30.03.09 New Energy Finance Review
It is going to be a tough year. If anyone in the clean energy sector doubted that, then the events of the first quarter should have put them right. New Energy Finance’s figures for new investment in Q1 2009 will be released later this week and will show a big fall in deal volumes compared to the same quarter in 2008.
However stock market pundits point out that share prices do not rally when the news is good, they rally when the news is bad – but not getting any worse. Someone seems to have fed this message through to the solar energy sector in recent days.
Stalwarts such as Renewable Energy Corporation, Solarworld, Q-Cells, First Solar and Suntech Power Holdings have all seen their shares rally by between 25% and 110% since hitting lows in the first week of March.
The question for investors is whether this is a “dead cat bounce”, or a signal that sentiment is turning in arguably the fastest moving and most innovative sub-sector of clean energy. On the side of the dead cat theory is the fact that debt finance for renewable energy, including solar, projects remains as scarce as white heather on both sides of the Atlantic.
PV Crystalox, the solar ingot and wafer manufacturer with operations in Germany and the UK, said last week that its customers have “very little visibility” on likely demand for the rest of this year. It added: “It is generally expected that the dramatic contraction in the PV market in Spain coupled with the effects of the global economic crisis will result at best in flat market demand in 2009.”
However there is a glass-half-full way of looking at this. German cell, module and inverter supplier Sunways said that although it expected PV market demand to “decline in the current year as a result of the economic situation”, trading in March had been much better than in January or February.
Fellow German company SolarWorld was more bullish, saying that after hitting sales of EUR 900m (USD 1.2bn) in 2008, it had set “EUR 1bn as the next-stage goal”. It also predicted further solar market growth in the US in 2009 as a result of the stimulus package driven through by the Obama administration.
The most important positive development of the week however came in China, where the government introduced a subsidy of up to CNY 20 per Watt (USD 2.9/W) for BIPV projects over 50kW.
Eligible projects for the subsidy have to be commissioned after 23 March 2009, and are required to have a module efficiency of over 16% for monocrystalline PV modules, 14% for multicrystalline PV modules and 6% for a-Si thin-film modules. Grid-connected and public building will be given preference.
The subsidy is regarded as generous, although it is scheduled to last for just one year and chances of its continuance will depend on market conditions. The most likely beneficiaries according to New Energy Finance analysis are installations at large commercial and public buildings.
Such was the positive reception for this policy development that shares in Chinese solar firms Suntech, Yingli Green, Canadian Solar, LDK and ReneSola all surged by between 30% and 50% on the same day as the announcement.
With G20 leaders gathering in London on Thursday to discuss action to drag the world economy out of recession, the hope is that the meeting might push other countries into taking similarly decisive moves to trigger investment in clean energy.
NEWS - Commodites, Agriculture, Green Investment - NEWS
3/31/2009
Diamonds are an investor's best friend
18 February 2009 - Tara Loader Wilkinson for eFinancialNews
While gold hits a new high
A fund offering access to physical diamonds is being launched to take advantage of investors' appetite for physical assets they hope will avoid the turbulence in securities markets -- as illustrated by rise of physical gold prices to a seven month high.
The KPR diamond fund capitalises on the price appreciation of top quality colourless diamonds.
The diamond fund aims to provide returns which are not correlated with traditional asset classes, act as a hedge against inflation and benefit from the supply/demand imbalance over the long term.
The fund, which is part of KPR Fund, a Cayman Islands open-ended investment company, launches on March 2 2009, with a minimum investment of $250,000. Investors can also purchase stones on selected diamond sales by the fund at a wholesale price.
The move comes weeks after Alfa Capital, the Russian investment group controlled by the oligarch Mikhail Fridman, launched a similar fund a fund for its high net worth clientele investing solely in diamonds, with an estimated yield of 15-17%.
Giovanni Pennetta, chief executive of Goldwinds Asset Management, the fund's investment adviser, said: “The long term outlook for diamonds is robust. We are confident that this fund will provide the means for investors to diversify their portfolio and gain exposure to physical diamonds in a cost-efficient way. We see this as a huge investment opportunity that investors should not miss.”
Separately the gold market is also shining, with demand for physical bars and coins rising 87% last year and shortages reported across many parts of the globe, according to the World Gold Council.
Investment demand for gold, which includes exchange traded funds, was 64% higher in 2008 than 2007, equivalent to a further inflow of $15bn. Over the year as a whole, the gold price averaged $872, up 25% from $695 in 2007.
Aram Shishmanian, the new chief executive of World Gold Council, said: “The economic downturn is unlikely to abate in the short term. Consequently, I anticipate that gold, as a unique asset class, will continue to play a vital role in providing stability to both household and professional investors around the world.”
Gary Dugan, chief investment officer for Merrill Lynch Global Wealth Management EMEA said on gold: "The fragility of confidence is forcing investors back into safe havens, with gold the top beneficiary. Gold is benefiting from massive ETF inflows as traditional demand from areas such as emerging market jewellery has largely collapsed. It looks as if we will see a test of the $980-990 resistance very soon. Distressed financial sectors highlight the merit of precious metals as a secure store of value, while overly successful monetisation of debt threatens sharply higher inflation down the line".
While gold hits a new high
A fund offering access to physical diamonds is being launched to take advantage of investors' appetite for physical assets they hope will avoid the turbulence in securities markets -- as illustrated by rise of physical gold prices to a seven month high.
The KPR diamond fund capitalises on the price appreciation of top quality colourless diamonds.
The diamond fund aims to provide returns which are not correlated with traditional asset classes, act as a hedge against inflation and benefit from the supply/demand imbalance over the long term.
The fund, which is part of KPR Fund, a Cayman Islands open-ended investment company, launches on March 2 2009, with a minimum investment of $250,000. Investors can also purchase stones on selected diamond sales by the fund at a wholesale price.
The move comes weeks after Alfa Capital, the Russian investment group controlled by the oligarch Mikhail Fridman, launched a similar fund a fund for its high net worth clientele investing solely in diamonds, with an estimated yield of 15-17%.
Giovanni Pennetta, chief executive of Goldwinds Asset Management, the fund's investment adviser, said: “The long term outlook for diamonds is robust. We are confident that this fund will provide the means for investors to diversify their portfolio and gain exposure to physical diamonds in a cost-efficient way. We see this as a huge investment opportunity that investors should not miss.”
Separately the gold market is also shining, with demand for physical bars and coins rising 87% last year and shortages reported across many parts of the globe, according to the World Gold Council.
Investment demand for gold, which includes exchange traded funds, was 64% higher in 2008 than 2007, equivalent to a further inflow of $15bn. Over the year as a whole, the gold price averaged $872, up 25% from $695 in 2007.
Aram Shishmanian, the new chief executive of World Gold Council, said: “The economic downturn is unlikely to abate in the short term. Consequently, I anticipate that gold, as a unique asset class, will continue to play a vital role in providing stability to both household and professional investors around the world.”
Gary Dugan, chief investment officer for Merrill Lynch Global Wealth Management EMEA said on gold: "The fragility of confidence is forcing investors back into safe havens, with gold the top beneficiary. Gold is benefiting from massive ETF inflows as traditional demand from areas such as emerging market jewellery has largely collapsed. It looks as if we will see a test of the $980-990 resistance very soon. Distressed financial sectors highlight the merit of precious metals as a secure store of value, while overly successful monetisation of debt threatens sharply higher inflation down the line".
3/30/2009
Suzlon Signs MoU with TERI University for MTech Programme in Renewable Energy Engineering and Management
New Delhi, Delhi and Pune, Maharashtra, India, Monday, March 30, 2009 -- (Business Wire India) -- Suzlon Energy Limited, the world's fifth leading wind turbine maker, entered into a Memorandum of Understanding (MoU) with TERI University for setting up and offering an MTech Programme in Renewable Energy Engineering and Management. This MoU will facilitate Suzlon Energy to contribute to the Programme through exchange of ideas and expertise, and guest faculty.
Since its inception in 1999, TERI University has developed and evolved as a research university exploring the frontiers of knowledge in the fields of environment, energy and sustainable development, amongst others. The aim of this degree programme is to produce engineering graduates who have a strong grounding in the renewable energy engineering subject, and also equip them with a good understanding of the social and economic aspects of energy policy. Backed by an advisory committee constituting of a senior Suzlon executive, this programme will enable them to provide inputs to the curriculum, monitor the quality of the programme, determine and facilitate access to experimental facilities, equipment, etc and oversee the proper conduct.
Speaking about this initiative Mr. Tulsi Tanti, CMD, Suzlon Energy Ltd. said, "Suzlon today is the evolving face of renewable energy. By joining hands with TERI University we clearly demonstrate our vision and commitment towards green energy. We are proud to extend our support to this course that will give birth to a young dynamic generation of engineers who will inherit the challenge of creating a sustainable future."
Dr RK Pachauri, Chancellor TERI University and Director General The Energy and Resources Institute said, "TERI University is a unique institution which is focusing on the challenges that humanity is facing today and would continue to face in the future particularly in respect of unsustainable use of natural resources. Against that background we are pleased and proud to receive support from Suzlon Energy, an organization which has been a pioneer in promoting and implementing renewable energy solutions in India and several other parts of the world. We believe the graduates of the TERI University who benefit from support being provided by Suzlon Energy will help take the world towards a sustainable energy future."
Commenting on the partnership Dr Rajiv Seth, Registrar, TERI University said "In the light of a worldwide recognition of the need for clean energy, there can be little doubt that the growth of renewable energy technology will continue to escalate. By introducing a program in Renewable Energy Engineering and management, in partnership with Asia's leading wind turbine manufacturer, Suzlon Energy, TERI University will be able to impart first hand knowledge and expertise, making it one of the most prestigious programs of its kind."
About Suzlon Energy Limited
Suzlon ranked as the world's fifth leading wind turbine manufacturer with over 10.5 % of global market share in 2007. The company has ranked as the leading manufacturer in the Indian market for nine consecutive years, maintaining over 50% market share. Suzlon has its corporate offices in Pune, India and company's global spread reflects in its projects and markets portfolio - extending across Asia, Australia, Europe and North and South America. Suzlon is a highly vertically integrated wind turbine manufacturer with manufacturing capability along the full value chain - from components to complete wind turbine systems. The company currently has a combined manufacturing base of 2,700 MW of annual capacity, and has a further 3,000 MW of capacity coming on stream. Please visit www.suzlon.com.
About TERI University
TERI University was granted "Deemed to be University" status by the University Grants Commission in Oct 1999. The University offers Masters and Doctoral level programmes. The University's inception from the research and training activities of TERI has propelled and influenced the evolution of its academic units. The University and TERI function jointly in collaborative research and programmes, undertake joint studies and offer mutual support for seminars, symposiums, and conferences. TERI's existing infrastructure - state-of-the-art laboratories, well-equipped field stations, and highly professional manpower - is available for the University to tap into and gain from.
The University has recently moved to a modern green campus at Vasant Kunj in New Delhi. The campus provides excellent facilities and an academic environment which enhances learning. It offers the following programmes: Doctoral programmes, MA (Public Policy & Sustainable Development), MBA (Infrastructure), M Sc (Environmental Studies), M Sc (Natural Resources Management), M Sc (Water Resources Management), M Sc (Geoinformatics), M Sc (Plant Biotechnology), M Sc (Climate Science & Policy), M Tech (Renewable Energy Engineering & Management), MBA (Business Sustainability).
Since its inception in 1999, TERI University has developed and evolved as a research university exploring the frontiers of knowledge in the fields of environment, energy and sustainable development, amongst others. The aim of this degree programme is to produce engineering graduates who have a strong grounding in the renewable energy engineering subject, and also equip them with a good understanding of the social and economic aspects of energy policy. Backed by an advisory committee constituting of a senior Suzlon executive, this programme will enable them to provide inputs to the curriculum, monitor the quality of the programme, determine and facilitate access to experimental facilities, equipment, etc and oversee the proper conduct.
Speaking about this initiative Mr. Tulsi Tanti, CMD, Suzlon Energy Ltd. said, "Suzlon today is the evolving face of renewable energy. By joining hands with TERI University we clearly demonstrate our vision and commitment towards green energy. We are proud to extend our support to this course that will give birth to a young dynamic generation of engineers who will inherit the challenge of creating a sustainable future."
Dr RK Pachauri, Chancellor TERI University and Director General The Energy and Resources Institute said, "TERI University is a unique institution which is focusing on the challenges that humanity is facing today and would continue to face in the future particularly in respect of unsustainable use of natural resources. Against that background we are pleased and proud to receive support from Suzlon Energy, an organization which has been a pioneer in promoting and implementing renewable energy solutions in India and several other parts of the world. We believe the graduates of the TERI University who benefit from support being provided by Suzlon Energy will help take the world towards a sustainable energy future."
Commenting on the partnership Dr Rajiv Seth, Registrar, TERI University said "In the light of a worldwide recognition of the need for clean energy, there can be little doubt that the growth of renewable energy technology will continue to escalate. By introducing a program in Renewable Energy Engineering and management, in partnership with Asia's leading wind turbine manufacturer, Suzlon Energy, TERI University will be able to impart first hand knowledge and expertise, making it one of the most prestigious programs of its kind."
