Renewable energy is still very much in its infancy, which means that companies in the space are either profitless or high-multiple startups, or divisions of much larger companies (GE Wind (NYSE:GE), or utilities such as FPL Group (NYSE:FPL) and Xcel (NYSE:XEL) which get much of their power from conventional generation.) This presents a dilemma for investors who understand the compelling drivers for the sector, but whose risk tolerance or financial needs indicate an income-based investing strategy.

Canadian Income Trusts in Renewable Energy

A few Canadian Income Trusts have historically gone some way towards filling this niche. These include the Boralex Power income trust (BPT-UN.TO / BLXJF.PK), Algonquin Power (APF-UN.TO/AGQNF.PK), and the Clean Power Income Fund (CLE-UN.TO/CEANF.PK).

The Boralex Power Income Fund owns an electricity generating asset mix of approximately 45% hydroelectric (by 2005 revenues), 32% wood residue (biomass) with some cogeneration, and 23% natural gas fired cogeneration. It is managed and 23% owned by its parent utility, Boralex (BLX.TO/BRLXF.PK).

Algonquin Power Trust owns a mix of hydroelectric generation (25% of sales), cogeneration (42% of sales), Alternative fuels (9% of sales), and infrastructure (24% - mostly waste disposal and treatment. Percentages based on 2005 data.) Alternative fuels (mostly landfill gas, municipal solid waste, and some wind) comprise the fastest growing segment of the portfolio.

Finally, the Clean Power Income Fund, which trumpets itself as "the first income fund to be certified under Canada’s Environmental Choice^MProgram," owns a mix of electricity generation assets consisting of landfill gas (37% based on 2005 cash flow), biomass (27%), hydropower (26%), and wind (10%). They are completing the Erie Shores 99MW wind project which will increase the wind portion of the portfolio.

Disappearing Tax Advantages

While none of these have the stability of a bond fund, they have gone some way towards bridging the gap between volatile startups and predictable income, allowing a broader spectrum of investors to participate in renewable energy. However, they were all organized to take advantage of a provision of Canada's tax code which conferred significant tax advantages, similar to the advantages enjoyed by REITs and Master Limited Partnerships in the US. Those tax advantages were scheduled to be phased out over the next four years to the surprise of the financial markets in November, and while some are still fighting the tax law changes, the trust management of these three trusts have, by their actions acknowledged the reality of the changes.

Within the last week, The Clean Power Income Fund board has agreed to be acquired by Algonquin Power, subject to the approval of its unitholders, while The Boralex Power Income Fund has announced that it is up for sale, possibly to be acquired by its parent, Boralex, which currently owns 23% of the fund and acts as its manager.

Risks and Opportunities

For the traditional income investor, primarily interested in stability, all this activity and the volatility is bad news, but it presents opportunities for the risk tolerant investor interested in purchasing solid, income producing assets, something of a rarity in retail renewable energy investing. It's impossible to say what good price entry levels are for any of these funds, but they are all considerably cheaper than they were before the tax changes were announced in November.

Prospective investors should also understand the tax implications (which depend not only on the changing laws, but on the nationality and tax status of the account used) before investing.

Tom Konrad, Ph.D.is an independent investment adviser registered in the state of Colorado who helps people reach their investment goals while protecting the environment.

DISCLOSURE: Tom Konrad and some of his clients hold positions in The Clean Power Income Trust and the Algonquin Power Trust.

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.

Posted by Tom Konrad at 11:41 AM | Permalink | Comments (0)

Internal Hydro International Inc. (IHDR) announces that it will be field testing production units of the Energy Commander V 30 Kw small hydro product. These EC V untils are able to supply a constant 30 kilowatts of constantly available electricity via the natural flows of water from dams, water pipelines, streams and rivers. [ more ]

Posted by Mark Anderson at 11:26 AM | Permalink | Comments (0)

Renewable energy like wind and solar power and hydrogen fuel cells could blossom into a $100 billion a year global market in less than a decade as technology costs fall, according to a study.

The combined market for "green" sources of energy has already grown 68 percent since 2002 to more than $16 billion last year, according to Clean Edge, a research and publishing firm based in California. [ more ]

You can view and download the complete Clean-Energy Trends report at the following link. [ more ]

Posted by Mark Anderson at 04:04 PM | Permalink | Comments (0)

ENDESA (ELE) has received authorisation to build and start up new wind farms and mini hydro plants this year, requiring an investment of Euro 286 million. The start-up of these projects, part of ENDESA's Strategic Plan, will add 277 MW to ENDESA's generation capacity, 252 MW in wind (for a Euro 250 million) and 25 MW in mini hydro capacity (for an investment of around Euro 60 million).

Facilities already under construction and expected to come on stream in 2005 include the wind farms at Pena Ventosa and Chan do Tenon in Galicia, Las Hoyuelas in Castilla La Mancha and P.E. Saso Plan in Aragon, representing an investment of Euro 144 million and overall capacity of 146 MW. [ more ]

Posted by Mark Anderson at 10:21 AM | Permalink | Comments (0)

Internal Hydro International Inc. (IHDR) announces that the Company has entered into a purchase agreement with El Tigre Development Inc. (ETIG) for the purchase of 100 Energy Commander Units. The purchase price of the 100 units will be $2,250,000.00 for placement by ETIG in the United States and elsewhere. The agreement calls for IHDR and ETIG to share in revenue generated from each unit beyond the purchase price.

