CleanTech Stocks Slump at Home but Rise to the Occasion Abroad

The December slump of Australia’s CleanTech Index coincided with the defeat of the emissions trading legislation, the disappointment in Copenhagen, as well as the allocation of renewable energy grants. But Giles Parkinson in The Australian says it was very different overseas where clean energy stocks rose 39.7% in 2009 after a 61% fall in 2008.

GREENCHIP: Giles Parkinson in The Australian (11 January 2010):

ANY way you measure their market performance, Australia’s listed cleantech companies are having a lousy few years.

Since outperforming both the benchmark S&P/ASX 200 and the S&P/ASX Small Ords indices in 2007, the 75 companies that make up the ACT Australian CleanTech Index (once valued at $16 billion but now worth $10bn) have seriously underperformed those broader indices in each of the 2008, 2009 and 2010 first-half financial years. Essentially, the index fell harder than the rest of the market and recovered less.

Now it’s falling again. Figures for December show the CleanTech Index down 6.2 per cent for the month, compared with 1.7 per cent gains in the broader index and a 3.8 per cent gain in the small caps.

That has taken its results for the December half to a loss of 4.9 per cent, compared with jumps of 24.3 per cent and 26.7 per cent respectively for the other indices.

John O’Brien, the managing director of Australian Cleantech, says many smaller stocks have recovered quicker than the general market, but the larger stocks, such as waste specialist Sims Metal and Transpacific Industries, and wind energy group Infigen, have not recovered as quickly.

The index and its components are also vulnerable to the vagaries of government policy.

The December slump coincided with the defeat of the emissions trading legislation and disappointment in Copenhagen, which hit carbon offset stocks such as Carbon Conscious and CO2, and the allocation of renewable energy grants.

Those that missed out, including Carnegie Wave and Kuth Energy, were among the hardest hit. Solar PV installers such as Quantum Energy went on a roller-coaster ride that pretty much followed government policy.

Companies such as Jackgreen went into administration, while others, such as Geodynamics, slumped after nearly sending its board of directors into orbit with a blowout at its flagship well.

The best performer for the past month was solar cell innovator Dyesol. Biodegradable packing group Pro-Pac Packaging was the best performer for the latest quarter, while biodegradable nappies producer Eco Quest was the best performer for the half, trebling its share price, mostly in the first quarter.

It’s hard to read any trend in the various components of the cleantech index. Solar, which performed well in the 2007 fiscal year and last year, underperformed in 2008 and so far this year, while wind, which boomed in 2007 but fared poorly in 2008 and last year, has performed better so far this year, as have the energy efficiency, geothermal and environmental services sub-indices.

Perhaps they could be neatly plotted against a graph highlighting policy hope, policy promises, and policy delivery over the same period. O’Brien says the volatility highlights the relatively immaturity of listed stocks in the area.

Offshore cleans up

THE Australian CleanTech Index gained just 12.7 per cent last calender year, but it was a different story offshore, where the WilderHill New Energy Global Innovation Index, which tracks 86 clean energy stocks worth $US230bn ($248.6bn) worldwide and is a favourite of fund managers specialising in this area, rose 39.7 per cent in 2009 after a 61 per cent fall in 2008.

Wilderhill attributes the rebound to the government green stimulus programs, and interest in power storage and energy efficiency stocks because of the excitement about electric vehicles.

More established industries such as wind, solar, biofuel and biomass found the going tougher, reflected in the December quarter, which showed an overall gain of just 0.3 per cent, as power storage shares jumped 25.4 per cent, energy efficiency shares jumped 8.6 per cent, while solar stocks fell 8.1 per cent and wind dropped 4.4 per cent.

The best-performing stocks in the last quarter were the Chinese energy efficiency company Zhejiang Yankon (up 54.3 per cent) and US light-emitting diode maker Cree (up 53.4 per cent).

The best performers of the year included the Chinese-based electric car and battery maker BYD (which soared more than four-fold) and the Nasdaq listed ultra-capacitor maker Maxwell Technologies (which jumped 252 per cent).

