Profiting from Investing in Solar & Wind. What about Jet Bio Fuel?

Profiting from Investing in Solar & Wind. What about Jet Bio Fuel?

Solar and wind farm developer CBD
Energy is unique – it actually makes a profit from its core business producing
clean energy. If the forecasts are right and huge investments come to renewable
energy, making money out of clean energy will be commonplace. Maybe that’s one
good reason for GE to announce that it has joined Virgin Australia and a
consortium of other partners to research and develop commercial biofuel for the
aviation industry.

Giles Parkinson, Climate
Spectator (2 September 2011)

Solar and wind farm developer CBD
Energy is a company that stands unique among Australian listed stocks – it
actually makes a profit from its core business – clean energy.

If the forecasts are right about
the exponential growth of the green economy and the huge investments that will
be made in renewable energy in coming decades, making money out of clean energy
will be commonplace.

For the moment, however, the
listed clean energy sector is awash in losses as development and R&D costs
swamp the paltry revenues of emerging technologies, or earnings are overwhelmed
by hig debt levels, in the case of established wind farm developers such as
Infigen Energy.

That makes CBD’s results worth
analysing, as an island of black in a sea of red ink. In the last financial
year, the Sydney-based CBD returned net earnings of $5.1 million as its
revenues surged nearly four-fold to $165 million from $45 million earlier,
mostly courtesy of its eco-kinetics solar division and the rush to install
rooftop PV.

Operating profits were up 48 per
cent, and the net profit would have been greater had it not been for a tax
credit in the previous year.

The solar business has been the
engine room of its results, and gives at least some insight into the industry,
which remains largely opaque because of the lack of listed company involvement.
Clearly, many companies have been making money. So far, however, we have only
learned that Origin, now the biggest solar PV company in the country, had
revenue of more than $300 million in the last financial year, around a 10-fold
increase, and an unspecified profit from these activities.

CBD says eco-Kinetics – the solar
PV business it acquired for $13 million two years ago – lifted its revenue from
$28 million to $127 million, and profits from $9.7 million to $12.5 million.
CBD says the division has increased market share in the industry upheaval
created by policy uncertainty, but the results suggest a significant squeeze on
margins in doing that. Eco-Kinetics has completed the construction of its 8MW
solar PV project in Thailand, and is now working on solar projects in Italy.

The company’s newly established
premium solar brand, CBD Solar, which uses panels from the German maker Solon,
returned revenue of $14.5 million, and a maiden operating profit of $635,000.
Its solar businesses had $27 million of SRECs (small scale renewable energy
certificates) in hand as at June 30.

Its energy efficiency subsidiary,
Captech, returned a small profit, but this is expected to rise considerably
when its new solar inverter manufacturing facilities go into full swing this
year. Its air conditioning services unit, Parmac, also delivered a small
profit.

CBD, meanwhile, retains grand
plans to seize a major hold of the Australian wind industry through its
AusChina Energy joint venture with the Chinese energy heavyweights, Datang and
Hianwei, that was established in April.

AusChina hopes to acquire or
develop $6 billion of wind projects in Australia, and under a new agreement
unveiled on Thursday, CBD will take management control of the company in return
for a fee of 0.5 per cent. It holds a 23.75 per cent equity stake in the
venture, and can participate in developments via a loan from its partners.

The venture will be watched with
interest. As we wrote in April, it has the potential to have a dramatic impact
on the industry dynamics, courtesy of cheap Chinese finance, and cheaper
Chinese wind turbines. Still, there is a certain amount of scepticism in the
industry about what impact the venture will have, about the ability of the
venture to attract other financiers if the Chinese want to spread the risk, and
its ability to deliver on the projects. The company says project identification
and evaluation has continued, and it may make its first announcement in coming
weeks. “While there are lead times to estalishing wind projects, AusChina
offers a substantial opportunity for building long term recurring revenue
streams.”

CEO Gerry McGowan says the
overall results are just a pointer to the potential of the business, given its
emergenc as the only fully integrated solar equipment manufacturer in the
country, the AusChina joint venture, its diversification across wind, solar and
energy efficiency, and the growing opportunities in the international markets,
which he says will offset the policy uncertainty in Australia.

Still, CBD, like others in the
sector, has some work to do to convince investors. It may be the only clean
energy company that can deliver a profit, but its shares sit squarely with its
peers – right in the doldrums. They last traded at 11c, giving it a market
capitalisation of $49 million. Over the past year they have fallen 15 per cent,
despite their lift in revenues and profits, and are well down from a 2011 peak
of 18c reached soon after the AusChina venture was first unveiled.

