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1. Trina, Unloved Child, Can Do No Right
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2. Bill Clinton: 10 Things the U.S. Government Should Do For Clean Power
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3. The Daily Sprout
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4. Traders Start Snapping Up U.S. Carbon Futures On The Cheap
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5. Green Energy Preps for Thin-Film
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6. Southern California Edison Signs 900MW Wind Deal
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7. T. Boone's Clean Energy Fuels Buys Texas Trash-to-Gas
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8. "Clean Coal" Lobbying Jumps to $4.65M
Trina, Unloved Child, Can Do No Right
Kevin Kelleher - Big Green
Lots of children grow up with disapproving parents — the unloved child is the staple of TV and movie dramas. That movie-of-the-week cliche is now playing out on the U.S. stock market, where Trina Solar (TSL) saw its earnings more than double. Trina’s net profit for the second quarter was $17.1 million, or 68 cents per American depository share, which in light of the $7.4 million, or 32 cents per ADS a year ago, is exactly the kind of earnings performance that a lot of companies in the banking, consumer goods and most other sectors would spill blood (maybe even their own) to have right now.
The stock market’s response? Trina’s shares, which bumped up as high at $32.43, or 4.7 percent above their close on Friday, slumped down to end Monday at $30.14 — down 3 percent after all was said and done.
What are the parental investors waiting to see before they start applauding their approval? In short, they’re tired of being disappointed because of their own outsize expectations. Last year, solar stocks could do no wrong. This year, it’s the opposite. Earnings not quadrupling, or even tripling? It seems if you’re not inflating a new bubble, it’s an occasion for shame.
Sure, there are threats of fewer subsidies from governments in Spain and the U.S., so it’s not surprising that solar earnings in recent months have been greeted with extreme caution. But the past week has brought news of a major, influential utility turning to solar energy in a big way. PG&E’s deal with SunPower has buffeted up SunPower’s stock and should have rallied others. But investors, accustomed to the chimera of the credit crunch on their backs, remain bearish.
Trina’s earnings came in below analyst expectations, but a good part of that was caused by forex losses and the discontinuation of a Chinese polysilicon project. Its revenue comes partly from Spain, but mostly from other European countries. Its biggest customer in 2007, IBC Solar, is based in Bavaria.
The truth is Trina did pretty well. Not good enough to justify a bubble. But good enough to argue that the long-term promise of solar energy is still on track. The bad news: If you bought solar in 2007 looking to become a millionaire overnight, you were too optimistic. The good news: If you pick your spots in mid-2008 among solar stocks, evidence is mounting slowly, but surely, that it may work out.
Bill Clinton: 10 Things the U.S. Government Should Do For Clean Power
Katie Fehrenbacher - @NYT
The speech, which was followed by a Q&A with John Podesta, the President and CEO of the Center for American Progress Action Fund, provided some of the more innovative and forward-thinking policy ideas we’ve heard to date. Clinton emphasized the fact that the new clean energy economy has to deliver “good economics,” and if we aren’t convinced of the positive financials, we won’t be able to convince other countries to join us. So what’s the federal government’s role in ensuring all that? — Here’s Clinton’s top ten suggestions:
1). Congress must pass legislation that puts a price on carbon, and establishes a cap and trade system. The alternative is passing a carbon tax, but Clinton says he tried that route already and it didn't work out too well.
2). We need to renew and lengthen the tax credits for clean energy. The time frame needs to be longer than 3 years — more like 6 to 10 years. That is the only way to stimulate enough production of clean energy technologies.
3). It’s important to figure out the federal government’s roll in modernizing the electrical grid, including both efficiency and carrying capacity. The grid wastes a lot of energy moving power, given the wind blows and the sun shines in places where a lot of people don’t live. Tax payers should also be able to split the cost of modernizing the grid with utilities.
4). Utility decoupling should be federally mandated. That’s what California has done on a state level, separating its utility profits from electricity sales, and has thus become one of the most efficient energy states in the nation. While this has been an issue for the states, Clinton says the federal government should take on this task.
5). We should have legislation to accelerate replacing traditional incandescent lighting with LED lighting. This could save us the equivalent power of a dozen power plants over the next 20 years.
6). On the production side we need to continue to fund carbon capture and storage projects. China is bringing on a new coal plant every 10 days or so, so we need to figure this out.
7). We need to accelerate the move from corn-based ethanol to more sustainable biofuels. The conversion ratio is twice as good, but the enzyme process is twice as expensive. Many of the corn ethanol plants can be easily modified to produce cellulosic ethanol from the waste of farm crops. We can’t continue to raise the price of food and skew production patterns. It seems worth it to have differential tax incentives to do this right.
We should consider doing a joint investment with Brazil, potentially in the caribbean, which would import sugar cane-based ethanol into the U.S, but it would not be subject to the tax that is placed on the rest of Brazilian ethanol. It might not be politically feasible, Clinton added.
8). We should have a program to shut down urban landfills and use them for either waste heat or fertilizer. The green house gas coming out of landfills is methane, which is pretty bad. We do a lot of work around this area with my foundation. Organic landfills should just not be there — it’s bad for global warming, and it’s a public health nightmare.