About Suzlon Energy Limited
Suzlon ranked as the world's fifth leading wind turbine manufacturer with over 10.5 % of global market share in 2007. The company has ranked as the leading manufacturer in the Indian market for nine consecutive years, maintaining over 50% market share. Suzlon has its corporate offices in Pune, India and company's global spread reflects in its projects and markets portfolio - extending across Asia, Australia, Europe and North and South America. Suzlon is a highly vertically integrated wind turbine manufacturer with manufacturing capability along the full value chain - from components to complete wind turbine systems. The company currently has a combined manufacturing base of 2,700 MW of annual capacity, and has a further 3,000 MW of capacity coming on stream. Please visit www.suzlon.com.
About TERI University
TERI University was granted "Deemed to be University" status by the University Grants Commission in Oct 1999. The University offers Masters and Doctoral level programmes. The University's inception from the research and training activities of TERI has propelled and influenced the evolution of its academic units. The University and TERI function jointly in collaborative research and programmes, undertake joint studies and offer mutual support for seminars, symposiums, and conferences. TERI's existing infrastructure - state-of-the-art laboratories, well-equipped field stations, and highly professional manpower - is available for the University to tap into and gain from.
The University has recently moved to a modern green campus at Vasant Kunj in New Delhi. The campus provides excellent facilities and an academic environment which enhances learning. It offers the following programmes: Doctoral programmes, MA (Public Policy & Sustainable Development), MBA (Infrastructure), M Sc (Environmental Studies), M Sc (Natural Resources Management), M Sc (Water Resources Management), M Sc (Geoinformatics), M Sc (Plant Biotechnology), M Sc (Climate Science & Policy), M Tech (Renewable Energy Engineering & Management), MBA (Business Sustainability).
3/27/2009
Masdar takes vision of clean energy to European forum
posted on 16/03/2009 - Gulf News
The chief executive officer of Masdar has announced the company will attend a three-day European Energy Forum in Bilbao, Spain, between June 9 and 11.
The chief executive of Masdar (Abu Dhabi Future Energy Company), said yesterday as a testament to Abu Dhabi and Masdar's ongoing commitment to the renewable energy sector, the company will, in collaboration with Turret Middle East, attend the forum.
"Based on the direction of our visionary leadership, and due to the overwhelming success of World Future Energy Summit 2008 and 2009, we have decided to take Abu Dhabi's global platform for collaboration on renewable energy, WFES, to Europe," Dr Sultan Al Jaber told a news conference here.
"By taking this more focused forum to Europe, we are targeting an audience that will be a catalyst for advancing sustainable solutions in the region. We hope to reinforce our position to the renewable energy industry that the time to be competitive, creative and innovative is now," he said.
Al Jaber said despite the economic downturn, renewable energy must remain high on the global agenda.
"We are not alone in our ambition. We have seen the support of governments, industry leaders and energy experts at this year's World Future Energy Summit. We had over 18,000 attendees from 79 countries. These figures are evidence that people around the world are as committed to this agenda as we are," he added.
Al Jaber said at they expect more than 5,000 attendees at the forum.
Renewable energy sources will account for at least seven per cent of Abu Dhabi's power generation capacity by 2020. Masdar estimates this commitment will create a renewable energy market of $6 billion-$8 billion in the emirate. – Gulf News
The chief executive officer of Masdar has announced the company will attend a three-day European Energy Forum in Bilbao, Spain, between June 9 and 11.
The chief executive of Masdar (Abu Dhabi Future Energy Company), said yesterday as a testament to Abu Dhabi and Masdar's ongoing commitment to the renewable energy sector, the company will, in collaboration with Turret Middle East, attend the forum.
"Based on the direction of our visionary leadership, and due to the overwhelming success of World Future Energy Summit 2008 and 2009, we have decided to take Abu Dhabi's global platform for collaboration on renewable energy, WFES, to Europe," Dr Sultan Al Jaber told a news conference here.
"By taking this more focused forum to Europe, we are targeting an audience that will be a catalyst for advancing sustainable solutions in the region. We hope to reinforce our position to the renewable energy industry that the time to be competitive, creative and innovative is now," he said.
Al Jaber said despite the economic downturn, renewable energy must remain high on the global agenda.
"We are not alone in our ambition. We have seen the support of governments, industry leaders and energy experts at this year's World Future Energy Summit. We had over 18,000 attendees from 79 countries. These figures are evidence that people around the world are as committed to this agenda as we are," he added.
Al Jaber said at they expect more than 5,000 attendees at the forum.
Renewable energy sources will account for at least seven per cent of Abu Dhabi's power generation capacity by 2020. Masdar estimates this commitment will create a renewable energy market of $6 billion-$8 billion in the emirate. – Gulf News
China Gets in on Wind Power Movement, Could Help Lower Prices
A wind farm in Beijing, China.
Mar 17 2009
The HEAT Zone has reported extensively on the portion of President Obama’s stimulus bill that is designated to fund development of alternative energy here in the US. Halfway around the globe, another economic powerhouse has its own stimulus package, and is using it to fund development of some of the same renewable energy sources.
A segment aired yesterday on National Public Media’s radio show Marketplace reported on China’s new push toward wind energy. Hoping to stimulate the economy, the Chinese government is shelling out billions to fund infrastructure projects (much like the US government will begin to do in the coming weeks and months), including wind farms. For every dollar invested in Chinese wind farms, 70 cents is borrowed; state-owned energy companies can easily secure loans from state-owned banks, generating enough credit to pave the way for large-scale production of wind farms. This official push toward wind power is a dual investment in China’s future: wind power equipment could prove to be a valuable export, and increased utilization of wind power in China helps improve the horrendous state of air quality in the country. With a recent explosion in car ownership and 80 percent of the nation’s electricity generated by coal-fired power plants, air pollution is a serious problem that must be addressed immediately.
As government funding helps to build the domestic wind industry and cheap labor continues to support Chinese manufacturing, the “made in China” effect could increase global demand for wind turbines by making them more affordable. Meanwhile, wind power in China continues to boom: “Every year, the country doubles its wind power capacity. At this rate, it’ll blow past the U.S. and become the world’s top producer by 2020.”
Bahrain bank to fund China wind power
Published: July 8, 2008 at 12:30 PM
MANAMA, Bahrain, July 8 (UPI) -- Bahrain-based Arcapita announced a partnership with Singapore's Colossus Holdings.
The $2 billion joint venture is aimed at investing in the development of 1,650 megawatts of wind generation capacity in China.
Arcapita Bank B.S.C., a leading international investment firm, announced it has formed a joint venture partnership with Colossus Holdings, a Singapore-based holding company of the Tanti group, the multibillion-dollar Indian conglomerate, which will invest in a portfolio of wind farms in the Inner Mongolia autonomous region of China.
"We have previously built expertise in this sector, which we are very pleased to be extending through this partnership with the Tanti group," said Atif A. Abdulmalik, Arcapita's chief executive officer.
The joint venture partners have signed a definitive purchase agreement to acquire Honiton Energy Holdings PLC, a high-growth Chinese wind energy generation company, which will build the portfolio.
As well as being Arcapita's first investment in China, the deal is also Arcapita's first asset-based investment in Asia. Arcapita previously developed and then successfully sold a 391-megawatt portfolio of wind farms located in the United Kingdom.
MANAMA, Bahrain, July 8 (UPI) -- Bahrain-based Arcapita announced a partnership with Singapore's Colossus Holdings.
The $2 billion joint venture is aimed at investing in the development of 1,650 megawatts of wind generation capacity in China.
Arcapita Bank B.S.C., a leading international investment firm, announced it has formed a joint venture partnership with Colossus Holdings, a Singapore-based holding company of the Tanti group, the multibillion-dollar Indian conglomerate, which will invest in a portfolio of wind farms in the Inner Mongolia autonomous region of China.
"We have previously built expertise in this sector, which we are very pleased to be extending through this partnership with the Tanti group," said Atif A. Abdulmalik, Arcapita's chief executive officer.
The joint venture partners have signed a definitive purchase agreement to acquire Honiton Energy Holdings PLC, a high-growth Chinese wind energy generation company, which will build the portfolio.
As well as being Arcapita's first investment in China, the deal is also Arcapita's first asset-based investment in Asia. Arcapita previously developed and then successfully sold a 391-megawatt portfolio of wind farms located in the United Kingdom.
Banks to fund large wind farm projects based on cash flows
It will result in project sizes increasing.
N. Ramakrishnan - 2008 The Hindu Business Line
Chennai, Dec. 11 With more multi-national companies looking at setting up large wind farms, banks are now prepared to fund these projects based on their cash flows rather than take recourse to the parent company’s balance sheet.
Experts in the wind energy sector say this is good for the sector as it will result in project sizes increasing. Hitherto, investments in wind farms have been of sizes up to 50 MW, but that will change and larger sized wind independent power projects will come up, according to them.
Infrastructure status
Wind energy does not enjoy infrastructure sector status such as roads, power or ports projects do, according to them. Therefore, banks have been reluctant to go in for non-recourse funding for wind power projects. That is changing because of the attractive tariffs in some progressive States such as Karnataka, Maharashtra and Gujarat.
Shift to IPPs
Till recently, investments in the wind power sector in the country have been mostly for captive purposes and the shift towards IPPs is because of the higher tariffs and electricity regulatory commissions specifying that utilities buy a percentage of power they distribute from renewable sources and the willingness of utilities to sign long-term power purchase agreements.
Multi-national players such as CLP Power of Hong Kong, Acciona and GEI of Spain, BP and domestic private utilities such as Tata Power and Reliance Energy are investing in wind power projects.
Besides, public sector units, including NTPC Ltd and ONGC are also investing in wind energy.
Debt equity ratio
According to sector experts, the debt equity ratio for a typical wind energy project is 70:30, with banks insisting on a higher equity contribution from the promoters in a few projects, in which case the debt equity ratio is around 65:35.
Banks have various methods to secure their monies. They could insist on first right on the assets or insist that project promoters create an escrow account through which revenues from the sale of electricity will flow, according to Mr Sunil Jain, Vice-President, Green Infra, an IDFC private equity enterprise that is setting up a wind farm in Tamil Nadu.
SBI tie-up
Recently, Indian Energy Ltd, promoted by an NRI, tied up with State Bank of India for Rs 90-crore debt for its 25 MW project in Gadag district of Karnataka. Turbines for this project are being supplied by Enercon India and a part of the project has been commissioned and the balance will go on stream shortly.
Dr Pankaj Agarwal, Managing Director and one of the promoters of Indian Energy, told Business Line here recently that the company tied up with SBI for a 11-year loan. He expected the project to break even in eight years. Karnataka offered a tariff of Rs 3.40 a kWh for the first 10 years and had signed a PPA for 20 years. Revenues from carbon trading would account for as much as a fifth of projected cash flows, he said.
Investments
Green Infra is investing Rs 300 crore in a 48 MW (turbines to be supplied by Suzlon and RRB Energy) wind farm in Tamil Nadu. The company is talking to some leading banks for debt for the project, according to Mr Jain. Green Infra is looking to have about 500 MW of wind energy capacity by 2011.
Acciona Wind Energy Pvt Ltd, a subsidiary of Acciona of Spain, has set up a 30 MW wind farm in Karnataka with Vestas turbines at an investment of about Rs 210 crore, according to industry sources. The company went in for a bridge loan from Banco Santander of Spain, which it hopes to replace with debt from a consortium of Indian banks. The Spanish parent has about 3,500 MW of wind energy capacity in Europe, North America, Australia and Asia.
© Copyright 2000 - 2008 The Hindu Business Line
Gabelli to Offer Green Fund
Reuters
Renamed SRI Green Fund Adds New Focus; Enhanced Strategy Starts March 17
RYE, N.Y.--(Business Wire)--
GAMCO Investors, Inc. (NYSE: GBL) today announced that the Board of Directors
(the "Board") of The Gabelli SRI Fund, Inc. (the "Fund"), approved a broadened
"green investing" focus for the Fund through the addition of sustainability
criteria. The Board also approved a name change to Gabelli SRI Green Fund, Inc.
The Fund started investing in June 2007 with an investment objective to seek
capital appreciation through a strategy of investing in companies that act in a
socially responsible manner. Going forward, the Fund will invest at least 80% of
its assets in companies that meet both socially responsible screens as well as
sustainability criteria encompassing green investing. The name change and
enhanced strategy will take effect March 17, 2009.
John M. Segrich, CFA, who heads the Gabelli Green research team, will join
Christopher C. Desmarais as co-portfolio manager for the Gabelli SRI Green Fund.
Mr. Segrich rejoined the Gabelli organization in 2008 and brings his years of
institutional research experience to the Fund.
Commenting on the strategy, Mr. Segrich said, "Green companies around the world
are addressing sustainability issues such as Climate Change, Energy Security and
Independence, Natural Resource Shortages, Organic Living, and Urbanization
through innovative products and services. Moreover, we believe these issues are
accompanied by a series of Economic, Social, and Political (ESP) changes that
have significant global impact and should not be ignored by companies,
investors, or individuals."