The best energy efficiency stocks over the year included Taiwanese firm Epistar (up 315 per cent), and US companies EnerNOC (up 308 per cent) and Cree (up 255 per cent).

Hot rock doubt

DOUBT about prospects for hot rock energy created by the incident at Geodynamics, along with regulatory uncertainty, has helped scuttle plans by Granite Power for a $50 million float, as well as those of New World Energy, which hoped to raise $10m to pursue geothermal opportunities in the Pilbara. It seems investors baulked at the idea of geothermal energy and are awaiting further proof that the hot rock concept works and will be commercial.

Granite Power is expected to focus on the development of its Granex heat system, with the hope of licensing the technology to other producers. But overseas interest in cleantech initial public offerings is increasing, with algae fuel developer Codexis announcing plans last week for a $US100m IPO on the Nasdaq, underwritten by Goldman Sachs and Credit Suisse, while US solar firm Solyndra plans a $US300m IPO.

Source: www.theaustralian.com.au

Europe’s Renewable Power to Get its own Dedicated Grid

Even as practically all of the Northern Hemisphere goes through one of its biggest winter freezes on record, there is no hesitation in plans for Europe’s North Sea countries to set in motion a vast clean energy project. The Guardian’s Green Technology correspondent Alok Jha reports on Europe’s first electricity grid dedicated to renewable power, which will become a political reality this month.

Green Technology correspondent Alok Jha in the guardian.co.uk (3 January 2010):

Europe’s first electricity grid dedicated to renewable power will become a political reality this month, as nine countries formally draw up plans to link their clean energy projects around the North Sea.

It would connect turbines off the wind-lashed north coast of Scotland with Germany’s vast arrays of solar panels, and join the power of waves crashing on to the Belgian and Danish coasts with the hydro-electric dams nestled in Norway’s fjords.

The network, made up of thousands of kilometres of highly efficient undersea cables that could cost up to €30bn (£26.5bn), would solve one of the biggest criticisms faced by renewable power – that unpredictable weather means it is unreliable.

With a renewables supergrid, electricity can be supplied across the continent from wherever the wind is blowing, the sun is shining or the waves are crashing.

Connected to Norway’s many hydro-electric power stations, it could act as a giant 30GW battery for Europe’s clean energy, storing electricity when demand is low and be a major step towards a continent-wide supergrid that could link into the vast potential of solar power farms in North Africa.

By autumn, the nine governments involved – Germany, France, Belgium, the Netherlands, Luxembourg, Denmark, Sweden and Ireland and the UK – hope to have a plan to begin building a high-voltage direct current network within the next decade. It will be an important step in achieving the European Union’s pledge that, by 2020, 20% of its energy will come from renewable sources.

“We recognise that the North Sea has huge resources, we are exploiting those in the UK quite intensively at the moment,” said the UK’s energy and climate change minister, Lord Hunt. “But there are projects where it might make sense to join up with other countries, so this comes at a very good time for us.”

More than 100GW of offshore wind projects are under development in Europe, around 10% of the EU’s electricity demand, and equivalent to about 100 large coal-fired plants. The surge in wind power means the continent’s grid needs to be adapted, according to Justin Wilkes of the European Wind Energy Association (EWEA). An EWEA study last year outlined where these cables might be built and this is likely to be a starting point for the discussions by the nine countries.

Renewable energy is much more decentralised and is often built in inhospitable places, far from cities. A supergrid in the North Sea would enable a secure and reliable energy supply from renewables by balancing power across the continent.

Norway’s hydro plants – equivalent to about 30 large coal-fired power stations – could use excess power to pump water uphill, ready to let it rush down again, generating electricity, when demand is high. “The benefits of an offshore supergrid are not simply to allow offshore wind farms to connect; if you have additional capacity, which you will do within these lines, it will allow power trading between countries and that improves EU competitiveness,” said Wilkes.

