Posted under Express 125

China & Europe Driving Appetite & Market for Electric Vehicles

Low-carbon vehicles, such as electric cars, will be a bigger global market by 2020 than renewable energy, such as wind and solar power, according to a report by HSBC bank. China is investing US$2.8bn in electric vehicles and charging networks by 2012 and while it has recently overtaken the US as the world’s biggest energy user, it is also the largest single investor in green energy in the G20 group.

Damian Carrington for guardian.co.uk (6 September 2010):

Low-carbon vehicles, such as electric cars, will be a bigger global market by 2020 than renewable energy, such as wind and solar power, according to a report by HSBC bank.

The report predicts that 8.65m electric vehicles and 9.23m plug-in and hybrid electric vehicles will be sold globally in 2020, up from around 5,000 and 657,000 respectively in 2009.

When fuel-efficiency measures and switches to lower-carbon transport such as trains and coaches are included, the report for investors predicts that the market will be worth $677bn (£440bn) a year in 2020 – up from $113m in 2009. In contrast, HSBC predicts smaller growth in the renewable energy sector, from $203bn in 2009 to $544bn in 2020.

Nick Robins, head of the HSBC Climate Change Centre of Excellence and lead author of the report, said the predicted rise of the transport sector stems from growing confidence in the area over the past year as major manufacturers launched low-carbon cars.

But he acknowledged that it has been a difficult year for the low-carbon economy, with growing signs of what he terms “carbon default”, such as the US failure to deliver a clean energy bill; Australia’s move away from climate change laws; and the economic crisis squeezing green spending. “It is not unmitigated gloom,” he said. “But it is more disaggregated than last year.”

The US failure has been quite damaging to sentiment among investors around the world, he added.

Angus McCrone, chief editor at Bloomberg New Energy Finance (BNEF) said: “There is a dichotomy between what is happening on the public front and behind that.”

Clean energy shares, as tracked by the WilderHill New Energy Global Innovation Index, has under-performed the US stock-market overall – as measured by the Standard and Poor’s 500 index – by 20% so far this year, he points out. But he also notes that BNEF predicts 2010 will be a record year for cleantech investment at between $180-200bn, a little higher than 2008′s $173bn total.

He also said that microgeneration – for example domestic solar panels – is “taking off on all sorts of places, including the UK”.

The HSBC report predicts the overall low-carbon energy market – both generation and use – will triple to $2.2tn in 2020, under its most likely scenario, but suggest it could be as low as $1.5tn if governments renege on existing climate change and energy commitments or as high as $2.7 trillion if current commitments are exceeded.

The report argues that the European Union will remain the largest market but will lose market share from 33% now to 27% in 2020, while China will gain market share, from 17% to 24%, pushing the US into third place.

Officials in Shanghai yesterday underlined China’s ambitions in green technology, announcing that they would invest $2.8bn in electric vehicles and charging networks by 2012. China has recently overtaken the US as the world’s biggest energy user, become the largest single investor in green energy in the G20 group and has been the biggest emitter of greenhouse gases for several years.

The HSBC report predicts, unlike some other analysts, that the EU will meet its target of 20% renewable energy by 2020 but will fail to meet its 20% increase in energy efficiency by the same date. It plays down the promise of biofuels, suggesting a market of $93bn by 2020, because of concerns over their sustainability. But McCrone says that after two to three years of decline the biofuels market has bottomed out and that the remaining companies can take confidence from the mandated targets for biofuel use in the EU.

Finally, the amount of upfront capital required in the green economy will more than triple to $1.5tn a year in 2020, according to HSBC. This may look large, said Robins, but not compared to the sums already needed to invest in energy. For example, the International Energy Agency predicted in 2009 that investment of $1.1trn a year (PDF) was needed until 2030 to ensure projected energy demand was met.

Source: www.guardian.co.uk

Posted under Express 125

Australia Losing Investment Opportunities in Clean Tech

Australia might have the best technology and scientists in the world, but the joint managing director of Arkx Investment Management, Tim Buckley, says the Australian market is the worst for clean energy stocks. We need a price on carbon.” This and more in a full report on the clean tech market from David Potts in the Sydney Morning Herald.

David Potts in Sydney Morning Herald (6 September 2010):

Renewables seem to be on the nose yet there are many reasons why adding them to a portfolio is a good strategy, writes David Potts.

Since the Copenhagen climate change fiasco triggered a sequence of events that deposed Kevin Rudd and led to wherever we are now, green-chip share prices have slumped.

Some of the smallest green chips are debt-free, profitable and paying dividends yet have been punished the most.

Sustainability is what they’re about, except, apparently, for their share prices.

