Industry General

Charles Morand Tom and I recently received complimentary copies of a new book called "Investment Opportunities for a Low Carbon World", edited FTSE Group's Director of Responsible Investment Will Oulton*.  The book is a compendium of articles by 31 different authors broken down into three main categories: (1) environmental and low-carbon technologies; (2) investment approaches, products and markets; and (3) regulation, incentives, investor and company case studies. While Tom will provide a comprehensive review of the book once he's finished reading it in its entirety, I will instead review a few selected chapters over...

Charles MorandIt seems as though the darkest clouds are finally dissipating over alt energy's financing horizon. Over the past few weeks, money has started flowing into the sector again, as evidenced by a number of recent deal announcements: On June 9, I reported on the upcoming IPO for Magma Energy Corp., a geothermal exploration company. The IPO's size will be upped from an initial C$50 MM to C$100 MM, a sign of increased market appetite  SunPower Corp. raised $418 MM in early May through a share and debt offering, and recently announced it had reached a $100...

Renewable Electricity cost estimates from a California transmission study and the investment implications. Tom Konrad, Ph.D., CFA The seemingly simple question, "How much does wind/solar/geothermal/etc. cost per kWh?" can be surprisingly difficult to answer.  Advocates often cite particularly low figures, but they are often based on particularly favorable conditions, or analyses that don't include all the costs (for instance, costs of permitting.)  Opponents do the opposite, often assuming particularly unfavorable conditions, or adding in costs which they would never consider adding in for their favored technology.  Adding to the confusion, levelized cost of generation calculations are very sensitive to...

Tom Konrad, Ph.D. I recently moderated a panel on Financing Renewable Energy for the Colorado CFA Society.  I took down choice quotes, with the plan of using them on Alt Energy Stocks' new twitter feed.   I ended up with enough material for a short article. My panelists were Garvin Jabusch, COO of Green Alpha Advisors, a green-focused investment advisory firm in Boulder; David Gold, a partner at Access Venture Partners, and manager of their Cleantech investments, and Brian Greenman, of Greenman Financial Advisors, who does project development and finance for community wind developers.  The broad range of perspectives seemed...

A comparison of the charts for clean energy ETFs and broader market ETFs seems to show that, clean energy funds have, if anything, underperformed the market as a whole in recent months.  Nevertheless, the quarterly performance update for my 10 Clean Energy Stocks for 2009 showed my picks strongly outperforming the market, although the much riskier 10 Clean Energy Gambles was only performing in-line with the sector indices. It's unlikely that my picks are due to stock picking skill.  My personal experience has shown that I'm much better at picking sectors than individual stocks: my strength is in spotting...

Two months ago, Tom told us how he'd dipped a toe into the black stuff (i.e. bought the OIL etf) on grounds that current supply destruction related to the depressed price of crude oil would eventually lead to the same kind of supply-demand crunch that led oil to spike during the 2004 to mid-2008 period. If you need evidence that the current price of crude is wreaking havoc in the world of oil & gas exploration, look no further than Alberta and its oil sands. The oil sands contain the second largest oil reserves in the world after...

Last week, Jefferies & Co. held its Global Clean Technology Conference. Unsurprisingly, the tone wasn't as optimistic as in previous years, with cash and funding worries top of mind. Nearly two months ago, I discussed some tangible signs pointing to looming problems in the industry. However, despite all the gloom, it seems as though several firms (and investors!) are expecting the American Reinvestment and Recovery Act (ARRA) to provide the industry with a lifeline. But will this really be the case? For one thing, the major environmental spending programs in the ARRA are relatively...

Last month, I wrote about how Ontario, North America's 6th largest jurisdiction by population, had tabled a Green Energy Act to boost the alternative energy industry's growth in the province. In that post, I mentioned that officials would soon release the rules for a feed-in tariff (FIT) system. FITs, which pay fixed rates for renewable power, are all but absent in North America, although they are popular incentive in Europe. Germany's FIT is largely responsible for that country's dominance in solar PV today despite mediocre sun conditions.  Ontario released the draft rules and proposed prices for...

It is fair to say that most people continue to equate the terms "alternative" and "energy" with expensive, unreliable and plain unpractical. This naturally leads a majority of people to view alternative energy investing as a high-risk play on some unproven technology with an uncertain probability of success. This is a perception we've tried to dispel on several occasions, whether we were talking about blue chip alt energy stocks, dividend alt energy stocks or utility alt energy stocks. It's also fair to say that most people don't typically associate value investing and, by extension, ...

Dedicated legislations have been at the core of some of the most impressive regional growth stories in alternative energy, most notably in Germany with the Renewable Energy Sources Act or in California with the various legislative solar initiatives. On Monday, the Canadian province of Ontario became the latest jurisdiction to join the fray as lawmakers introduced the Green Energy and Green Economy Act. Why should investors care? Because such legislations have been at the core of some of the most impressive regional growth stories in alternative energy.  As a bit of a backgrounder on Ontario, there...

On Friday, the House of Representatives and Senate passed H.R. 1, the American Recovery and Reinvestment Act of 2009 and sent the bill to President Obama for his signature. The impact on companies that manufacture advanced batteries and other energy storage devices will be staggering. The principal energy storage appropriations include: $2,000,000,000 for grants to manufacturers of advanced battery systems and vehicle batteries that are produced in the United States, including advanced lithium ion batteries, hybrid electrical systems, component manufacturers, and software designers;  $4,500,000,000 for grants for “Electricity Delivery and Energy Reliability” including activities to modernize the electric...

Alt energy investors figured out early on in this crisis that a widespread shut-down of credit markets coupled with a substantial re-pricing of risk would not bode well for the industry. That's why alt energy stocks have outdone the overall market to the downside over the past year, with the iShares S&P Global Clean Energy Index (ICLN) down more than 60% Vs. the S&P 500 loosing a little under 40% over the same period. Much of this carnage occurred before any real impacts on alt energy had been felt (current prices in equity markets are generally forward- rather...

The public relations firm Waggener Edstrom released a survey of investors and analysts yesterday seeking opinions on what was in store for alternative energy for 2009 (link to the survey at the end of this article). Of the 81 respondents, 47 were institutional investors, 26 were brokerage analysts, five were from independent research firms and three were classified as "Other industry participants". Overall, 58% of respondents were from the buy side, 32% from the sell side and the remainder from "Other". Here are a few tidbits that caught my attention. Storage: The Next Boom? Overall, 50% of respondents expect...

When I began writing about clean energy investing in 2006, my competition was sparse.  The quality blogs with industry heavyweights were either not focused on investing, or were primarily focused on venture capital.  Now the world has changed.  I keep finding new blogs and writers with a strong focus on both clean energy and public companies.  Here are a few I'd like to share with readers: Dedicated Blogs Energy Tech Stocks - Three articles a day can be a little daunting, but that's what happens when you try to cover everything. Camino Energy - Their PurePlay indices are a...

As I've discussed previously, things haven't been easy of late for alt energy stocks, especially those of the pure-play kind. A few days ago, I was asked which, if any, alt energy stocks I could recommend in this environment. My answer was: none. While people continue to go on television claiming that alt energy's problem has to do with falling oil prices, in my view the real risk at the moment has do with financing - financing for the companies producing the technologies and financing for their customers. The two business models are simultaneously under attack: for...

We wish to apologize for the lack of posting in the past few days. Tom has been on holidays and I have been very busy with work. We will be back with our normal posting schedule tomorrow. Best, Charles