The European Commission has also been studying proposals for a renewable-electricity grid in the North Sea. A working group in the EC’s energy department, led by Georg Wilhelm Adamowitsch, will produce a plan by the end of 2010. He has warned that without additional transmission infrastructure, the EU will not be able to meet its ambitious targets. Hunt said the EC working group’s findings would be fed into the nine-country grid plan.

The cost of a North Sea grid has not yet been calculated, but a study by Greenpeace in 2008 put the price of building a similar grid by 2025 at €15bn-€20bn. This would provide more than 6,000km of cable around the region. The EWEA’s 2009 study suggested the costs of connecting the proposed 100GW wind farms and building interconnectors, into which further wind and wave power farms could be plugged in future, would probably push the bill closer to €30bn. The technical, planning, legal and environmental issues will be discussed at the meeting of the nine this month.

“The first thing we’re aiming for is a common vision,” said Hunt. “We will hopefully sign a memorandum of understanding in the autumn with ministers setting out what we’re trying to do and how we plan to do it.”

All those involved also have an eye on the future, said Wilkes. “The North Sea grid would be the backbone of the future European electricity supergrid,” he said.

This supergrid, which has support from scientists at the commission’s Institute for Energy (IE), and political backing from both the French president, Nicolas Sarkozy, and Gordon Brown, would link huge solar farms in southern Europe – producing electricity either through photovoltaic cells, or by concentrating the sun’s heat to boil water and drive turbines – with marine, geothermal and wind projects elsewhere on the continent.

Scientists at the IE have estimated it would require the capture of just 0.3% of the light falling on the Sahara and the deserts of the Middle East to meet all Europe’s energy needs.

In this grid, electricity would be transmitted along high voltage direct current cables. These are more expensive than traditional alternating-current cables, but they lose less energy over long distances.

Hunt agreed that the European supergrid was a long-term dream, but one worth making a reality. The UK, like other countries, faced “huge challenges with our renewables targets,” he said. “The 2020 target is just the beginning and then we’ve got to aim for 2050 with a decarbonised electricity supply – so we need all the renewables we can get.”

A North Sea grid could link into grids proposed for a much larger German-led plan for renewables called the Desertec Industrial Initiative (DII). This aims to provide 15% of Europe’s electricity by 2050 or earlier via power lines stretching across desert and the Mediterranean.

The plan was launched last November with partners including Munich Re, the world’s biggest reinsurer, and some of Germany’s biggest engineering and power companies, including Siemens, E.ON, ABB and Deutsche Bank. DII is a $400bn (£240bn) plan to use concentrated solar power (CSP) in southern Europe and northern Africa.

This technology uses mirrors to concentrate the sun’s rays on a fluid container, the super-heated liquid then drives turbines to generate electricity. The technology itself is nothing new – CSP plants have been running in the United States for decades and Spain is building many – but the scale of the DII project would be its biggest deployment ever.

Source:  www.guardian.com.uk

2050 Emissions & Temperature Targets are “Barely Feasible”

Power from renewable sources such as wind farms will be important to fight climate change. Nevertheless, a new study says that even if we do everything possible to reduce emissions between now and 2050, keeping overall temperature increases below 2ºC is “barely feasible”. Cosmos Magazine identifies critical 2050 reductions that, if not met, could seriously complicate end-of-century targets with current energy sources.

Report from Agence France-Presse in Cosmos Magazine (12 January 2010):

Power from renewable sources such as wind farms will be important to fight climate change. Nevertheless, the study says that even if we do everything possible to reduce emissions between now and 2050, keeping overall temperature increases below 2ºC is “barely feasible”. WASHINGTON DC: World leaders should focus on reducing greenhouse gas emissions as much as possible over the next 40 years to avoid perilous warming, says a new study.

In the first research of its kind, analysts used a detailed energy system model to analyse the relationship between emissions levels in 2050 and chances of achieving end-of-century targets of 2 to 3ºC above the pre-industrial average.