Mr. Segrich continued, "Already we have seen the emergence of hundreds of new
companies, as well as the repositioning of existing ones, in the following
subsectors: clean power generation, energy storage, recycling and waste, water,
energy efficiency, transportation solutions, smart grid and distribution,
carbon, forestry, agriculture, and medicine. It is the potential represented by
these trends that we will seek to tap for our investors."
Mr. Desmarais added, "By incorporating sustainability issues into our investment
process and investing in those companies that meet the enhanced criteria, we
believe that we can create value for clients in a socially responsible manner."
GAMCO has a 20+ year history of socially responsible investing, starting in
1987. GAMCO`s SRI roster now includes foundations, endowments, and family
offices. GAMCO also manages a socially responsible investment partnership that
was introduced in 2005.
Gabelli Funds, LLC, the investment adviser to the Fund, is a subsidiary of GAMCO
Investors, Inc., which manages through its subsidiaries more than $20 billion in
assets of mutual funds, closed end funds, partnerships and private advisory
accounts as of 12/31/08.
The Fund`s share price will fluctuate with changes in the market value of the
Fund`s portfolio securities. Stocks are subject to market, economic, and
business risks that cause their prices to fluctuate. When you sell Fund shares,
they may be worth less than what you paid for them. Consequently, you can lose
money by investing in the Fund.
Foreign securities are subject to currency, information, and political risks.
The Fund is subject to the risk that the portfolio securities` private market
values may never be realized by the market, or that the portfolio securities`
prices decline.
The Fund is also subject to the risk that the portfolio manager`s assessment of
the values of the securities the Fund holds may be incorrect, which may result
in a decline in the value of Fund shares. The Fund`s social guidelines as well
as its green investing criteria may cause it to pass up opportunities to buy
securities that may be attractive or cause it to sell securities for reasons at
times or under circumstances that might be unfavorable to the Fund.
Investors should consider carefully the investment objective, risks, charges and
expenses of the fund before investing. The prospectus contains more information
about this and other matters. The prospectus should be read carefully before
investing.
Renamed SRI Green Fund Adds New Focus; Enhanced Strategy Starts March 17
RYE, N.Y.--(Business Wire)--
GAMCO Investors, Inc. (NYSE: GBL) today announced that the Board of Directors
(the "Board") of The Gabelli SRI Fund, Inc. (the "Fund"), approved a broadened
"green investing" focus for the Fund through the addition of sustainability
criteria. The Board also approved a name change to Gabelli SRI Green Fund, Inc.
The Fund started investing in June 2007 with an investment objective to seek
capital appreciation through a strategy of investing in companies that act in a
socially responsible manner. Going forward, the Fund will invest at least 80% of
its assets in companies that meet both socially responsible screens as well as
sustainability criteria encompassing green investing. The name change and
enhanced strategy will take effect March 17, 2009.
John M. Segrich, CFA, who heads the Gabelli Green research team, will join
Christopher C. Desmarais as co-portfolio manager for the Gabelli SRI Green Fund.
Mr. Segrich rejoined the Gabelli organization in 2008 and brings his years of
institutional research experience to the Fund.
Commenting on the strategy, Mr. Segrich said, "Green companies around the world
are addressing sustainability issues such as Climate Change, Energy Security and
Independence, Natural Resource Shortages, Organic Living, and Urbanization
through innovative products and services. Moreover, we believe these issues are
accompanied by a series of Economic, Social, and Political (ESP) changes that
have significant global impact and should not be ignored by companies,
investors, or individuals."
Mr. Segrich continued, "Already we have seen the emergence of hundreds of new
companies, as well as the repositioning of existing ones, in the following
subsectors: clean power generation, energy storage, recycling and waste, water,
energy efficiency, transportation solutions, smart grid and distribution,
carbon, forestry, agriculture, and medicine. It is the potential represented by
these trends that we will seek to tap for our investors."
Mr. Desmarais added, "By incorporating sustainability issues into our investment
process and investing in those companies that meet the enhanced criteria, we
believe that we can create value for clients in a socially responsible manner."
GAMCO has a 20+ year history of socially responsible investing, starting in
1987. GAMCO`s SRI roster now includes foundations, endowments, and family
offices. GAMCO also manages a socially responsible investment partnership that
was introduced in 2005.
Gabelli Funds, LLC, the investment adviser to the Fund, is a subsidiary of GAMCO
Investors, Inc., which manages through its subsidiaries more than $20 billion in
assets of mutual funds, closed end funds, partnerships and private advisory
accounts as of 12/31/08.
The Fund`s share price will fluctuate with changes in the market value of the
Fund`s portfolio securities. Stocks are subject to market, economic, and
business risks that cause their prices to fluctuate. When you sell Fund shares,
they may be worth less than what you paid for them. Consequently, you can lose
money by investing in the Fund.
Foreign securities are subject to currency, information, and political risks.
The Fund is subject to the risk that the portfolio securities` private market
values may never be realized by the market, or that the portfolio securities`
prices decline.
The Fund is also subject to the risk that the portfolio manager`s assessment of
the values of the securities the Fund holds may be incorrect, which may result
in a decline in the value of Fund shares. The Fund`s social guidelines as well
as its green investing criteria may cause it to pass up opportunities to buy
securities that may be attractive or cause it to sell securities for reasons at
times or under circumstances that might be unfavorable to the Fund.
Investors should consider carefully the investment objective, risks, charges and
expenses of the fund before investing. The prospectus contains more information
about this and other matters. The prospectus should be read carefully before
investing.
Biocarburants: un nouvel âge
Par Pierre Veya - Le Temps
Le bruit médiatique dissimule souvent les évolutions véritables, celles qui vont imposer de nouvelles pratiques
Le bruit médiatique dissimule souvent les évolutions véritables, celles qui vont imposer de nouvelles pratiques. C’est très précisément ce qui se passe dans le domaine très controversé des biocarburants. Célébrés, puis tout aussi rapidement voués aux gémonies, les carburants produits à partir de la biomasse entrent pourtant dans un nouvel âge, celui de la certification. La Suisse, on le sait peu, joue un rôle pionnier dans ce processus. Alcosuisse en collaboration avec l’EPFL et des partenaires privés travaillent à la création d’un label pour le bioéthanol (etha STAR*) et le biodiesel (fame STAR) qui définit des critères très stricts pour la production et la distribution d’essence verte.
Ce processus de labellisation répond aux objectifs des ordonnances fédérales qui détaxent les carburants verts indigènes ou importés. Un label ira plus loin. Il pose des exigences très sévères: l’usage du bioéthanol ou du biodiesel devra engendrer un gain de 40% dans la réduction de gaz à effet de serre sur l’ensemble du cycle; la production ne pourra pas mettre en danger la diversité biologique ou empiéter sur des zones sensibles (forêts tropicales, zones humides, etc.); les conditions de production devront respecter au minimum les conventions fondamentales de l’OIT (Organisation internationale du travail). Concrètement, la production d’essence verte à partir de déchets agricoles ou sylvicoles obéit en tous points à ces exigences. Certains pays comme la Suède, la Grande-Bretagne ou l’Allemagne, la Californie tout récemment, ont engagé un processus de certification comparable à celui envisagé par la Suisse. Des critères sévères, on peut en déduire que les importations de bioéthanol américain provenant de raffineries alimentées au charbon par exemple, d’huile de palme issue de plantations implantées sur d’anciennes forêts vierges ou d’éthanol issu de firmes brésiliennes peu respectueuses des conditions de travail de leurs employés seraient prohibées.
A terme, les labels limiteront les possibilités de produire des biocarburants à partir de produits agricoles nobles (blé, maïs, colza, etc.) ou de terres ayant une grande valeur écologique. Ils offriront en revanche aux consommateurs la certitude que les «biocarburants ne sont pas une fausse bonne idée». Pour le professeur Edgard Gnansounou, qui dirige à l’EPFL les travaux sur la certification des biocarburants, la labellisation permettra de lever les obstacles environnementaux majeurs à la commercialisation de l’«essence verte». Pour Pierre Schaller, directeur d’Alcosuisse, la branche commerciale de la Régie fédérale des alcools, le standard suisse devra être «exemplaire» pour s’imposer au-delà des frontières helvétiques. Il espère que le produit sera disponible dans quelques mois.
Bien évidemment, le processus de labellisation des biocarburants se heurtera tôt ou tard aux règles du libre-échange de l’OMC. Les conflits sont en effet programmés: les pays du Sud craignent que les pays du Nord en profitent pour verrouiller leurs frontières et discriminer leurs concurrents. Les conflits ont déjà commencé. Par exemple, l’Europe reproche aux Etats-Unis son dumping dans la production de biodiesel et le Brésil se bat pour accéder aux marchés européen et américain. La labellisation des biocarburants mettra à rude épreuve les nerfs des négociateurs à l’OMC qui ne savent pas comment intégrer les normes environnementales et sociales dans les échanges commerciaux sans créer des distorsions de concurrence. Adoptés sur une base volontaire, les labels prennent de vitesse des discussions qui s’annoncent très difficiles sur le plan multilatéral. Les labels sur les biocarburants préfigurent sans doute un mouvement général qui vise à améliorer la traçabilité des produits et à rendre visible pour le consommateur final leur empreinte écologique. Aux Etats-Unis, le débat, longtemps confiné au monde académique, prend de l’ampleur. A tel point que l’Association des producteurs de biocarburants insiste désormais sur la nécessité de passer rapidement aux productions de deuxième et troisième générations, utilisant des déchets ou des plantes n’entrant pas en concurrence avec la production alimentaire. C’est peut-être le paradoxe: les biocarburants si décriés pourraient accélérer les processus de la labellisation environnementale qui valorisent les productions respectant des critères environnementaux ou sociaux. Les pays du Sud y voient un risque de protectionnisme déguisé et le lobby pétrolier craint de devoir s’expliquer sur les conditions d’extraction de l’or noir qui ne sont jamais prises en compte et rarement connues.
Pour les investisseurs dans la filière des biocarburants, la labellisation fixe un cap qu’il serait dangereux à terme de vouloir contourner. Pour s’imposer et prendre une part de marché aux produits pétroliers, les biocarburants devront faire la démonstration qu’ils améliorent le bilan du CO2 dans les transports et s’insèrent dans une économie durable et respectueuse des écosystèmes. L’enjeu devient considérable. Et une fois de plus, tous les regards se tournent vers les Etats-Unis. Le président Barack Obama a mis la barre très haut: il vient de fixer la part des biocarburants à 30% d’ici à 2030. Un tel objectif exigera la création d’une véritable industrie de la bioénergie et la mise en place rapide de filières de deuxième et troisième générations. En Europe, où les critères de production sont d’emblée plus exigeants, les ambitions sont plus modestes (10% de l’essence d’ici à 2020). Comme toujours les Etats-Unis déterminent une stratégie et règlent les problèmes au fur et à mesure qu’ils se présentent. En Europe, les gouvernements ont choisi d’imposer des garanties avant d’autoriser une production de masse. Pour les industriels, l’Europe ne se trompe pas en fixant des exigences environnementales sévères mais ses ambitions dans les évolutions technologiques demeurent trop modestes. Alors que les Etats-Unis investissent plus d’un milliard de dollars dans le développement de bio-raffineries expérimentales destinées à des productions biocarburants de seconde et troisième générations, de bioplastiques et de fibres, l’Union européenne, elle, n’y consacre qu’une centaine de millions d’euros. A l’inverse, la Chine observe de très près ce qui se passe aux Etats-Unis et annonce qu’elle va accélérer le pas. Les biocarburants arrivent, ils devront être «propres» pour s’imposer. L’Europe et la Suisse auront eu le mérite de le rappeler mais tout montre qu’ils ont toutefois oublié d’investir en se lançant d’emblée dans un procès de diabolisation des carburants verts.
* Fondements pour l’établissement de labels pour les biocarburants liquides: www.eners.ch
Le bruit médiatique dissimule souvent les évolutions véritables, celles qui vont imposer de nouvelles pratiques
Le bruit médiatique dissimule souvent les évolutions véritables, celles qui vont imposer de nouvelles pratiques. C’est très précisément ce qui se passe dans le domaine très controversé des biocarburants. Célébrés, puis tout aussi rapidement voués aux gémonies, les carburants produits à partir de la biomasse entrent pourtant dans un nouvel âge, celui de la certification. La Suisse, on le sait peu, joue un rôle pionnier dans ce processus. Alcosuisse en collaboration avec l’EPFL et des partenaires privés travaillent à la création d’un label pour le bioéthanol (etha STAR*) et le biodiesel (fame STAR) qui définit des critères très stricts pour la production et la distribution d’essence verte.