The Energy Commander technology uses IHDR's patented low impact hydro technology utilizing water or gas flow from any source where pressure is present. The technology uses water or gas pressure from man made sources such as industrial or municipal flows, or natural sources such as streams or rivers wherever pressure is present and wasted. IHDR is now entering into the deployment phase of units under its business plan. [ more ]

Posted by Mark Anderson at 02:45 PM | Permalink | Comments (0)

Internal Hydro International Inc. (IHDR) is now entering the Second Phase of its business plan, which will be deployment of the company's patented energy production technology, called the Energy Commander IV (EC IV). The Company has entered into a sales agreement that will place ten units in applications in the Southwest United States, while placing other units in the Eastern United States in various areas of use. [ more ]

Posted by Mark Anderson at 09:47 AM | Permalink | Comments (0)

British Telecom has announced a three-year plan to get all of its energy needs from renewable sources - the biggest such project in the world. The electricity used, worth hundreds of millions of pounds, could power a city the size of Nottingham. Renewable sources of energy include wind, wave and solar power, rather than using fossil fuels like oil or coal. [ more ]

Posted by Mark Anderson at 09:27 AM | Permalink | Comments (0)

This November, the construction of the world’s largest tidal power plant will begin at Ansan City’s Shihwa Lake in Gyeonggi Province, and next year, the construction of an experimental current power plant will start in Haenam County at Uldol-mok. [ more ]

As an aside, this website has a great feature that allows you to listen to a text-to-speach version of this article in either a male or female voice.

Posted by Mark Anderson at 11:22 AM | Permalink | Comments (0)

New York will dramatically boost its reliance on renewable energy sources like wind and water over the next nine years under a policy approved by state regulators Wednesday.

Clean energy advocates and state officials said the action by the state Public Service Commission places New York among the leaders nationwide in the development of renewable energy. It comes 20 months after Gov. George Pataki first called for a statewide standard that would encourage the production of environmentally friendly energy. [ more ]

Posted by Mark Anderson at 08:54 AM | Permalink | Comments (0)

"Experts generally agree that our current reliance on fossil fuels is unsustainable. Already oil is near $50 per barrel, and the great millions of Chinese and Indians destined to take to the road in the next decades have not yet gotten behind the wheel."

This week Newsweek has written several special reports about alternative energy in all its forms. All of these reports can be found at the following link. [ more ]

Posted by Mark Anderson at 06:48 PM | Permalink | Comments (0)

Privately held Verdant Power is developing technology for a new type of hydropower that, unlike conventional hydropower, does not involve the use of dams. Instead, it seeks to capture ''kinetic energy" from the moving water found in tidal streams, rivers, and the ocean, and in human-made facilities such as aqueducts and irrigation canals. This project will be developed on a section of the Merrimack River in Massachusetts. [ more ]

Posted by Mark Anderson at 06:42 PM | Permalink | Comments (0)

Colorado House Speaker Lola Spradley, R-Beulah. and U.S. Rep. Mark Udall, D-Eldorado Springs, co-chairs of Amendment 37—the Renewable Energy Initiative—kicked-off their statewide campaign Thursday with stops throughout Colorado.

Amendment 37 would require 10 percent of Colorado's electricity be generated from renewable energy by 2015. The program is scaled beginning with a 3 percent requirement by 2007, 6 percent by 2011, and 10 percent by 2015. [ more ]

Posted by Mark Anderson at 05:48 AM | Permalink | Comments (0)

British engineers have succeeded in supplying electricity generated from wave power to the national grid for the first time.

A machine off the coast of Orkney has been generating electricity for a week. Its performance is being monitored by scientists at the European Marine Energy Centre. [ more ] also more about this story at [ msnbc.com ]

Posted by Mark Anderson at 05:19 AM | Permalink | Comments (0)

Internal Hydro International, Inc. (IHDR) has entered into discussions with a USA corporation, Turbine Electric Power, Inc. for the purpose of structuring an LOI between the companies.

Turbine Electric Power, Inc. holds the 'exclusive worldwide rights' to install, sell, market and distribute a new 'high tech' micro turbine electric power generator on all electric powered vehicles.

This new micro turbine will provide 'on board' continuous electric power to recharge battery systems and additional 'on demand' power directly to the electric motors of all electric powered vehicles. This turbine charging system will preclude the necessity of electric powered vehicles stopping to recharge the battery systems, thus giving these vehicles much greater range and performance with the added benefit of environmental friendly power systems the world is demanding today. [ more ]

Posted by Mark Anderson at 08:40 AM | Permalink | Comments (0)

Verdant Power plans to plunge six electricity turbines into the East River. If the $4.5-million project is successful, the generators will form the first farm of tide-powered turbines in the world.

The plan is to attach the machines, which look like small wind turbines, to concrete piles hammered into the bedrock nine metres below the river's surface. As the tide surges in and out, the heads pivot to face the current and the blades spin. [ more ]

Posted by Mark Anderson at 08:29 AM | Permalink | Comments (0)