U.N. climate talks in Copenhagen ended last month with a non-binding agreement to limit warming to 2ºC, but did not set binding targets to reduce the emissions of gasses that scientists say are heating up the world’s atmosphere to dangerous levels.

Critical reductions

The study, conducted with researchers from IIASA and the Energy Research Centre of the Netherlands, is published this week in the Proceedings of the National Academy of Sciences. It identified critical 2050 reductions that, if not met, could seriously complicate end-of-century targets with current energy sources.

Under one scenario, global emissions would need to be reduced by around 20% below 2000 levels by 2050 in order to meet the target. A second scenario, accounting for a more rapid increase in demand for land and energy, would require a 50% reduction by 2050.

But the authors concluded that achieving these reductions was “barely feasible” with known energy sources.

Even odds

“Even if we do everything possible to reduce emissions between now and 2050, we’d only have even odds of hitting the two-degree target – and then only if we also did everything possible over the second half of the century too,” said co-author Keywan Riahi, a researcher at the International Institute for Applied Systems Analysis (IIASA) in Austria.

Lead co-author Brian O’Neill of the National Centre for Atmospheric Research noted that so long as an effective long-term strategy is adopted, emissions could be higher in 2050 than levels included in some proposals but still achieve the 2ºC goal in the long term.

“Setting mid-century targets can help preserve long-term policy options while managing the risks and costs that come with long-term goals,” he said. “Even if you agree on a long-term goal, without limiting emissions sufficiently over the next several decades, you may find you’re unable to achieve it. There’s a risk that potentially desirable options will no longer be technologically feasible, or will be prohibitively expensive to achieve.”

Source: www.cosmosmagazine.com

In the End (a word or two from the editor)

It must be hard for all scientists and climate change advocates in Europe and North America to even contemplate “global warming”, when they’re experiencing such freezing temperatures and major transport chaos due to snow and storms.

But whether we like it or not, the world is getting warmer, and the UK Met Office is telling its weather watchers (and listeners) that the current winter experience will become rarer in the future.  

Remember, the World Meteorological Organization said last month that 2000-2009 was the hottest decade since records began in 1850, and that 2009 would likely be the fifth warmest year on record. WMO data show that eight out of the 10 hottest years on record have all been since 2000.

But instead of sitting around enduring extreme weather conditions (parts of Australia have been experiencing “catastrophic” fire conditions this week), the world must sit up and do something about it.

Current political processes, globally and nationally, do not seem to be making a fist of climate change measures.

In my book “The ABC of Carbon”, I made a positive suggestion to set up a new international organisation, bringing together big business, global NGOs and key Government leaders. Here’s the relevant passage:

“Businesses have put into place policies and practices to cut emissions and energy use. No one has told the business community or industry what it must do, but they can see what’s on the horizon and they know that they have to share in the responsibility and the risks.

Business being business knows how to act decisively, even if not equipped with all the science it could do with. All credit to those business leaders — who know that leadership means taking risks and taking action. Taking action for their own good, as well as for their shareholders, partners, clients and customers.

Rupert Murdoch, Ray Anderson and Richard Branson would be three notables to stand out; their policies and declarations of action are noted elsewhere in this book.

It would make sense to get business people of their ilk to help form a new international organisation that brings together the energy and economic edge of business, the enthusiasm of NGOs and outstanding individuals, with the appropriate UN agencies, including the World Bank, to focus exclusively on carbon and climate change.

Let’s call it the International Carbon Enterprise, or ICE.”

When I first penned those words, I still had some hope that Bali and then Copenhagen would come up with some answers. More than a Roadmap. More than an Accord. A realistic and manageable plan for all countries (and businesses) to commit to. It hasn’t happened. And just as Professor Giddens says, maybe the current UN multi-lateral process must be bypassed.

So let’s not put another plan on ice. Let’s move to bring global business and global NGOs, together with the critical Governments (the major emitters) to form an action-oriented body. Now you’re talking and acting. Bring it on! – Ken Hickson