9). We need to accelerate the move to hybrid and electric vehicles and also modernize our railway system. After our party lost, we were seceded by a group that thought high speed rail was virtually closet communism.
Biofuels are also just a transition to electric and hybrid cars. We have this electric vehicle technology today, and it’s made in America. The technology would probably require larger tax credits, but it would be worth it because the prices for electronics would immediately drop — think the iPhone or a flat screen TVs.
10). We need to demonstrate to the rest of the world that this is not an affectation for rich countries — that this is as big an opportunity for developing counties as it is for wealthy countries. The most popular thing the US has done is its work with AIDs and Malaria, including work done by the Gates and our Foundation. We need to also use this model for what we could do for clean energy development in the developing world.
The Daily Sprout
Craig Rubens - Misc
Corruption in the Wind?: In upstate New York the permitting and zoning laws are controlled by the same people who sell concrete to the wind farms developers - NYTimes.
Big Blue Launches “Green Sigma”: IBM has launched Green Sigma, a new consulting practice focused on reducing energy and water usage by using networked sensors and data analysis software - CNET.
“More Energy-Efficient Ethanol”: Researchers at Washington University are taking a cue from breweries in an effort to reduce the energy costs of ethanol production; oxygen-less vats of bacteria can produce methane to help power the process - MIT Technology Review.
House Majority Leader: “Let’s Invest in Clean Energy”: House Majority Leader Steny Hoyer (D-Md.) opines in an op-ed in the Wall Street Journal today on what he’d do with a hypothetical $10 billion dollars - WSJ.
Une Campagne Anglaise Pour Tesla: The Tesla Roadster has been visiting some European prospects including Richard Branson and Jay Kay of Jamiroquai. Zut alors! - Tesla Blog.
Traders Start Snapping Up U.S. Carbon Futures On The Cheap
Craig Rubens - Policy
The soft launch reveals some of the obstacles a cap-and-trade scheme must overcome. The RGGI (say “Reggie”) scheme covers only emissions from power generation and sets initial caps higher than historical levels — 188 million tons per year from 2009 to 2014, declining by 2.5 percent per year for four years. Already analysts are predicting that the high caps will keep prices low for at least the first six years. This is a problem that plagued the vaunted European Trading Scheme in 2006 and caused a collapse of carbon prices.
Pricing of carbon permits is a sticky bit of business and is directly related to the number of permits issued. The benevolent invisible hand is supposed to find the appropriate price for the permits but so far carbon prices on markets all over the world have been too low to effect real reductions. Deutsche Bank analysts estimate that it will take carbon prices of at least €35 ($51.58) a ton to get power companies to switch from dirty coal to cleaner natural gas in the European market. On Friday the RGGI permits were traded at $5.58 per ton of avoided carbon dioxide, while the EU market was trading at €23.6 per ton on Monday morning.
RGGI isn’t the only regional consortium of states to plan for a cap-and-trade system. The Western Climate Initiative, a group of seven states and four Canadian provinces, issued a draft of its proposed plan to institute a regional cap-and-trade system last month. The group's proposal would have states start monitoring emissions in 2010 and reporting them in 2011 in preparation for a cap on carbon emissions starting in 2012. The WCI’s goal is to cut emissions 15 percent below 2005 levels by 2020.
Pay attention to the operations of these nascent markets, as they will likely grow into national schemes when the next administration moves to institute a federal cap-and-trade system on carbon emissions, which both candidates have said they endorse.
Green Energy Preps for Thin-Film
Craig Rubens - Big Green
Less than a month after Green Energy Technologies signed a deal for a thin-film solar module production line from Applied Materials, the company says it has already received requests for four times its expected capacity next year, Bloomberg reports. The solar silicon-wafer maker, a subsidiary of Taiwanese Tatung, plans to leverage the technology of LCD-maker (and fellow Tatung affiliate) Chunghwa Picture Tubes to begin manufacturing its amorphous silicon thin-film product in December. Production capacity is scheduled to reach 30 megawatts by February of 2009 and 50 megawatts by the end of 2009.
While the company also announced it had signed an eight-year, $947 million contract with undisclosed partners in Australia and Asia, the company’s shift from traditional silicon PV to thin-film is motivated by the promise of higher gross profit margins. While the price per watt of a traditional crystalline silicon solar module is about $3.80, Green Energy estimates it can make thin-film solar for around $2.80 a watt.
This is still significantly higher than the $1 a watt Holy Grail of grid parity. But with increasingly large players moving to get a slice of the thin-film pie, will there be space for small, venture-funded startups like Nanosolar in the market? Intel just threw its hat into the ring by spinning off SpectraWatt with $50 million in venture funding, as well as investing $37.5 million in German thin-film player Sulfurcell. But the pie is big and expected to get bigger. It’s estimated that thin-film PV could grab 28 percent of the solar market by 2012, representing some $19.7 billion in sales in that time frame.