Ce processus de labellisation répond aux objectifs des ordonnances fédérales qui détaxent les carburants verts indigènes ou importés. Un label ira plus loin. Il pose des exigences très sévères: l’usage du bioéthanol ou du biodiesel devra engendrer un gain de 40% dans la réduction de gaz à effet de serre sur l’ensemble du cycle; la production ne pourra pas mettre en danger la diversité biologique ou empiéter sur des zones sensibles (forêts tropicales, zones humides, etc.); les conditions de production devront respecter au minimum les conventions fondamentales de l’OIT (Organisation internationale du travail). Concrètement, la production d’essence verte à partir de déchets agricoles ou sylvicoles obéit en tous points à ces exigences. Certains pays comme la Suède, la Grande-Bretagne ou l’Allemagne, la Californie tout récemment, ont engagé un processus de certification comparable à celui envisagé par la Suisse. Des critères sévères, on peut en déduire que les importations de bioéthanol américain provenant de raffineries alimentées au charbon par exemple, d’huile de palme issue de plantations implantées sur d’anciennes forêts vierges ou d’éthanol issu de firmes brésiliennes peu respectueuses des conditions de travail de leurs employés seraient prohibées.
A terme, les labels limiteront les possibilités de produire des biocarburants à partir de produits agricoles nobles (blé, maïs, colza, etc.) ou de terres ayant une grande valeur écologique. Ils offriront en revanche aux consommateurs la certitude que les «biocarburants ne sont pas une fausse bonne idée». Pour le professeur Edgard Gnansounou, qui dirige à l’EPFL les travaux sur la certification des biocarburants, la labellisation permettra de lever les obstacles environnementaux majeurs à la commercialisation de l’«essence verte». Pour Pierre Schaller, directeur d’Alcosuisse, la branche commerciale de la Régie fédérale des alcools, le standard suisse devra être «exemplaire» pour s’imposer au-delà des frontières helvétiques. Il espère que le produit sera disponible dans quelques mois.
Bien évidemment, le processus de labellisation des biocarburants se heurtera tôt ou tard aux règles du libre-échange de l’OMC. Les conflits sont en effet programmés: les pays du Sud craignent que les pays du Nord en profitent pour verrouiller leurs frontières et discriminer leurs concurrents. Les conflits ont déjà commencé. Par exemple, l’Europe reproche aux Etats-Unis son dumping dans la production de biodiesel et le Brésil se bat pour accéder aux marchés européen et américain. La labellisation des biocarburants mettra à rude épreuve les nerfs des négociateurs à l’OMC qui ne savent pas comment intégrer les normes environnementales et sociales dans les échanges commerciaux sans créer des distorsions de concurrence. Adoptés sur une base volontaire, les labels prennent de vitesse des discussions qui s’annoncent très difficiles sur le plan multilatéral. Les labels sur les biocarburants préfigurent sans doute un mouvement général qui vise à améliorer la traçabilité des produits et à rendre visible pour le consommateur final leur empreinte écologique. Aux Etats-Unis, le débat, longtemps confiné au monde académique, prend de l’ampleur. A tel point que l’Association des producteurs de biocarburants insiste désormais sur la nécessité de passer rapidement aux productions de deuxième et troisième générations, utilisant des déchets ou des plantes n’entrant pas en concurrence avec la production alimentaire. C’est peut-être le paradoxe: les biocarburants si décriés pourraient accélérer les processus de la labellisation environnementale qui valorisent les productions respectant des critères environnementaux ou sociaux. Les pays du Sud y voient un risque de protectionnisme déguisé et le lobby pétrolier craint de devoir s’expliquer sur les conditions d’extraction de l’or noir qui ne sont jamais prises en compte et rarement connues.
Pour les investisseurs dans la filière des biocarburants, la labellisation fixe un cap qu’il serait dangereux à terme de vouloir contourner. Pour s’imposer et prendre une part de marché aux produits pétroliers, les biocarburants devront faire la démonstration qu’ils améliorent le bilan du CO2 dans les transports et s’insèrent dans une économie durable et respectueuse des écosystèmes. L’enjeu devient considérable. Et une fois de plus, tous les regards se tournent vers les Etats-Unis. Le président Barack Obama a mis la barre très haut: il vient de fixer la part des biocarburants à 30% d’ici à 2030. Un tel objectif exigera la création d’une véritable industrie de la bioénergie et la mise en place rapide de filières de deuxième et troisième générations. En Europe, où les critères de production sont d’emblée plus exigeants, les ambitions sont plus modestes (10% de l’essence d’ici à 2020). Comme toujours les Etats-Unis déterminent une stratégie et règlent les problèmes au fur et à mesure qu’ils se présentent. En Europe, les gouvernements ont choisi d’imposer des garanties avant d’autoriser une production de masse. Pour les industriels, l’Europe ne se trompe pas en fixant des exigences environnementales sévères mais ses ambitions dans les évolutions technologiques demeurent trop modestes. Alors que les Etats-Unis investissent plus d’un milliard de dollars dans le développement de bio-raffineries expérimentales destinées à des productions biocarburants de seconde et troisième générations, de bioplastiques et de fibres, l’Union européenne, elle, n’y consacre qu’une centaine de millions d’euros. A l’inverse, la Chine observe de très près ce qui se passe aux Etats-Unis et annonce qu’elle va accélérer le pas. Les biocarburants arrivent, ils devront être «propres» pour s’imposer. L’Europe et la Suisse auront eu le mérite de le rappeler mais tout montre qu’ils ont toutefois oublié d’investir en se lançant d’emblée dans un procès de diabolisation des carburants verts.
* Fondements pour l’établissement de labels pour les biocarburants liquides: www.eners.ch
3/25/2009
Julius Baer launches agricultural fund
24 March 2009 - Tara Loader Wilkinson
Julius Baer, the Swiss private bank, is launching an agricultural and commodities fund in the UK, as the bank sees surging demand for products related to food, fertilisers and biofuels.
The Zurich-based bank said agriculture sector offers a compelling buying opportunity - many stocks are significantly undervalued when taking into account the expected growth estimations for the industry. The target allocation of the fund is 75% equities and 25% commodity securities and indices. The combination of agricultural equities and commodity exposure provides additional diversification benefits.
The fund is co-managed by Sabre Mayhugh and Belinda Cavazos of Wellington Management Company , the external fund manager, which manages approximately $1bn in dedicated agriculture portfolios.
Sabre Mayhugh said: “The increased demand for grain, meat products, fertiliser and biofuels, largely as a result of a higher standard of living in the developing countries, makes a convincing argument for investing in the agriculture sector, especially at current prices."
Tags: Julius Baer , Wellington Management Company
Julius Baer, the Swiss private bank, is launching an agricultural and commodities fund in the UK, as the bank sees surging demand for products related to food, fertilisers and biofuels.
The Zurich-based bank said agriculture sector offers a compelling buying opportunity - many stocks are significantly undervalued when taking into account the expected growth estimations for the industry. The target allocation of the fund is 75% equities and 25% commodity securities and indices. The combination of agricultural equities and commodity exposure provides additional diversification benefits.
The fund is co-managed by Sabre Mayhugh and Belinda Cavazos of Wellington Management Company , the external fund manager, which manages approximately $1bn in dedicated agriculture portfolios.
Sabre Mayhugh said: “The increased demand for grain, meat products, fertiliser and biofuels, largely as a result of a higher standard of living in the developing countries, makes a convincing argument for investing in the agriculture sector, especially at current prices."
Tags: Julius Baer , Wellington Management Company
3/23/2009
Hudson Clean Energy Wins $400M Mandate From Danish Pension Fund
March 19, 2009 Clean Tech Brief
The $72.4 billion Danish pension fund ATP is investing up to $400 million (2.2 billion Danish kroner) in alternative energy through U.S.-based private equity firm Hudson Clean Energy Partners.
The investments will be made in traditional renewable energies such as solar, wind and hydro, and also in new forms of energy like biofuels and biomass.
"ATP's investment in Hudson Clean Energy is a new step in ATP's climate-related bet,” said Lars Rohde, director of the pension fund. "This investment will give us direct access to new knowledge about climate-related technologies that can be used in our future investments."
The Teaneck, New Jersey-based Hudson Clean Energy Partners was founded by Goldman Sachs veteran Neil Auerbach. The firm focuses on late stage investing in renewable power, alternative fuels, energy efficiency and storage.
The $72.4 billion Danish pension fund ATP is investing up to $400 million (2.2 billion Danish kroner) in alternative energy through U.S.-based private equity firm Hudson Clean Energy Partners.
The investments will be made in traditional renewable energies such as solar, wind and hydro, and also in new forms of energy like biofuels and biomass.
"ATP's investment in Hudson Clean Energy is a new step in ATP's climate-related bet,” said Lars Rohde, director of the pension fund. "This investment will give us direct access to new knowledge about climate-related technologies that can be used in our future investments."
The Teaneck, New Jersey-based Hudson Clean Energy Partners was founded by Goldman Sachs veteran Neil Auerbach. The firm focuses on late stage investing in renewable power, alternative fuels, energy efficiency and storage.
3/21/2009
Le potentiel d’efficacité tout au long de la chaîne énergétique
Par Konrad Wirthensohn* ABB - Le Temps 23 Fev 09
Le potentiel est gigantesque, car 20% seulement des énergies disponibles créent effectivement une valeur économique
Les technologies permettant de mieux utiliser l’énergie disponible contribuent considérablement aux économies d’énergie. Les produits disponibles contribuent à baisser les pertes de près d’un quart tout au long de la chaîne énergétique, de la production à la consommation.
Comment maîtriser les risques d’approvisionnement accrus? Comment réduire la pollution? La manière la plus rapide, praticable et rentable de faire des économies passe par l’utilisation plus efficace de l’énergie à l’aide de technologies existantes et éprouvées. Le potentiel est gigantesque, car 20% seulement des énergies disponibles créent effectivement une valeur économique. Le reste se perd le long de la chaîne de création de valeur, de la production d’énergie à sa consommation dans l’industrie et les foyers, en passant par le transport, sous forme de chaleur dissipée dans les processus de combustion, lors de la transmission et par une consommation électrique inefficiente.
Les technologies permettent de baisser les pertes de près d’un quart tout au long de cette chaîne énergétique, en réduisant la consommation en électricité, en augmentant la productivité ou en assurant une meilleure gestion des installations.
La production de sources d’énergie primaires telles que le pétrole, le gaz naturel et le charbon engloutit elle-même beaucoup d’énergie. Les combustibles fossiles sont transportés par des oléoducs et gazoducs, mais aussi par bateau. Plus de la moitié des gros cargos des océans et un grand nombre de centrales diesel sont équipés de turbocompresseurs, qui augmentent jusqu’à 300% la puissance des moteurs.
Dans les énergies renouvelables, des technologies aux centrales hydroélectriques et éoliennes ainsi qu’aux installations photovoltaïques peuvent être utilisées. En raison des lois physiques, l’efficience de conversion moyenne dans la production d’électricité conventionnelle se monte à 40%. Les technologies de production s’améliorent continuellement et approchent les pertes de leur valeur théorique limite – notamment grâce aux processus de commande optimisés des centrales.
Sur la quantité d’électricité partant de la centrale, près de 6 à 8% ne parviennent jamais au consommateur final. Plus la distance de transport est grande, plus les pertes sont importantes. Pourtant, nous sommes tributaires d’une électricité provenant de sources énergétiques très distantes telles que les parcs éoliens offshore, les centrales hydroélectriques, tout comme du commerce énergétique international.
Des systèmes de transport optimisés sont donc indispensables: la technologie la plus efficace pour ce faire est le transport de courant continu à haute tension (CCHT), engendrant des pertes bien inférieures sur de longues distances à celles du transport de courant alternatif. Les modules semi-conducteurs requis sont produits à Lenzburg.
Près de 40% de l’électricité produite est consommée par l’industrie. En accroissant la productivité des usines ou en équipant les ateliers de systèmes d’automatisation ultramodernes et de dispositifs électriques, de substantielles économies énergétiques peuvent être obtenues. Au rang des technologies clés, des systèmes de contrôle-commande, des logiciels d’entreprise, une technique de mesure, des produits basse tension, des entraînements, des moteurs et des robots. Ainsi, les entraînements à régulation de vitesse peuvent baisser la consommation d’énergie des moteurs électriques de 50% et plus, en adaptant la vitesse à la puissance demandée.
Le potentiel est énorme: plus de 90% des moteurs industriels installés ne sont guère capables d’adapter leur consommation. Dans de nombreuses applications, la division par deux de la vitesse peut réduire la consommation électrique à un huitième. En 2007, les moteurs électriques et entraînements à économie d’énergie d’ABB ont économisé plus de 130 terawattheures d’électricité dans le monde, soit près du cinquième de la consommation d’énergie de tous les foyers suisses en 2007.
Les bâtiments industriels, administratifs et d’habitation représentent près de 38% des besoins énergétiques mondiaux. Avec une adaptation de la température de chauffe, de l’éclairage et de la consommation des appareils électriques aux différentes exigences, il est possible d’obtenir de belles économies d’énergie – p. ex. avec des appareils basse tension ou des systèmes de commande et de bâtiment. Une simple régulation efficace de la température peut faire gagner jusqu’à 30% d’énergie.