Green chips had a brief rally in July when the Australian CleanTech Index climbed 7.5 per cent, compared with the the ASX200′s 4.1 per cent, but it’s been downhill since even though the only clear-cut message from the recent poll is that the Greens will control the senate.

Not to mention the fact that both sides support the renewable energy target for 2020.

By then the power companies must be supplying 20 per cent of their electricity output from renewable energy sources such as wind farms and solar panels.

With share prices of green chips near their lowest in three years is that a bargain or what? More what I’m afraid or, rather, watt.

The biggest and most promising green chip, despite its former life as a satellite of the collapsed Babcock & Brown, wind farm operator Infigen has reported a loss.

The US, where it has its biggest operation, wasn’t windy enough.

It’s an ill wind that doesn’t blow.

There was also less wind than usual in the west and South Australia, which, mimicking El Nino, was more than made up for where I live.

But the wind not blowing or the sun not shining seem to be the least of the problems of renewable energy stocks. They will remain a more expensive and less reliable form of energy than coal or gas until there’s a tax on carbon or some form of emissions trading scheme.

Even so, the market seems to be overlooking the critical fact that from January 1 the renewable energy targets for power generators progressively increase and, as a handy chart in Infigen’s result presentation shows, they will have to buy large-scale renewable energy certificates (LRECs) to make the target. And guess who’s selling them? Infigen and all the other wind, solar and hydro producers.

Infigen predicts LRECs will come into their own from 2014. The big electricity retailers will need to more than treble their holdings by 2020 and “only a few will build to meet their needs.”

So it’s no surprise that Infigen – despite a high debt load, which it’s running down and making a loss – features high on the list of green chips worth having.

It even pays a 2¢ a year dividend and has a $227 million cash balance.

Like most renewable energy stocks Infigen isn’t trading much higher than its low point of 53¢ a share.

“This isn’t a bad time at all to be buying these stocks,” says the managing director of Ethinvest, Trevor Thomas. Ethinvest is Australia’s oldest financial planning company specialising in green chips.

“They don’t build unless they have a supply contract so there aren’t development risks and technology is improving all the time,” he says.

Ethinvest recommendations are tailor-made but some stocks keep recurring, including Infigen and its rival Origin, which has both solar and wind farms.

But top of the list is Sims Metal. “It’s the largest recycler,” Thomas says. “It does what BHP does except uranium and oil, making it a good proxy for the resources sector.”

Another is CBD Energy, “a great little company.” It has a foot in just about every renewable camp: wind, solar and storage using a graphite battery.

The stock has very low gearing, has just moved into profit and the two brokers following it value it at 30¢ or 40¢, more than twice its current price. But, like all fast-growing stocks, it is capital hungry: there have been two raisings so far this year.

AGL, with both wind and solar farms, is also a well-regarded green chip that has outperformed the sharemarket during the past 10 years.

One of the smaller stocks Ethinvest favours is solar panel and pump supplier Solco, which has just posted its third consecutive and so far biggest profit, is debt-free as well as paying a tiny dividend.

The other is Dyesol, which is also debt free but loses money. It’s the only solar energy company that doesn’t need much sun to generate electricity. It has adapted photosynthesis from the plant world and using its special dye can generate power more cheaply than traditional silicon-based solar cells, working in low light and not even having to face the sun.

Although Sydney-based Arkx Investment Management is loath to invest in Australia until a carbon tax is put in place, some green chips are on its watch list including Infigen, Dyesol and CBD Energy.

Another is Geodynamics, which plans to use hot rocks in the Cooper Basin to generate power. But it’s strictly long term – we’re talking 2019 at the earliest.

“It has breakthrough technology but it’s yet to be proven,” says the joint managing director of Arkx, Tim Buckley.

Others are Carnegie Wave Energy, using one of the two world-leading ocean wave technologies (“the question in our view is what is the generating and capital cost to bring it online”) and Ceramic Fuel Cells, which has a unit the size of a dishwasher that generates electricity on site from natural gas and has “a client list of who’s who of world utilities”.

Dollars help the planet

It has to be clean, green and keen for veteran fund manger Laurence Freedman — who these days runs his charitable Freedman Foundation — to put his money into it. Oh and debt free.

One of his biggest forays is into Phoslock, which has a product that prevents toxic algae by turning phosphate pollutants in water into mud that drops to the bottom.

“I’ve been using it in my fish pond for five years and the three carp, Huey, Dewey and Louie, are getting fatter,” he says.

“The problem is not the product but dealing with government water authorities,” although it has already made sales in Europe.

Another stock he likes is AERIS Environmental, which has an environmentally friendly way of removing bacteria and mould that builds up in airconditioning and cold storage systems.