Southern California Edison Signs 900MW Wind Deal
Craig Rubens - Energy
Last year, renewables made up 16 percent of SCE’s total portfolio, and the utility has other massive wind-power contracts lined up that could boost that percentage even further. Back in 2006, the utility signed a contract with Alta Windpower Development for 1,500 megawatts of wind energy — at the time, the largest wind energy contract in the U.S. The farm is slated to cover 50 square miles in the Tehachapi area of California. However, progress on the project has been slow. SCE tells us it has only recently broken ground on the Tehachapi Renewable Transmission project, which will eventually bring power from the Alta wind farm to market. SCE says the first three (of 11) segments of the transmission project are scheduled to start delivering power from a number of wind projects in the area during 2009.
California’s renewable portfolio standard requires that 20 percent of a utility’s electricity come from renewable sources by 2010. This has led California utilities Pacific Gas & Electric and San Diego Gas & Electric, in addition to SCE, to line up all the long-term renewable energy contracts they can. PG&E just locked in 800 megawatts of solar power on Friday in two huge agreements with Optisolar and SunPower. Demand from the utilities is outstripping the supply of utility-scale green power generation, leading PG&E to look into owning and operating its own solar power plants.
Photo courtesy NREL PIX
T. Boone's Clean Energy Fuels Buys Texas Trash-to-Gas
Katie Fehrenbacher - Energy
Given that Clean Energy Fuels has yet to turn a profit, the company is turning to other sources to help with the purchase, including a (Update: Sorry about that guys, we corrected this) Clean Energy Fuels is using $19.1 million in cash from Camco International for the purchase, a $30 million credit facility from Dallas-based PlainsCapital Bank to help with both the acquisition and future capital investments in the landfill. Landfill gas developer Cambrian Energy already owns 30 percent of DCE, and Clean Energy Fuels says it will “partner” with the firm on the deal.
The decomposition of organic matter produces natural gas, which can be cultivated through landfills rigged with efficient gas collection infrastructures. The McCommas Bluff landfill is owned by the city of Dallas, which actually plans to close the landfill itself in 2042. The group estimates the site will continue to produce methane up to 30 years after it’s closed. Even for that time frame it’s still valuable, and with the price of oil still at record levels, investors are eying alternative sources, like landfills, for natural gas.
Late last year Energy Investors Funds and Enpower Corp. bought Landfill Energy Systems, which owned, operated and serviced 22 landfill gas projects that kick out 80 MW and 60 million cubic feet of gas a day. And one of the larger waste management companies, Waste Management Inc. (WMI), has been working to expand the 17 waste-to-energy plants it runs through its subsidiary Wheelabrator.
Clean Energy Fuels can likely use the trash-produced natural gas in its fueling distribution system. The company owns 170 natural gas fueling stations in 12 states in the U.S., and in British Columbia and Ontario. And last April 2008, the company opened its first CNG station in Lima, Peru, through the company's joint venture, Clean Energy del Peru.
In Clean Energy Fuels latest quarterly filing it actually states that it has various plans to raise funding for acquisitions:
We may also seek to acquire companies or assets in the natural gas fueling infrastructure, services and production industries, and we will have to raise additional capital as necessary to fund any such acquisitions, which are not budgeted for in our 2008 business plan.
We’re not sure how much gas the landfill can add to Clean Energy Fuel’s distribution, but it does make the fuel more eco-friendly. While natural gas is cleaner than burning gasoline to run cars, it’s still a fossil fuel with a constrained supply — in contrast to gas from landfills, which is fuel from waste. Producing dollars from trash is an equation we’re sure Pickens likes a lot.
"Clean Coal" Lobbying Jumps to $4.65M
Katie Fehrenbacher - Energy
The lobbying arm of coal-reliant companies that are calling for “cleaner coal” jumped up to a sizable $4.65 million for this year, according to recent data from the Center for Responsive Politics. The figures for the American Coalition for Clean Coal Electricity (ACCCE) lobbying group previously showed that the group had spent $1.87 million for the year — the new figures indicate that it has more than doubled its lobbying efforts for the year.
The ACCCE’s most recent lobbying efforts make up a substantial portion of the total amount spent on lobbying to date for the entire sector classified as “alternative energy production and services” — a little less than a third of $14.94 million sector total. Joe Lucas, VP of Communications for the ACCCE, told us the firm was new to direct lobbying so the funding was to help get those efforts established, and that the efforts wouldn’t necessarily represent a pattern. He also said that a large portion of the funding was spent on opposing the Lieberman-Warner Bill, because it didn’t “preserve the integrity of the energy supply system.”
Though the group’s $4.65 million lobbying investment is its largest lobbying figure to date, and it appears to be a trend. The organization itself isn’t listed as spending on lobbying prior to 2008. But the group “Americans for Balanced Energy Choices” — which is one of two groups that is listed as one the predecessors of the ACCCE — has spent on lobbying in the past. ABEC, which is categorized under the “mining” sector spent $3.02 million in 2007, $2.56 million in 2006, and $1.99 million in 2005. So while the ABEC’s lobbying ended in 2008, the newly formed ACCCE has taken over the role — so, it’s not entirely new to the business. And also appears to be ramping up its lobbying efforts.
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