Tous ces exemples témoignent du fait que certains fabricants, tout au long de la chaîne énergétique allant de la production au consommateur final, peuvent apporter une contribution considérable aux économies d’énergie et participe, avec ses propres technologies, à relever les grands défis d’aujourd’hui et de demain.
*Chef du Steering Committee Efficacité Energétique d’ABB Suisse
Poursuite du supercycle des matières premières
Par Roland Pfeuti* Le Temps - 23 Fev
Il faut s’attendre à ce que 2009 offre des possibilités intéressantes d’accès aux matières premières
On sait que tous les marchés des matières premières sont soumis à une dynamique particulière de l’offre et de la demande. Les cycles correspondants durent généralement plusieurs années.
Dans ce domaine, les allocations de portefeuille sont réalisées de préférence lorsque les prix des matières premières se situent en dessous des coûts de production marginaux, de sorte que les investissements dans de nouvelles installations de production et de transport ne sont pas rentables pour les acteurs du marché. A l’heure actuelle, de nombreux marchés importants de matières premières comme le pétrole, différents métaux lourds non ferreux et des matières agricoles se trouvent exactement dans cette phase et d’autres viendront s’y ajouter dans les prochains mois, dans le sillage de la récession mondiale et de la réduction massive des capacités de production.
Il faut donc s’attendre à ce que 2009 offre des possibilités intéressantes d’accès aux matières premières. Comparé aux marchés d’actions, le redressement des prix a généralement lieu assez rapidement et pourrait être accentué par les plans de relance conjoncturelle massifs de nombreux pays industrialisés et émergents.
Les tendances à moyen et long terme, qui laissent présager un changement fondamental dans l’offre et la demande de nombreuses matières premières, sont restées inchangées en dépit de la crise financière et du crédit. Il s’agit essentiellement ici de l’augmentation inexorable de la demande faisant suite aux évolutions démographiques mondiales, de la prospérité croissante dans les pays émergents et de la progression de l’urbanisation. Côté offre, de nombreuses matières premières importantes ne sont pas inépuisables et les coûts de production marginaux augmentent de façon disproportionnée. C’est le cas par exemple du pétrole, où les coûts de production des grandes réserves encore inépuisées, comme les réserves offshore sur le littoral brésilien ou les sables pétrolifères d’Alaska, sont évalués à 60-90 USD par baril.
Dans quelque temps, il devrait également apparaître que la crise du crédit renforce le super cycle des matières premières plutôt que de le ralentir. Cela est dû aux allocations mondiales de capitaux de ces dernières années, qui ont révélé une tendance à des investissements élevés dans le domaine immobilier et financier et à de faibles investissements dans des domaines tels que l’infrastructure, l’énergie, l’eau et l’agriculture.
De nombreux experts des matières premières, dont le conseiller en placement du Julius Baer Commodity Fund, Diapason Commodities Management, établi à Lausanne, ont déjà pronostiqué un net redressement des prix des matières premières pour l’année en cours.
Par le passé, en période de récession, les prix des valeurs réelles comme l’or et les matières premières se sont toujours rétablis avant les marchés d’actions.
Dans le cadre de ces estimations du marché, on a pu observer aux Etats-Unis de nets afflux de fonds dans les Commodity Funds au cours des semaines passées. Les Commodity ETF, par exemple, ont affiché en décembre 2008 un afflux de fonds de quelque 10%.
Julius Baer mise tout particulièrement sur le RICI®EnhancedSM, l’un des indices de matières premières les plus largement diversifiés. Son univers de placement s’étend actuellement sur 37 composants de matières premières.
*Spécialiste produits, Julius Baer
Enfin des plans de relance verts
Par César de Brito* - 23 Fev - Le Temps
Tous les pays vont dans le même sens en même temps et c’est l’essentiel
Au moment où Barack Obama signe un plan de relance de 787 milliards de dollars avec 92 milliards dédiés à l’environnement, beaucoup jugent que la crise financière aura au moins ouvert la porte aux bonnes «nouvelles» idées, mais s’agit-il vraiment de nouvelles idées? Le Club de Rome publiait déjà en 1972 un rapport sur le besoin de prendre en compte la préservation de l’environnement pour assurer notre croissance. La commission de Brundtland publiait en 1987 son rapport sur le besoin d’orienter nos économies vers un développement durable. Mais il aura fallu près de quarante ans pour que les gouvernements se mobilisent sur ces «nouvelles» idées.
Des plans de relance verts représentant plus de 1200 milliards d’euros ont été annoncés par différents pays dans le monde en plein cœur de la crise financière. Barack Obama bien sûr, mais aussi José Manuel Barroso, Nicolas Sarkozy et Gordon Brown ont affiché des objectifs clairs dans ces secteurs pour les dix prochaines années. Quatre cents milliards d’euros en France suite au Grenelle de l’Environnement, 250 milliards de dollars en Chine ou encore 38 milliards de dollars en Corée du Sud. Bien qu’il ait retenu le plus l’intérêt médiatique, le plan Obama est donc finalement dans la moyenne basse en termes d’engagement. Mais l’important est ici la dynamique: tous les pays vont dans le même sens en même temps.
La question est désormais de savoir comment cet argent va être dépensé.
Là encore, les pratiques varient d’un pays à l’autre. Certains pays utiliseront ces fonds pour baisser les taxes tandis que d’autres passeront commande d’investissements en infrastructures. Cependant, un certain nombre de secteurs font l’unanimité: les énergies renouvelables avec notamment l’éolien et le solaire, l’isolation, le secteur des traitements des déchets et de l’eau et les transports publics. Les Etats-Unis y ajoutent un plan d’investissement dans l’infrastructure de réseaux électriques, notamment dans le «smart grid» ou les réseaux intelligents permettant de faire des économies d’énergie.
Ces plans arrivent au bon moment mais pouvait-on se permettre d’attendre plus longtemps?
Aux Etats-Unis, la demande d’électricité a augmenté de 25% depuis 1990 alors que la construction de nouvelles lignes de transmissions a baissé de 30%. Le résultat est une congestion du réseau, impliquant une perte d’efficacité et donc une électricité plus chère. Même phénomène au niveau des infrastructures d’eau: les canalisations de la ville de New York, âgées de près d’un siècle, connaissent des taux de pertes de l’ordre de 80%. Un sous-investissement chronique ne peut durer et les investissements nécessaires devront être faits tôt ou tard.
L’Europe est également en retard. Une étude du cabinet Ecofys a démontré que l’isolation des bâtiments en Europe aux normes actuelles permettrait d’éviter par année l’émission de 460 millions de tonnes de CO2 ou, en termes financiers, une économie de 270 milliards d’euros (avec une hypothèse du baril à 70 dollars).
Alors pourquoi avoir autant attendu? La réponse est simple: les décisions d’investissements portaient sur des analyses de rentabilité à court terme. Personne n’était prêt à investir pour le long terme avant que la contrainte soit réellement forte.
La performance boursière des titres des secteurs verts reflète elle aussi cet état d’esprit. Beaucoup d’investisseurs recherchent des profits à court terme. Au début de la crise actuelle, alors que les bonnes nouvelles réglementaires s’accumulaient, le secteur des énergies renouvelables a connu sa plus forte baisse: l’indice S&P Clean Energy a cédé 63% en 2008. Les valorisations actuelles du secteur se sont compressées avec un ratio cours sur bénéfice moyen de 11 pour 2009, alors que la croissance moyenne attendue des bénéfices par action est de 8% après révision à la baisse des analystes. Nous pouvons dire que le marché continue de douter des perspectives du secteur. Certes nous avons vu un léger rebond, comme l’ensemble des entreprises cycliques, par rapport aux niveaux les plus bas de novembre 2008, mais il n’intègre pas l’ensemble de bonnes nouvelles liées aux plans de relance. 2009 sera une année de transition, où nous verrons l’impact progressif de l’ensemble de ces plans sur les secteurs verts. Pour un investisseur de long terme, les cours actuels sont intéressants tant en termes de prix que de risques associés.
* Gérant du fonds LODH Clean Tech
Le climat n’attendra pas la fin de la récession
Par Eckhard Plinke - Le Temps 23 Fev 2009
Eckhard Plinke, chef de la recherche en développement durable pour Sarasin, porte un regard critique sur les matières premières
Le Temps: Quel regard portez-vous sur les matières premières sous l’angle du développement durable?
Eckhard Plinke: Pour des raisons éthiques, nous sommes très réservés à l’égard des investissements en matières premières puisqu’ils ne sont pas durables. L’objectif est de réduire la consommation des matières premières du fait de la limitation des ressources et du réchauffement climatique.
– Quel est l’effet de la spéculation sur les matières premières?
– La spéculation sur le prix des produits agricoles est un thème relativement discuté. Il en ressort que la spéculation est avant tout un symptôme plutôt qu’une cause de la hausse. Les études indiquent un effet sensible sur le volume d’activité, mais c’est moins clair sur les prix.
Sur le pétrole, les investissements financiers ont diminué pendant que les prix se sont envolés. Pour le maïs, la relation était inverse.
– Que démontrent vos recherches sur les différences entre matières premières sous l’angle du développement durable?
– Notre analyse des matières premières sous le seul angle du développement durable porte avant tout sur la disponibilité des ressources à long terme.
Les matières premières énergétiques sont moins durables que les autres et plus sensibles à une substitution. Les matières premières agricoles sont les plus durables. Personne ne peut naturellement renoncer à ces ressources. Les métaux industriels se situent au milieu, entre l’énergie et les produits agricoles.
Le deuxième critère, à court terme, porte sur la situation environnementale et sociale actuelle. Les différences varient d’une matière première à l’autre. Dans l’énergie, le gaz naturel est sans doute le plus avantageux, en raison de ses moindres émissions, et le charbon le pire.
Dans les produits agricoles, nous intégrons les facteurs sociaux, tels que l’impact positif ou non des produits sur les pays en développement.
Le bilan durable du blé, du coton (charge environnementale forte à travers l’emploi d’eau de pesticides) ou de la viande est bien moins favorable que celui du café, du cacao ou du riz.
– Comment mesurez-vous exactement ces différences?
– Pour le bilan durable, nous utilisons la «Matrice Sarasin», qui intègre de façon très visuelle les deux niveaux de responsabilité à partir des risques ESG (Environnement, Social, Gouvernance): celle du secteur et celle de l’entreprise. Au cas des matières premières, l’axe horizontal mesure la disponibilité des ressources et l’axe vertical la production et la consommation actuelle. Il en ressort que les énergies présentent un bilan très négatif sous l’angle de la disponibilité. Les métaux se placent entre l’énergie et les produits agricoles.
– Quelles sont les matières premières qui répondent suffisamment à vos critères pour permettre un placement?
– Dans l’énergie, il y a le gaz, dans les métaux le nickel, le zinc, l’acier, l’or, le platine, et dans les produits agricoles le café, le cacao, le sucre, le soja, le maïs. Nous n’avons pas analysé l’uranium, mais, selon nos critères, il est problématique.
– Quelle est votre opinion des compagnies électriques sous l’angle de la durabilité?
– La réponse est différenciée. Nous excluons les sociétés d’électricité de nos produits standards en raison de leur production nucléaire. Mais il faut aussi considérer la part du nucléaire dans l’ensemble des affaires. Certaines entreprises sont avant tout des groupes présents dans l’hydraulique et les énergies renouvelables. Je pense à Verbund-Austria. D’autres sont très forts dans le gaz naturel. Mais notre note durable des sociétés actives dans le pétrole et le charbon est plutôt négative.
– Et les groupes suisses?
– En raison de leurs activités dans le nucléaire, la plupart sont exclus de nos portefeuilles. Seul Rätia Energie, dans les Grisons, entre en considération. Leurs plans dans le charbon nous incitent toutefois à les placer sous observation.
– Comment investissez-vous à partir des thèmes du développement durable?
– Nous avons des fonds de placement spécifiques tels que sur l’eau, l’énergie, la consommation durable, l’économie du savoir (formation, infrastructures). Ces fonds investissent essentiellement dans des actions, mais aussi en obligations.
– Quelles leçons tirez-vous de la crise financière pour les énergies renouvelables?
– Deux tendances se sont développées sur les énergies renouvelables l’année dernière. D’abord la forte hausse du pétrole, qui a soutenu la hausse des énergies renouvelables. Dans un deuxième temps, avec la chute de l’or noir, la crise financière et la récession, les investissements et leur financement ont été sérieusement freinés.
Les actions des énergies vertes ont plongé, davantage que la moyenne, mais économiquement les résultats étaient encore fantastiques, avec une hausse mondiale de 70% des installations photovoltaïques et une hausse de 35% des turbines à éoliennes.
L’industrie a gagné en maturité. Les coûts de production ont baissé. Certes la compétitivité des énergies renouvelables a été pénalisée par la baisse des prix du pétrole. Mais dans plusieurs régions, la baisse des coûts a permis à l’énergie éolienne de concurrencer les énergies fossiles.
– Quel est votre scénario durable pour ces deux prochaines années?