Source: www.climatespectator.com.au

31 August 2011 GE joins
consortium to develop Australian aviation biofuel

 

Sydney, Australia – 1 September,
2011 – GE (NYSE:GE) today announced that it has joined Virgin Australia and a
consortium of other partners to research and develop commercial biofuel for the
aviation industry. The consortium will focus on pyrolytic conversion of biomass
from mallee eucalypt trees and intend to have a pilot biofuel production unit operating
in Australia by 2012.

The agreement comes as the
aviation industry puts added focus on carbon emissions as it becomes covered by
emissions trading schemes around the world. As part of GE’s ecomagination
initiative, the company is already leading the way in the development of fuel
efficient jet engines within its sustainable transport portfolio; the
development of biofuels is a natural extension of this.

Ben Waters, Director of
ecomagination, GE Australia and New Zealand said: “Innovation and creativity
will play enormous roles as part of the transition to a low carbon future. We
already invest a huge amount in the development of more efficient and
alternative energy sources in the aviation industry and beyond, and we hope to
bring a huge amount of knowledge to this partnership.”

A recent CSIRO report estimated
that the aviation industry could cut greenhouse gas emissions by 17%, generate
more than 12,000 jobs and reduce Australia’s reliance on aviation fuel imports
by $2 billion per annum over the next 20 years through the adoption of
biofuels.

The consortium includes Renewable
Oil Corporation, the Future Farm Industries CRC, and Canadian biofuels company
Dynamotive Energy Systems Corporation alongside Virgin Australia and now GE.

As well as the development of the
fuels, GE will assist with the certification process. Before being approved for
commercial use, new fuels undergo rigorous tests in laboratories, on engine
test rigs and then in carefully monitored non-commercial flights.

About GE

GE (NYSE: GE) is an advanced
technology, services and finance company taking on the world’s toughest challenges.
Dedicated to innovation in energy, health, transportation and infrastructure,
GE operates in more than 100 countries and employs about 300,000 people
worldwide. For more information, visit the company’s web site at www.ge.com/au.

About Virgin Australia

Virgin Australia group of
airlines (ASX: VBA), formerly the Virgin Blue group of airlines, was launched
in 2000 as the first sustainable low-fare airline in Australian skies. Today
the group employs over 7,000 people and includes multi-award winning domestic
airline Virgin Australia (formerly Virgin Blue); international long-haul
airline V Australia; international subsidiary airline Pacific Blue; and
Polynesian Blue, a joint venture airline with the Government of Samoa. Virgin
Australia is currently in the process of re-launching its domestic and
short-haul international product, and both V Australia and Pacific Blue
airlines will operate as Virgin Australia by the end of 2011.

About Dynamotive Energy Systems
Corporation

Dynamotive Energy Systems Corporation
is an energy solutions provider headquartered in Vancouver, Canada, with
offices in the USA and Argentina. Its carbon/greenhouse gas neutral fast
pyrolysis technology uses medium temperatures and oxygen-less conditions to
turn dry, waste cellulosic biomass into BioOil for power and heat generation.
BioOil can be further converted into vehicle fuels and chemicals. Dynamotive
has currently a co-operation agreement with IFP Energies Nouvelles on upgrading
and the parties are in exclusive negotiations for the commercial development of
this process.

About Renewable Oil Corporation

Renewable Oil Corporation Pty Ltd
(ROC ) is an Australian company established to develop pyrolysis projects in
this region. It has an exclusive technology licensing agreement with Dynamotive
and works closely with Dynamotive and its partners. ROC’s board includes
award-winning Australian engineering personnel as well as the CEO of Dynamotive
and Australian experts in corporate governance and legal and financial issues.
ROC is a private company funded by Australian and overseas investors.  www.renoil.com.au

About Future Farm Industries
Co-operative Research Centre

Future Farm Industries is an
incorporated, national joint venture of southern Australia’s leading
agricultural R&D organisations which is working on a range of profitable
and sustainable farming systems and technologies to assist livestock and crop
producers adapt to climate change. Under its ‘energy tree cropping’ initiative,
it draws on the resources and expertise of the WA Departments of Environment
and Conservation, and Agriculture and Food, and CSIRO to undertake the
necessary R&D for on-farm mallee production. Toowoomba-based Biosystems
Engineering is FFI CRC’s partner developing the mallee harvester and biomass
supply chain technologies.

Source: www.futurefarmonline.com.au and www.ge.com/au

One Response to “Profiting from Investing in Solar & Wind. What about Jet Bio Fuel?”

  1. Congratulations Gerry McGowan on lifting CBD Energy to an impressive position ready to capture returns from the inevitable clean energy revolution. As a past shareholder, Director, and Chairman of CBD Energy Limited who took the company from a dot.com wreck to its first profitable results, it is pleasing to see that early work now ready to pay off not just for shareholders, but for the planet.

    David Hood
    National Deputy President, Engineers Australia

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