Lately he has taken a shine to Nanosonics, a stock that is about as clean as you can get.

It has invented a disinfectant machine, or transducer, that cleans surgical instruments, replacing the more expensive steam-pressurised or chemical-using autoclaves usually employed.

Freedman says you need a portfolio of stocks for green investing. Suitable stocks should have some cash on hand or at least some large shareholders who can be tapped for future finance.

And “nibble away” rather than put your money in all at once.

“Dollar-cost average so you’re putting money in slowly,” he says.

“My final advice is don’t look at the price every week.”

Ethical investment is a moral minefield

An ethical fund has thrashed its mainstream rivals in the past year, posting a 29.5 per cent return, three times better than the overall share market, according to Morningstar.

While it’s reassuring that investing with a conscience doesn’t have to be a mug’s game, there’s a fine line between what’s ethical and what’s mainstream.

The Perpetual Wholesale Ethical SRI Fund eschews alcohol, gambling and tobacco stocks but was the best performer because it has a big holding in the banks.

Which just goes to show that ethics are in the eye of the beholder.

A bank might tick all the boxes for its relations with staff and shareholders or efforts at promoting renewable energy — Westpac has won awards for being Australia’s most socially responsible company — but you don’t know to whom it has been lending.

And what about uranium mining? Nuclear power might be clean and green but many consider uranium mining to be one of the most unethical activities of all.

Perpetual’s ethical fund, for example, leaves out BHP Billiton, which owns the world’s biggest uranium mine.

The problem for ethical funds is that having excluded many stocks from what is a relatively small and certainly not diversified market, they have to pile more into what’s left.

That’s why ethical funds are also a victim of market cycles, such as a run in bank stocks or a mining boom, if not more so.

By the same token, if you feel good about them at least there’s comfort in knowing you’re not being silly with your money.

During the past three years both types lost about the same amount — about 6.5 per cent annually — if that’s any consolation.

The fact is a deeply green fund has to look offshore for stocks.

One fund is so frustrated by the lack of progress on achieving a price for carbon that it has invested its whole portfolio on offshore green chips — and reaped the results.

“Australia has the best technology and scientists in the world. We’d love to invest in Australian clean tech stocks,” the joint managing director of Arkx Investment Management, Tim Buckley, says.”The Australian sharemarket as a whole is the best performer globally but the worst for clean energy stocks. We need a price on carbon.”

The wholesale Arkx Clean Energy Fund returned 20 per cent last financial year.

Keep an eye on its website at arkx.com as the partly Westpac-owned investment manager is planning a fund for mum and dad investors.

Source: www.smh.com.au

Posted under Express 125

Lucky Last  - Going from Hippie to Hip!

Editor of Green magazine Tamsin O’Neill talks with Michael Short in The Zone for The Age (6 September 2010):

Magazine editor and environmentalist Tamsin O’Neill is on a crusade – but not telling people what to think. She is as much educator as editor. The co-founder and editorial chief of green magazine manages to combine poise and passion as she uses her TV interview in The Zone to promulgate a case for radical change in something as fundamental to our lives as the very way we create and use our homes.

Sustainability has gone from hippie to hip. The magazine Green has been both a cause and an effect.

“Right from the beginning, our aim was to make sustainability sexy.” That aesthetic and intellectual allure is not limited to architecture. Quite a chunk of the publication is devoted to design.” Read More

Has the Great Australian Dream been sullied by a Great Australian Delusion?

Have we, understandably but unwittingly, undermined the value and potential pleasure of home ownership by making the classical error of putting quantity ahead of quality?

Have we, at a suburban level at least, already become victims, rather than lucky-country beneficiaries, of the belief that bigger is better?

Are the multitudes of McMansions, as they have become known, spreading daily around Australia’s major and satellite cities, a mistake we are making en masse?

Tamsin O’Neill is as much educator as editor. The co-founder and editorial chief of green magazine manages to combine poise and passion as she uses her TV interview in The Zone to promulgate a case for radical change in something as fundamental to our lives as the very way we create and use our homes.

It comes from the core. She was raised in a family of architects who grew their own vegetables, had chooks  and a house in the bush. O’Neill’s love of the environment and of architecture are natural partners. That marriage has given birth to ideas that have found a seductive, instructive voice through green.

So, here’s the case, or part thereof, against those McMansions that are enveloping our urban fringes in a  ceramic patchwork quilt: “The problem with these big houses is not just the scale of them but the amount of energy they use and the amount of waste that goes into landfill while they’re being built and the longevity of them,” says the former photographer.