– Il est à la fois difficile et cher de financer des projets. Mais dès que le système se sera stabilisé, probablement dès le milieu de l’année, les perspectives positives à long terme reprendront le dessus. N’oublions pas que le réchauffement climatique n’attend pas la fin de la récession.
En outre, de nouveaux acteurs entrent en jeu, les producteurs d’électricité, qui renforcent la demande. Ils sont financièrement solides et peuvent investir.
La récession frappe surtout le consommateur, lequel a d’autres soucis que de passer au solaire. Mais le gouvernement Obama est très actif et soutient l’efficience énergétique et les énergies renouvelables. On parle de 70 milliards de dollars.
La tendance est en train de changer aux Etats-Unis. La Floride va lancer un programme qui offre un rabais sur le prix du courant pour les immeubles équipés d’installations solaires. En Europe, l’objectif est d’atteindre 20% d’énergies renouvelables en 2020. Il n’a pas été modifié par la récession. Dans l’énergie solaire, la croissance mondiale devrait atteindre 17% cette année et s’accélérer ensuite à 40-50%. La demande sera stimulée par la baisse des prix.
– Quelles sont les perspectives des énergies renouvelables?
– Tous les fonds en énergies renouvelables ont beaucoup souffert en 2008. Des rachats de parts ont été enregistrés, mais cette année nous bénéficions à nouveau d’afflux de fonds. Les évaluations sont très attractives et si l’on croit au potentiel à long terme de ces énergies, c’est une occasion unique. Elle ne se produit qu’une fois par génération. Mais rien ne sert de se précipiter. La banque privilégie encore la prudence à court terme.
3/19/2009
Art : La lumière des Alpes selon Alexandre Perrier
Décanté, l'Art de Alexandre Perrier traduit aussi bien les variations d'une manière de lumière intérieure que les effets atmosphériques, ou plus précisément un accord intime entre les deux. La mise au point et la maîtrise d'une touche pointilliste très fine permettent à l'artiste d'atteindre à une transparence, qui donne le sentiment de la vastitude, d'une prise de distance méditative. Dans un esprit proche de celui de Georges Seurat, le peintre genevois synthétise ses contours et analyse les effets chromatiques. D'où l'alliage d'une manière très méticuleuse, qui rend justice aux touffes d'herbe et aux cimes des sapins, et d'une vision générale où, par exemple, les tonalités lumineuses du couchant sur les cimes à l'arrière-plan entraînent le regard vers les lointains.
Art : Amerique panoramique - Kim Matthews Wheaton
Amérique panoramique
D'immenses cultures sur lesquelles court l'ombre des nuabes, des routes qui ne mènent nulle part, des lacsdans la brume automnale, le bléqui roussit dans la torpeur de l'été, l'orage qui menance. Les paysages de Kim Matthews Wheaton sont faussement impassibles. Il s'y passe toujours quelque chose, le frémissement des heures, le passage des saisons. Et c'est l'horizon, ce vide devant soi, qui inspire encore et toujours cette amoureuse de la nature et du silence.
3/12/2009
Americas Wind Energy Corporation (Nasdaq: AWNE): Stock of the Day
by David Fessler, Advisory Panelist, Investment U
The World’s Largest “Air” Force…
Mention “Air Force One” to someone here in the U.S. and visions of a Boeing 747-400 with the Presidential Seal on the side quickly come to mind.
But now there’s another new meaning associated with the phrase, and it’s good news for the guy that gets to ride in the jet.
In 2008 America became the global force in wind-generated electricity. President Obama can take heart in the fact that his pledge to cut imports of foreign oil is already underway, at least in the wind power arena.
According to the Global Wind Energy Council, last year America’s installed capacity of wind generator capacity totaled 25 gigawatts, edging out Germany, the previous leader.
The U.S. added 8.4 gigawatts of capacity in 2008 alone, more than any other country. Global capacity grew at 29% last year to a total of 120 gigawatts. Even with all this torrid growth, wind power provides a paltry 1% to the global energy supply, leaving lots of room for growth.
Most folks think the world’s desire to “Go Green” is the reason wind Power is gaining so much popularity and wind farms are popping up all over the place, like daffodils in the spring.
But they would be wrong. The real reason is simple: it’s the old concept of supply and demand. And without a huge ramp up in supply of alternative, clean (green) sources of energy like wind and solar provide, the world will be facing a huge energy gap in as little as fifteen years.
It’s all good news to wind turbine manufacturers, like General Electric (NYSE: GE) and Vestas Wind Systems (CPH: VWS), the world’s largest manufacturers of wind generators.
It stands to benefit companies like Americas Wind Energy Corporation (Nasdaq: AWNE), a large manufacturer and distributor of wind turbines to wind farm developers in North America.
The biggest roadblock to another banner year for wind this year is the clogged credit markets. Wind farms require lots of capital to construct, but without a properly functioning credit market, these big machines will stall, regardless of how hard the alternative energy winds are blowing.
Good investing,
Dave Fessler
The World’s Largest “Air” Force…
Mention “Air Force One” to someone here in the U.S. and visions of a Boeing 747-400 with the Presidential Seal on the side quickly come to mind.
But now there’s another new meaning associated with the phrase, and it’s good news for the guy that gets to ride in the jet.
In 2008 America became the global force in wind-generated electricity. President Obama can take heart in the fact that his pledge to cut imports of foreign oil is already underway, at least in the wind power arena.
According to the Global Wind Energy Council, last year America’s installed capacity of wind generator capacity totaled 25 gigawatts, edging out Germany, the previous leader.
The U.S. added 8.4 gigawatts of capacity in 2008 alone, more than any other country. Global capacity grew at 29% last year to a total of 120 gigawatts. Even with all this torrid growth, wind power provides a paltry 1% to the global energy supply, leaving lots of room for growth.
Most folks think the world’s desire to “Go Green” is the reason wind Power is gaining so much popularity and wind farms are popping up all over the place, like daffodils in the spring.
But they would be wrong. The real reason is simple: it’s the old concept of supply and demand. And without a huge ramp up in supply of alternative, clean (green) sources of energy like wind and solar provide, the world will be facing a huge energy gap in as little as fifteen years.
It’s all good news to wind turbine manufacturers, like General Electric (NYSE: GE) and Vestas Wind Systems (CPH: VWS), the world’s largest manufacturers of wind generators.
It stands to benefit companies like Americas Wind Energy Corporation (Nasdaq: AWNE), a large manufacturer and distributor of wind turbines to wind farm developers in North America.
The biggest roadblock to another banner year for wind this year is the clogged credit markets. Wind farms require lots of capital to construct, but without a properly functioning credit market, these big machines will stall, regardless of how hard the alternative energy winds are blowing.
Good investing,
Dave Fessler
Alternative Energy: Why You Can’t Ignore “Green” Investing
by David Fessler, Advisory Panelist
Louis Basenese is one of the smartest investment analysts I know, and a good friend of mine to boot. And most of the time I agree with his research - and his conclusions.
Just not this time.
You see, this past Tuesday, his Investment U article caught my attention. In case you missed it, it was written about green energy. In it, Louis makes an argument for a “green energy super-bubble” that could burst in as little as two or three years, leaving unwary alternative energy investors in the lurch.
In his article, he cites four conditions that exist that make alternative energy ripe for a bubble. Those conditions may indeed be forming, but in and of themselves won’t cause a “speculative bubble.” In this case, there’s definitely more to the story.
The Defense of Alternative Energy & Green Investing
Louis: “The legislation is in place, and more is on the way.”
You’ll get no argument from me that Bush’s foray into increased ethanol production was misguided at best. But unlike ethanol, solar, wind and geothermal tax credits have been the catalysts that have energized those respective industries.
Improvements in technology have resulted in generation costs on par with - and in some cases, below - conventional fossil fuel sources. And with regard to solar in particular, costs per watt are on track to drop another 50% in the next few years. And in spite of the lower costs, industry margins will be in the 35% to 50% range, three times what they are today. That’s a recipe for increased earnings if I ever saw one.
Louis: “Money is already pouring into the sector.”
The $200 billion that Louis said flowed into the sector in the last two years is about right for a capital-intensive business like alternative energy. If it weren’t flowing into alternative energy development and deployment, where else in the energy sector would it go?
To pay for higher oil, for one, but perhaps it’s easier to describe where it won’t be going:
No one wants a fossil fuel plant in their backyard (few are even planned, let alone being built), and you can forget about any new nuclear power plants here in the United States.
Only a few are even in the permit stage (a 10-year process in and of itself), construction can take 10 to 15 years, and cost $15 to $20 billion. In June 2008, Moody’s estimated that the cost of power produced by a nuclear plant might possibly exceed $7 per watt, 10 times that of solar’s $0.70 per watt. And then there’s the spent fuel issue, decommissioning, etc.
Plenty of Room to Up Spending on Alternative Energy
Given that the United States alone spends over $500 billion every year on foreign oil, there’s plenty of room to up the spending on alternative energies like wind power.
Besides, we don’t really have a choice; cheap energy’s the key ingredient for economic growth. The problem with coal, oil and natural gas is that they are all finite resources, and we’ve already used all the best deposits (those with the highest energy content). Combine that with oil prices that will likely be closer to $100 a barrel by the end of the year, reigniting interest in alternatives.
Louis: “Tough credit conditions actually encourage more speculation.”
I’d argue that it’s really investment we’re talking about, not speculation. Because of the tax credits mentioned earlier, many start-ups already exist - particularly in the solar sector - where no less than 143 companies are currently playing in the thin-film segment of the industry.
There’s no question that they won’t all survive. But those that do will have viable, long-term business supplying the world with much-needed alternatives to fossil fuels.
Louis: “Green is the new black.”
Here I whole-heartedly agree, but for a different reason…
A Paradigm Shift Is Underway In Alternative Energy
There’s a paradigm shift underway in the alternative energy sector. Fossil fuels are on their way out and green is on the way in. It’s going to be a 20- to -30-year process, and that’s why it’s destined to be such a great opportunity for investors.
It’s not just a “U.S. social responsibility” thing, either. In fact, it’s just the opposite. Our alternative energy roadmap is far behind those of many other nations. Take Portugal, for instance, where over 60% of their energy comes from renewable sources. Their goal? 100%. China and Germany also have aggressive alternative energy generation plans underway.
And because of all the government tax incentives dangled in front of the myriad companies, cost-effective solar panels and wind generators are already in use, generating power that produces no greenhouse gas, and more importantly, don’t use a drop of oil when running.
Here’s the bottom-line: The global need for cheap energy is so monumental, alternative energy is destined to remain a target-rich environment for many years to come. Will some companies be better investments than others? Of course… just like they are in any other sector.
But a bursting bubble in two to three years? I don’t believe it. Actually, a mini one burst last year when oil dropped from $147 a barrel to where it is today, driving many solar, wind and geothermal stocks down as much as 80%. The valuations that these companies are sporting now are, in many cases, as low as they’ve ever been.
And that has helped to set up what could be one of the best sectors to invest in moving forward… for decades to come.
One thing you can be sure of: Both Louis and I will be watching it all unfold with an eye (or two, in this case) towards providing you with some great ideas for investing… and maybe for a few bragging rights.
Good investing,
David Fessler
Editor’s Note: As our resident energy and infrastructure expert, David Fessler finds opportunities in these sectors for our members. To get some of his latest energy picks, go here.
Today’s Investment U Crib Sheet
Regardless of which side of the argument you favor, there was one line in Louis’ article that we can all agree on.
“Just be smart and buy proven (not probable) green energy companies. You don’t want to own companies that are stuck in the lab with loads of potential. Instead, pick the ones with bona fide products and loads of sales. And religiously use trailing stops. It’s the only way to make sure you don’t bail too early… or worse, too late.”
Louis’ comments remind us that while it’s important to get excited about the new technologies and the potential that they offer, we must balance this hope with pragmatism. Not all new technologies are profitable, and not all new uses of technology make for good investments.
Part of our core values is to follow the money, specifically earnings. Speculators may look at potential, while investors look at performance.
Even though we’ve warned readers about the “green” sector, we certainly didn’t recommend that you should avoid the sector altogether, because that would be shortsighted.
Stay tuned for more on the emerging opportunities in the energy sector.
Louis Basenese is one of the smartest investment analysts I know, and a good friend of mine to boot. And most of the time I agree with his research - and his conclusions.
Just not this time.
You see, this past Tuesday, his Investment U article caught my attention. In case you missed it, it was written about green energy. In it, Louis makes an argument for a “green energy super-bubble” that could burst in as little as two or three years, leaving unwary alternative energy investors in the lurch.
In his article, he cites four conditions that exist that make alternative energy ripe for a bubble. Those conditions may indeed be forming, but in and of themselves won’t cause a “speculative bubble.” In this case, there’s definitely more to the story.
The Defense of Alternative Energy & Green Investing
Louis: “The legislation is in place, and more is on the way.”
You’ll get no argument from me that Bush’s foray into increased ethanol production was misguided at best. But unlike ethanol, solar, wind and geothermal tax credits have been the catalysts that have energized those respective industries.
