broad market benchmark of small cap stocks, IWM,  fell 7% and is down 2.7% for the year, while my clean energy benchmark PBW fell 9% and has slid into the red for the first time.  It is down 0.1% for the year to date.  The mostly defensive stocks in my 10 Clean Energy Stocks for 2014 model portfolio fared relatively well, but they were still...

Solazyme: Return On Dream (and ROI Next Year)

Jim Lane   Signature AkzoNobel deal expansion highlights Solazyme’s Q2 results. But there’s something more to this company than the cash that sustains it, though sustain it cash does, and necessarily so. In California, Solazyme (SZYM) and AkzoNobel announced that they have expanded their multi-year agreement with supply terms targeting 10,000 MT annually of algal oils for a new proprietary surfactant and with funding for the joint-development. The parties said that they expect Solazyme’s algal oil to replace both petroleum- and palm oil-derived chemicals. Product development is expected to commence immediately, and the parties anticipate...