“A lot of it is about status and the idea that bigger is better is something I would really like to see change … helping (people) who want to own a big house to understand that maybe they can have a house that’s not as big but is just as conformable and you could probably fit two houses on a block that they’ve got their house on and still be incredibly comfortable and save money on energy and save money overall.”

So, a foundation of O’Neill’s argument is that better quality and structural longevity is actually going to save the home builder money. A typical example is a recent story on the cover of the magazine: “Thinking small – a minimalist house on a city river”, about an innovative building in Brisbane.

Another cornerstone is that she is not elitist – although she is fully aware she might be misunderstood.

On the contrary, it’s about connection and community – even meaning. It’s almost, really, about back-to-basics and the elegance of simplicity.

“I do find it very sad to drive through some suburbs and not see any children in the street, and I think that we have lost that kind of openness and connectedness to the street and to your neighbours [that] is such an important thing.

“Houses need to be designed to facilitate that, but also, on the other end of the scale, I do see there’s a real resurgence in community activities, such as farmers’ markets. People are getting out there and engaging with the local community. I see a lot of that. We’ve got a bit of both happening.

“I’m hoping this is a trend, that this will spread, this idea that for your soul you really need to communicate with your neighbours and your community and, to have a fuller life, that’s a really important thing.”

Life has been full for O’Neill, who, with husband Tom Bodycomb, set up green despite initially thinking suggestions she launch a magazine were ridiculous.

But some people have activism in their genes. Combine that with an entrepreneurial itch, a hole in the market and a partner who shares your vision and you have a propitious constellation of circumstances. The conception of green magazine was immaculate; its birth, well … laboured.

“There are so many magazines. It’s crazy. Why would you start a magazine? We all know how difficult it is to sustain a magazine. But there came a point where the whole green thing was really gathering momentum and I have a mentor who suggested to me one day that there wasn’t enough information out there for people who wanted to build houses environmentally, and that was it.”

Launched in mid 2007 as a quarterly, it is now a bi-monthly magazine of about 120 pages, as well as a website. Circulation has reached 25,000 copies, with an estimated readership of more than 100,000.

Start-ups are trying, but the family survived – and now thrives. Probably has something to do with the children banning their parents from talking business at the dinner table. And with the separate offices they use. Skype can help, it seems, maintain partnerships that are at once personal and professional.

“The first year was very hard. Lots of very early mornings and very late nights, and at that point Tom was working full-time on another job, and so the computer and a cup of tea came into the bed at five o’clock in the morning.

“We did a lot of work before the kids got up. And then he did a lot of work at night. So, it was very difficult time. Probably the most difficult thing I’ve done.”

It might have been a struggle to create, but the magazine’s future appears blessed, given the now-mainstream desire to live in a more harmonious way with the environment.

Sustainability has gone from hippie to hip. green has been both a cause and an effect.

“Right from the beginning, our aim was to make sustainability sexy.” That aesthetic and intellectual allure is not limited to architecture. Quite a chunk of the publication is devoted to design.

“It’s the clever stuff that I love. People doing amazing things with recycled materials that are very beautiful.

“Our upfront section is a showcase of product design, and that in particular is an amazing resource for people for designing products around a recycled whatever – old plates and cups and old brooms – anything that sits around doing nothing and there are too many of. Finding solutions for that type of rubbish that look great and are stylish.”

But some rubbish is beyond redemption. And here, too, O’Neill really wants to provoke and lead change. She’s not only declared death to McMansions. It’s death to “crap furniture”, too.\

And here, again, it might sound like she’s trying to impose or proscribe. But she’s not, she’s seeking to inspire – and to save us some money and the planet some resources.

Now, before all those IKEA fans out there get offended, O’Neill’s definition of “crap furniture” does NOT include that operation.

“IKEA furniture is not that bad and I think if you pick and chose carefully you can buy things that will last a bit longer and then you can take them to the op shop and people will probably buy them and they’ll get used again, which is a great thing. I’m all into second-hand furniture – I love it.”

What she hates is the waste caused by cheap and nasty furniture that’s not designed to last.

“You go into an op shop these days and it’s just absolutely overflowing with furniture that’s kind of half-broken and really not very usable. And that is fundamentally the problem.

“Years and years ago, everybody saved up to buy a nice dining room table or some nice chairs. That really is fundamentally what sustainability is about.

“If people went out and spent more on a table and some nice chairs that would last them a lot longer, they wouldn’t have to go out and buy them again.

“And they wouldn’t end up in op shops, and they wouldn’t end up in landfill.”

As we contemplate all the public policy issues associated with population growth – as well as our housing affordability issues – it’s the private choices opened up to us by people such as Tamsin O’Neill upon which we might construct not only a more sustainable future, but a happier one.

Source: www.theage.com.au