Monthly Archives: May 2016

Yieldcos: Boom, Bust, and (Now) Beyond

The Yieldco model is not broken. But investor expectations have changed. by Tom Konrad Ph.D., CFA The Yieldco bubble popped almost exactly a year ago after a virtuous cycle turned vicious. Last May, I explained how these public companies (which own solar farms, wind farms and similar assets) could grow their dividends at double-digit rates despite no internal growth or retained earnings. This “weird trick” can work so long as the Yieldco’s stock price is rising, allowing it to sell stock at higher valuations and increase the amount of money invested per share. As long...

FutureFuel: Still Future, Less Fuel

by Debra Fiakas CFA The last post “From Fuel to Fudge” discussed how the old Solazyme developer of algal-based renewable fuel has been transformed into a new company called TerraVia, (TVIA) which is pursing algal-based food and personal care products.  Solazyme is not the only renewable fuel company to make an about face.  Granted FutureFuel Corporation (FF:  NYSE) has not changed its name or stock symbol like Solazyme.  However, its ability to produce specialty chemicals has given FutureFuel an alternative to biofuels and its early plans to build a plant that could eventually produce 160 million gallons of...

KiOR: The Inside Story Of A Company Gone Wrong, Part 2

by Jim Lane Note. This is Part 2 of our series on the inside true story of KiOR. In part 1 of our series, here, we explored: the formation of BIOeCON and KiOR, the problem of too much oxygen and coke, the entry of Khosla Ventures, and the loss of a CEO. Also, “a recipe for technical failure”, disastrous pilot scale results, culture clashes, catalyst development, reactor design trouble and the departure of a key scientist. Two KiOR scientific wings emerge No one was more emphatic about the pilot plant results than scientist Robert Bartek,...

KiOR: The Inside Story Of A Company Gone Wrong

Jim Lane Not long ago, KiOR quietly re-named itself Inaeris Technologies and launched a modest website which discussed the technology and management in little detail, but focused to an extraordinary extent on a declaration of values. Empowerment, honesty, fairness, “lessons learned from our collective experience” and so on. Warm, kindly Hallmark Card sentiments, universally popular, admired and vague. Not the bold, We-Are-Black-Swans, detailed descriptions of yields, costs, downstream partners, brand-name board members and timelines to commercial scale that had been the style of the Old KiOR. Old KiOR was exciting, dramatic,...

From Fuel To Fudge

by Debra Fiakas CFA This week the last reminder of the renewable fuels business that was once called Solazyme will be gone.  The old Solazyme has abandoned the goal of producing renewable fuels using the oils from algae.  Instead, under a new name TerraVia, the company is directing its algae cultivation and harvesting knowhow toward growing edible algae for food and personal care products.  To make the change complete the old stock symbol ‘SYZM’ gives way this week to a new trading symbol ‘TVIA.’ No doubt there is more than just a little hope in Terra...

Canadian Solar Boosts Outlook; Yingli Hopes For Sale

Doug Young Bottom line: Canadian Solar’s raised revenue guidance hints at rising prices and could signal upside for the company’s profits, while YIngli’s latest signals may show it’s trying to sell itself to a healthier rival. The strongest and weakest players from China’s lively solar panel sector are in the headlines today, with superstar Canadian Solar (Nasdaq: CSIQ) and the struggling YIngli (NYSE: YGE) both releasing their latest quarterly results. But whereas Canadian Solar has just announced its financials for this year’s first quarter, including a raised revenue outlook for 2016, Yingli is just now releasing its...

The Worst Waste

Jim Lane Peter Brown of FFA Fuels, promotes his company these days with the pithy slogan, “Fuels from the Worst Waste Around.” Which of course raises the legitimate question, what is the worst waste, and can we find a use for it? Discussions of worst waste will usually focus on the obvious say, landfill or the odious say, medical or nuclear waste. Toxicity and longevity are typical concerns, and that’s one of the reasons why nuclear energy remains controversial to this day. No Waste in Nature As LanzaTech’s Jennifer Holmgren observed in a recent article by...

Chinese Green Subsidies: When Lifting All Boats Becomes Bailing Them Out

Doug Young Bottom line: Strong response to Tesla’s latest EV in China and a major new solar plant plan from SolarReserve reflect Beijing’s strong promotion of new energy, which is also creating big waste by attracting unqualified companies to the sector. A series of new reports is showing how Beijing’s strong support for new energy technologies is benefiting both domestic and foreign companies, as China tries to become a global leader in this emerging area. But the reports also spotlight the dangers that come with such aggressive support, which often leads to abuse of subsidies and other...

Right About Tesla, Wrong About Yingli

Doug Young  Bottom line: Beijing should promote cutting-edge companies like Tesla that can help advance its new energy agenda, while abandoning ones like Yingli that use old technology to make cheap copycat products. Two green energy stories were in the headlines last week, spotlighting China’s drive to become a global leader in the new technology and also the right and wrong ways to achieve that aim. An item involving US electric vehicle (EV) powerhouse Tesla (Nasdaq: TSLA) represented the right approach, with reports that the company might near a deal with Beijing to build a manufacturing plant in China....

Aemetis acquires Edeniq for $23.7M

Jim Lane In California, Aemetis (AMTX) will acquire all of Edeniq’s outstanding shares in a stock plus cash merger transaction. In 2015, Edeniq generated approximately $20 million in revenue and $6 million in positive EBITDA. Headquartered in Visalia, California, Edeniq has 30 employees working at advanced research and development facilities, as well as pilot plants funded through grants from the DOE and the California Energy Commission. Under the terms of the agreement, Aemetis expects to issue between one and two million shares of its common stock (depending on whether Edeniq stockholders elect to receive part of their consideration...

The BioEconomy Earnings Season Roundup: REGI, GPRE, BIOA, ADM

Jim Lane Q1 earnings season for the advanced bioeconomy kicked off this week, with reporting from Green Plains, ADM, REG, and BioAmber. That’s an ag giant, an ethanol monster, a biomass-based diesel dominator and a fast-upcoming renewable chemicals maker. Between the four, we have a good opportunity to check the sector’s health. Overall, markets were unhappy today, knocking down BioAmber 10 percent, while Green Plans took a 6 percent tumble, and REG and ADM were both down, though by lesser amounts. The oil price environment, not pretty today, provided most of that shareholder joy. The Digest’s Take Ethanol,...

Ten Clean Energy Stocks For 2016 Spring Forward

Tom Konrad CFA March and April were months of recovery for the broad market and for clean energy income stocks, but most clean energy stocks failed to participate in the rally.  By design, my Ten Clean Energy Stocks for 2016 model portfolio is heavily weighted towards income, recovering 9% in March and 6% in April so that it is now back in the black, up 0.8% year to date.  This puts it ahead of its benchmark, which is down 0.8% through the end of April. I want to thank Aurelien Windenberger...

First Solar’s Surprising Strategy Switch

by Paula Mints CdTe and crystalline manufacturer and project developer First Solar (FSLR) announced positive results for Q1 as well as a switch in strategy emphasis from deployment to module sales. Honestly, revenues, positive net income and other financial metrics matter less in this case than the company’s strategy switch to module sales. Downward price pressure and margin compression along with continued aggressive pricing from China makes this move confusing. Cost leadership is mutable in the PV industry and it is difficult to imagine that First Solar will have an advantage in this regard for long. ...