On Tuesday, Todd Woody at Green Wombat told us the the clock was ticking on the crucial solar investment tax credit. When the solar ITC was dropped, the potential impacts were unclear although many folks had a good idea of what might happen. It now seems as though this is indeed throwing a spoke in the wheel of more solar development in the US, although industry leaders apparently remain sanguine. Given the amount of debt financing solar developments typically get, throw on top of ITC concerns high levels of uncertainty in capital markets over the direction of the economy (for at least the first half of 2007), and you have a perfect storm in terms solar financing drying up. We’ve recently argued that 2007 could be a bear year for solar…to be continued! On Wednesday, BCC Research argued that the global market for electric energy storage would be worth $3.8 billion by 2013. A gentle reminder that large-scale energy storage is one of the biggest challenges facing North American power grids at the moment, especially as more renewable energy is brought on stream. But besides renewable power, effective large-scale storage could go a long way in dealing with base/peak fluctuations cleanly and cheaply. Regular readers know that both Tom and I like large-scale storage a lot, and these numbers seem to confirm our hunch. On Wednesday, Keith Johnson at the WSJ’s Environmental Capital informed us that alternative energy was coming of age. The Iberdrola Renovables IPO did indeed mark a turning point in the world of public alternative energy firms – the emergence of pure play renewable energy behemoths. On Thursday, Renewable Energy Access informed us that Acciona (ACXIF.PK), the Spanish wind power heavyweight, had received its first wind power contract in Canada. This news came a week after the company had announced the opening of its first wind turbine manufacturing facility in the US. On Wednesday, Repower System AG (RPWSF.PK) announced its intention to open a turbine facility in Canada. 2007 saw growing activity by large foreign wind players in the North American market, and it is fair to say that North American really has become the world’s new ‘wind frontier’ (at least for the time being). What’s the significance of this? Just as the European wind power boom is waning, many of those firms are now finding new growth pipelines that will carry them through the next few years until Asia really takes off. You can also expect a continuation of the intense consolidation activity that’s been the norm over the past two years. Find small publicly-traded firms with wind development rights and you have good plays on this consolidation – for this, however, you will mostly have to look on the Canadian side of the border. On Saturday, Alex Steffen at World Changing showed us what happens when Big Oil starts to scenarize about climate change. Given the degree to which companies such as Shell influence energy policies, this is interesting insight in how they see things develop over the next few years.