Improvements in technology have resulted in generation costs on par with - and in some cases, below - conventional fossil fuel sources. And with regard to solar in particular, costs per watt are on track to drop another 50% in the next few years. And in spite of the lower costs, industry margins will be in the 35% to 50% range, three times what they are today. That’s a recipe for increased earnings if I ever saw one.
Louis: “Money is already pouring into the sector.”
The $200 billion that Louis said flowed into the sector in the last two years is about right for a capital-intensive business like alternative energy. If it weren’t flowing into alternative energy development and deployment, where else in the energy sector would it go?
To pay for higher oil, for one, but perhaps it’s easier to describe where it won’t be going:
No one wants a fossil fuel plant in their backyard (few are even planned, let alone being built), and you can forget about any new nuclear power plants here in the United States.
Only a few are even in the permit stage (a 10-year process in and of itself), construction can take 10 to 15 years, and cost $15 to $20 billion. In June 2008, Moody’s estimated that the cost of power produced by a nuclear plant might possibly exceed $7 per watt, 10 times that of solar’s $0.70 per watt. And then there’s the spent fuel issue, decommissioning, etc.
Plenty of Room to Up Spending on Alternative Energy
Given that the United States alone spends over $500 billion every year on foreign oil, there’s plenty of room to up the spending on alternative energies like wind power.
Besides, we don’t really have a choice; cheap energy’s the key ingredient for economic growth. The problem with coal, oil and natural gas is that they are all finite resources, and we’ve already used all the best deposits (those with the highest energy content). Combine that with oil prices that will likely be closer to $100 a barrel by the end of the year, reigniting interest in alternatives.
Louis: “Tough credit conditions actually encourage more speculation.”
I’d argue that it’s really investment we’re talking about, not speculation. Because of the tax credits mentioned earlier, many start-ups already exist - particularly in the solar sector - where no less than 143 companies are currently playing in the thin-film segment of the industry.
There’s no question that they won’t all survive. But those that do will have viable, long-term business supplying the world with much-needed alternatives to fossil fuels.
Louis: “Green is the new black.”
Here I whole-heartedly agree, but for a different reason…
A Paradigm Shift Is Underway In Alternative Energy
There’s a paradigm shift underway in the alternative energy sector. Fossil fuels are on their way out and green is on the way in. It’s going to be a 20- to -30-year process, and that’s why it’s destined to be such a great opportunity for investors.
It’s not just a “U.S. social responsibility” thing, either. In fact, it’s just the opposite. Our alternative energy roadmap is far behind those of many other nations. Take Portugal, for instance, where over 60% of their energy comes from renewable sources. Their goal? 100%. China and Germany also have aggressive alternative energy generation plans underway.
And because of all the government tax incentives dangled in front of the myriad companies, cost-effective solar panels and wind generators are already in use, generating power that produces no greenhouse gas, and more importantly, don’t use a drop of oil when running.
Here’s the bottom-line: The global need for cheap energy is so monumental, alternative energy is destined to remain a target-rich environment for many years to come. Will some companies be better investments than others? Of course… just like they are in any other sector.
But a bursting bubble in two to three years? I don’t believe it. Actually, a mini one burst last year when oil dropped from $147 a barrel to where it is today, driving many solar, wind and geothermal stocks down as much as 80%. The valuations that these companies are sporting now are, in many cases, as low as they’ve ever been.
And that has helped to set up what could be one of the best sectors to invest in moving forward… for decades to come.
One thing you can be sure of: Both Louis and I will be watching it all unfold with an eye (or two, in this case) towards providing you with some great ideas for investing… and maybe for a few bragging rights.
Good investing,
David Fessler
Editor’s Note: As our resident energy and infrastructure expert, David Fessler finds opportunities in these sectors for our members. To get some of his latest energy picks, go here.
Today’s Investment U Crib Sheet
Regardless of which side of the argument you favor, there was one line in Louis’ article that we can all agree on.
“Just be smart and buy proven (not probable) green energy companies. You don’t want to own companies that are stuck in the lab with loads of potential. Instead, pick the ones with bona fide products and loads of sales. And religiously use trailing stops. It’s the only way to make sure you don’t bail too early… or worse, too late.”
Louis’ comments remind us that while it’s important to get excited about the new technologies and the potential that they offer, we must balance this hope with pragmatism. Not all new technologies are profitable, and not all new uses of technology make for good investments.
Part of our core values is to follow the money, specifically earnings. Speculators may look at potential, while investors look at performance.
Even though we’ve warned readers about the “green” sector, we certainly didn’t recommend that you should avoid the sector altogether, because that would be shortsighted.
Stay tuned for more on the emerging opportunities in the energy sector.
Green Energy: The Largest Speculative Bubble We’ve Ever Seen
by Louis Basenese, Senior Analyst, The Oxford Club
A few months ago I warned you about the bubble in U.S. Treasuries. And sure enough, it’s popping.
Treasuries have already plummeted 20% from their December peak. By my estimates, they’ve still got another 20% to go.
But regardless of how far price falls, it’ll be a pittance compared to the losses from the next bubble - one that could be $21-trillion large when the air comes rushing out…
In what, you ask?
Green energy… but first let me provide you with a brief historical and psychological perspective. Otherwise, I’m afraid you’ll be too quick to dismiss my prediction. And that could lead to disastrous results.
Speculative Bubbles Dot The Free-Market Landscape
Instances of speculative bubbles dot the free-market landscape…
The 17th century brought us the Tulip Mania bubble, which like every bubble, was fueled by the social contagion of boom thinking. Tulips were the most-coveted flowers on the planet, different from every other flower known to horticulturists. As such, the incredible demand sent prices through the roof. The madness reached its peak during the winter of 1636-37, when tulip bulbs were changing hands ten times in a day. Soon after, however, the market crashed in spectacular fashion.
In 1720, it was the South Sea Bubble, where massive over-speculation in Britain’s South Sea Company - which was granted a monopoly to trade in Spain’s South American colonies as part of a treaty during the War of Spanish Succession - caused financial ruin for many. (Incidentally, the bursting of this bubble led to a Bubble Act - talk about a useless and ineffective piece of legislation.)
Fast-forward a couple hundred years and we endured the Japanese asset price bubble of 1990 and, of course, the infamous dot-com bubble of 2000.
Lately, we’ve stepped it up even more. Three bubbles - the housing bubble, the commodity bubble and the U.S. Treasury bubble - have been crammed into a ridiculously short time span of less than eight years.
The Green Energy Super-Bubble
And unless our pattern of behavior suddenly changes, the ominous green energy super-bubble that’s forming will burst before the prior three have ample time to deflate.
We’ve ordained a bubble economy because favorable speculative conditions constantly exist. The ever-shrinking gap between bubbles serves as all the proof we need.
Cash is the fuel.
Legislation is the accelerant, providing extra incentives via tax credits or subsidies.
And popular culture is the explosive kicker.
Together, they comprise the primary ingredients for a first-rate asset bubble.
And right now, there’s only one industry that rests squarely at the intersection of public policy, investing and popular culture - alternative energy.
That’s right. I believe “going green” will lead to lots of red for unprepared investors. As much as $21 trillion, based on former venture capitalist, Eric Janszen’s estimates. And here’s why…
1. The legislation is in place. And more is on the way. Under the Bush administration we got the ridiculous ethanol mandates. And solar and wind credits were routinely extended. Now, President Obama is making the environment and green-collar jobs the cornerstones of his economic recovery plan.
2. Money is already pouring into the sector. More than $200 billion was invested in clean energy and clean technology markets in the last two years. And yet, record amounts of cash are still waiting to be deployed. According to Bloomberg, speculators are sitting on $8.85 trillion in cash, desperate for an outlet.
3. Tough credit conditions actually encourage more speculation. Wayne Woo, director of Good Energies, reports that green start-ups will now give up to 75% ownership (up from 50%) to get their projects off the ground. Getting a bigger piece of the potential profit pie, for the same perceived level of risk, is bound to encourage more speculation.
4. Green is the new black. Forget fashionable. Going green resembles a religious movement nowadays. This alone has people ignoring economics in the name of social responsibility.
Unmistakably, the ingredients are all there.
What Will Burst This Green Energy Bubble?
The only question left is, “What will burst this green energy bubble?” Plenty of scenarios exist…
Government spending could fail to create sustainable jobs, which would, in effect, cause green investment to grind to a halt. Or, the lack of focus toward one be-all, end-all alternative-energy solution, whether it be wind, solar, biofuel, or something else, could frustrate investors and force them to bail.
Likewise, too many so-called green innovations still reside in the laboratory. Many will never make it to market, which is another surefire way to hand investors 100% losses and sap enthusiasm and future investment.
In the end, the economics just don’t add up. Without tax breaks and government subsidies, not a single alternative energy will be able to compete. So no matter how popular or fashionable alternative energy becomes, if it remains economically stupid, it’s destined to fail.
No doubt, the run-up and profits will be historic. Just be forewarned that the green euphoria will ultimately be replaced with despair and massive losses.
It’s hard to gauge exactly when it will occur, however. I estimate we’ve got another two to three years before we hit the peak. That’s why, given the capital still rushing in, I don’t recommend avoiding the sector altogether
Just be smart and buy proven (not probable) green energy companies. You don’t want to own companies that are stuck in the lab with loads of potential. Instead, pick the ones with bona fide products and loads of sales. And religiously use trailing stops. It’s the only way to make sure you don’t bail too early… or worse, too late.
Good investing,
Lou Basenese
A few months ago I warned you about the bubble in U.S. Treasuries. And sure enough, it’s popping.
Treasuries have already plummeted 20% from their December peak. By my estimates, they’ve still got another 20% to go.
But regardless of how far price falls, it’ll be a pittance compared to the losses from the next bubble - one that could be $21-trillion large when the air comes rushing out…
In what, you ask?
Green energy… but first let me provide you with a brief historical and psychological perspective. Otherwise, I’m afraid you’ll be too quick to dismiss my prediction. And that could lead to disastrous results.
Speculative Bubbles Dot The Free-Market Landscape
Instances of speculative bubbles dot the free-market landscape…
The 17th century brought us the Tulip Mania bubble, which like every bubble, was fueled by the social contagion of boom thinking. Tulips were the most-coveted flowers on the planet, different from every other flower known to horticulturists. As such, the incredible demand sent prices through the roof. The madness reached its peak during the winter of 1636-37, when tulip bulbs were changing hands ten times in a day. Soon after, however, the market crashed in spectacular fashion.
In 1720, it was the South Sea Bubble, where massive over-speculation in Britain’s South Sea Company - which was granted a monopoly to trade in Spain’s South American colonies as part of a treaty during the War of Spanish Succession - caused financial ruin for many. (Incidentally, the bursting of this bubble led to a Bubble Act - talk about a useless and ineffective piece of legislation.)
Fast-forward a couple hundred years and we endured the Japanese asset price bubble of 1990 and, of course, the infamous dot-com bubble of 2000.
Lately, we’ve stepped it up even more. Three bubbles - the housing bubble, the commodity bubble and the U.S. Treasury bubble - have been crammed into a ridiculously short time span of less than eight years.
The Green Energy Super-Bubble
And unless our pattern of behavior suddenly changes, the ominous green energy super-bubble that’s forming will burst before the prior three have ample time to deflate.
We’ve ordained a bubble economy because favorable speculative conditions constantly exist. The ever-shrinking gap between bubbles serves as all the proof we need.
Cash is the fuel.
Legislation is the accelerant, providing extra incentives via tax credits or subsidies.
And popular culture is the explosive kicker.
Together, they comprise the primary ingredients for a first-rate asset bubble.
And right now, there’s only one industry that rests squarely at the intersection of public policy, investing and popular culture - alternative energy.
That’s right. I believe “going green” will lead to lots of red for unprepared investors. As much as $21 trillion, based on former venture capitalist, Eric Janszen’s estimates. And here’s why…
1. The legislation is in place. And more is on the way. Under the Bush administration we got the ridiculous ethanol mandates. And solar and wind credits were routinely extended. Now, President Obama is making the environment and green-collar jobs the cornerstones of his economic recovery plan.
2. Money is already pouring into the sector. More than $200 billion was invested in clean energy and clean technology markets in the last two years. And yet, record amounts of cash are still waiting to be deployed. According to Bloomberg, speculators are sitting on $8.85 trillion in cash, desperate for an outlet.
3. Tough credit conditions actually encourage more speculation. Wayne Woo, director of Good Energies, reports that green start-ups will now give up to 75% ownership (up from 50%) to get their projects off the ground. Getting a bigger piece of the potential profit pie, for the same perceived level of risk, is bound to encourage more speculation.
4. Green is the new black. Forget fashionable. Going green resembles a religious movement nowadays. This alone has people ignoring economics in the name of social responsibility.
Unmistakably, the ingredients are all there.
What Will Burst This Green Energy Bubble?
The only question left is, “What will burst this green energy bubble?” Plenty of scenarios exist…
Government spending could fail to create sustainable jobs, which would, in effect, cause green investment to grind to a halt. Or, the lack of focus toward one be-all, end-all alternative-energy solution, whether it be wind, solar, biofuel, or something else, could frustrate investors and force them to bail.
Likewise, too many so-called green innovations still reside in the laboratory. Many will never make it to market, which is another surefire way to hand investors 100% losses and sap enthusiasm and future investment.
In the end, the economics just don’t add up. Without tax breaks and government subsidies, not a single alternative energy will be able to compete. So no matter how popular or fashionable alternative energy becomes, if it remains economically stupid, it’s destined to fail.
No doubt, the run-up and profits will be historic. Just be forewarned that the green euphoria will ultimately be replaced with despair and massive losses.
It’s hard to gauge exactly when it will occur, however. I estimate we’ve got another two to three years before we hit the peak. That’s why, given the capital still rushing in, I don’t recommend avoiding the sector altogether
Just be smart and buy proven (not probable) green energy companies. You don’t want to own companies that are stuck in the lab with loads of potential. Instead, pick the ones with bona fide products and loads of sales. And religiously use trailing stops. It’s the only way to make sure you don’t bail too early… or worse, too late.
Good investing,
Lou Basenese
Abu Dhabi starts constructing 'green city'
An artist's concept of the city. Notice the wind turbines and monorail-like tracks and 'pods'.
February 11, 2008
The United Arab Emirates (UAE) has started construction of its so called 'green city' which will be named Masdar City. It is a city which is designed to have no carbon emissions, cars, or waste. It will cost $22 billion (£11 billion) and take eight years to make. It will be able to hold a population of 50,000 people and 1,500 businesses. The city will cover 1,483 acres (6.00 km²).
The city was designed by Foster and Partners, a British company.
“No one has ever built a zero-carbon city before. Nor one producing zero waste or fully powered by renewable energy. Masdar City will accomplish all three,” said Sultan Al Jaber.
The city will have a personal electrical power supply mainly from two renewable energy sources: wind turbines and solar panels. Water will be provided through a solar-powered desalination plant and air conditioning will be provided naturally from wind towers.
It is planned to save more than $2 billion in oil over the next 25 years along with creating more than 70 000 jobs.
We are creating a city where residents and commuters will live the highest quality of life with the lowest environmental footprint.
—Al Jaber
The immense project will be supported by a company created for it called 'Masdar Initiative', which will develop and commercialise clean energy technologies. It will also be supported by the WWF, a global conservation charity, and it is hoped that international joint ventures will bring in more money.
Some people fear that Masdar will become a domain for the luxury development of the rich, because the city is located by Abu Dhabi and Abu Dhabi International Airport.
Dr Al Jaber said, “We are often asked why we are setting our goal so high. Our answer is because someone must... Someone must push the envelope to create the solution that we, as a global community, so urgently require.”
3/10/2009
Art : Skyscapes - Jean Odermatt
The European sky has long inspired artists, environmentalists and travellers alike. This book transports the viewer to a land of natural wonder: soft and sharp shapes of clouds in a changing sky, fog pressing a mountain peak. For more than ten years, Swiss-born Odermatt has photographed these landscapes, often creating his scenes over the course of weeks by means of an automatic camera installed in sites chosen to show the immediate beauty and violence of the weather.
3/09/2009
Before the Deluge
A warmer world is coming. The Dutch want to make sure they are ready for it.
Article
By LEILA ABBOUD - Wall Street Journal
The Dutch are embarking on a decades-long plan to improve their flood-control system because they're afraid that rising sea levels from global warming will threaten their low-lying country.
The Journal Report
See the complete ECO:nomics report.The effort, which the government says could cost €1 billion ($1.27 billion) a year through 2100, would include massive, decades-long public works, such as raising dikes and reinforcing storm barriers. One proposal calls for improving the defenses of Rotterdam, Europe's largest container port, which could be submerged as sea levels rise. Another would dump millions of tons of sand off the North Sea coast over the course of a century to extend the shoreline out as much as a kilometer (0.62 mile), further shielding populated areas from floods.
In addition to massive infrastructure projects, the Netherlands is also bringing new technology to bear in its centuries-old battle against floods. For example, Dutch engineers and International Business Machines Corp. are testing a system of sensors that could eventually replace the army of volunteers that now fans out during storms to visually inspect the stability of the nation's dikes. IBM is also helping to build a software system that collects and analyzes weather, rainfall and water-level data, and uses the results to advise local governments and emergency responders about flood threats and evacuation plans.
Delta Works Foundation (www.deltaworks.org)
KEEPING THE SEA AT BAY Existing Dutch flood defenses include the Maeslant barrier
"We have the best system of flood protection in the world today, but we have to start preparing for the future," says Cees Veerman, a former agriculture minister who headed a recent government commission that recommended the overhaul of the nation's flood defenses. "Climate change and rising sea levels will affect our coastal defenses and our rivers," Mr. Veerman says. "We must take action now to ensure that our citizens are safe in the centuries to come."
The Dutch campaign is still in its early stages, and lawmakers still have to make important decisions such as how to ensure its long-term financing. But the initiative is likely to have an impact far beyond the shores of this Northern European country of 16 million residents. The Dutch are leaders in water management, and its engineers, dredging companies and consultants work in flood-prone areas around the world. Dutch engineers traveled to New Orleans after Hurricane Katrina to study why the levees broke, and have advised governments as far afield as Vietnam and Bangladesh.
Billions at Risk
Such expertise is likely to be in high demand as countries are forced to adapt to major changes brought by global warming. Climate scientists and policy makers are increasingly realizing that even if industrialized countries make deep greenhouse-gas emissions cuts in coming decades -- something that is far from assured -- the carbon dioxide already accumulated in the atmosphere means that temperatures are still going to increase enough to cause major problems in some parts of the world. Coastal areas like the Netherlands, heavily populated river deltas such as on the Ganges in India, and small island nations are especially vulnerable to rising sea levels. Some five billion people live in vulnerable river deltas and coastal areas, according to a United Nations study. Therefore, some economists and environmentalists are now advocating that countries focus more of their efforts on adapting to the consequences of climate change.
"It's already too late to avert some serious consequences," says Manish Bapna of the World Resources Institute, a think tank in Washington, D.C. "We must learn to adapt to a warmer world."
This is a different strategy from that of the Kyoto Protocol, the international treaty to fight global warming. Signed by 183 countries, the treaty focuses on reducing carbon-dioxide emissions from factories and power plants as a way to slow rising temperatures. In the policy jargon, that approach is referred to as "mitigation," while the approach of preparing for the effects of climate change is called "adaptation."
The Dutch effort to modernize their flood-control system is an adaptation project on a grand scale.
Delta Works Foundation (www.deltaworks.org)
Massive gates pivot closed to protect Rotterdam and environs
Flood of 1953
It began in 2007, when the government commissioned a nine-member independent committee to give it advice on how to protect the Netherlands from flooding for the next century. This was the second time Holland had undertaken such a study: In 1953, after terrible floods in the country's southwest killed some 1,800 people and destroyed thousands of homes and farms, the Delta Commission was formed to make sure such a thing never happened again. The result of the commission's work was the Delta Works, a network of dams and enclosures that were built over a 30-year period to protect the south of the country.
The modern-day Delta Commission II asked 20 climate scientists to study the impact of rising temperatures on the Netherlands. All came back with the same troubling conclusion: Rising sea levels were unavoidable over the next century and beyond. "Every new analysis we got was worse than the one before," recalls Mr. Veerman, who headed the commission.
The situation is aggravated by the peculiar geography of the Netherlands, one-quarter of which lies below sea level. The country has a 220-mile-long coastline and is also a delta where the Rhine and Meuse rivers flow into the North Sea. Increasing temperatures from global warming would not only cause sea levels to rise, but also cause river levels to rise because of more runoff from melting glaciers and greater precipitation in the Alps. Since the excess water in the rivers can't flow into the sea when the sea level rises, the risks of flooding are "drastically increased" in large areas of the Netherlands, according to the commission's findings.
Delta Works Foundation (www.deltaworks.org)
The Hollandse Ijssel barrier
Some 60% of the population lives in the most vulnerable areas. And 65% of economic output is produced in the lowest part of the Netherlands, which is home to the largest city, Amsterdam, and the seat of government, The Hague.
Raising the Mark
The commission came to the conclusion that the country had to prepare for a sea-level rise of as much as 1.3 meters (more than 4 feet) by 2100 and from 2 to 4 meters by 2200. Previously, Dutch policy makers had been preparing for a sea level rise of around 80 centimeters by 2100.
Mr. Veerman and his team identified key areas that would be stressed by the forecast changes. Rotterdam, with its huge port, large population, and crucial role in the country's economy, posed particularly vexing problems. Not only would the inner old town be vulnerable to flooding, but the smooth functioning of the port would be impeded by rising water levels. Dealing with the changes "could hurt the port and impose big new fixed costs," says Mr. Veerman. "It will be very difficult, from a technical point of view, to figure out how to protect Rotterdam."
Some of the country's dams and storm barriers wouldn't be able to handle the higher levels of water, the commission found. The Enclosure Dike, which dams off the Zuider Zee, an inlet off the North Sea that has been turned into a massive freshwater lake that provides drinking water to Amsterdam and its environs, would need to be raised by 1.5 meters.
In its 60-page report to the government, the commission recommended 12 specific infrastructure projects. It also called for the passage of a law to create a Delta Fund of €1 billion a year to pay for the projects, to insulate the program from short-term budget and political constraints.
Delta Works Foundation (www.deltaworks.org)
These towers hold two doors nearly as long as a football field that can be raised and lowered
Delta Force
The reception to the report was mostly favorable. Prime Minister Jan Peter Balkenende called it "thorough and inspiring" and said his government would present a proposed law this year. But one nightly newscast accused the commission of scaremongering to force the Dutch to accept an expensive public-works project.
Tracy Metz, a journalist who writes about architecture, landscape and design and was a member of the Delta Commission II, says it was to be expected that the commission would be accused of being "alarmist." "Our attitude was that we wanted to have an idea of what could happen and prepare for the worst-case scenario," she says.
The next step will be for the government to pass a law to fund the project and begin work on the large projects called for in the report. It will take decades, but Ms. Metz and her colleagues on the commission are sure it's the right thing to do to deal with the threat that global warming poses to their country.
"Everybody thinks the Dutch have all the answers on flood control, but of course we don't," says Ms. Metz. "Everyone is going to have to learn as we go along."
—Ms. Abboud is a Wall Street Journal staff reporter in Paris.
Write to Leila Abboud at leila.abboud@wsj.com
The Public Green
As the Obama administration pushes environmentally friendly building, it has the perfect place to start: the government's own properties
Article
Comments
more in World »By SARI KRIEGER
The U.S. government's huge inventory of properties is likely to be at the forefront of a national green-building push that will serve two aims of the Obama administration: promoting energy efficiency and boosting infrastructure spending as a way to revive the economy.
The Journal Report
See the complete ECO:nomics report.In a speech Jan. 8 at George Mason University in Fairfax, Va., then President-elect Barack Obama said he wanted to modernize 75% of existing federal buildings. Much of this modernization is likely to be energy-efficiency measures, and the stimulus package signed into law last month includes billions of dollars for such efforts. The government owns or leases more than 500,000 properties, according to the Department of Energy -- a number that could mean a big impact.
Green-building proponents are hoping that the government's effort will help spur more action in the private sector -- and that wider implementation of green practices will help drive down costs. While green building became increasingly popular in the private sector in recent years, the recession has made the upfront capital costs of both new green construction and renovations less attractive these days for some companies.
Green building refers practices such as the use of environmentally friendly materials in new construction and improvements in the energy efficiency of existing buildings through measures such as installing windows that retain or deflect heat as well as more-efficient heating and cooling systems and lighting.
The Obama administration's plans are being helped, in part, by the Energy Independence and Security Act of 2007, which requires the secretary of energy to revise efficiency standards for all new federal buildings as well as those undergoing major renovations to require the elimination of fossil-fuel energy use by 2030.
"It's not only at a time when the administration is strongly behind doing something, but also the regulations to do something are there," says Bob Dixon, head of the efficiency and sustainability business for Siemens Building Technologies, part of Germany's Siemens AG. "And certainly through some of the stimulus package, we should have some of the funds to support the implementation."
Min Jae HongThe U.S. Green Building Council, a nonprofit that promotes and certifies green building practices, estimates that green building measures could save the U.S. government billions of dollars in energy costs. "The federal government spends about $4 billion on energy each year for its affordable-housing stock alone," says Jason Hartke, director of advocacy and public policy for the council. "If [the government] were to make...federal affordable-housing stock more energy efficient by 25%, [it would] save $1 billion annually. In 10 years, the government would save $10 billion."
Quick Start
Efforts were under way even before President Obama arrived in Washington in January. At the end of last year, for instance, the Department of Energy gave 16 companies contracts of $5 billion each, a total of $80 billion, for measures such as improving the efficiency of heating and cooling systems and installing energy-efficient lighting for various government buildings across the country. The Army Corps of Engineers awarded $900 million in contracts to 16 companies for similar upgrades.
In January, as part of a major renovation project at the Pentagon, the Department of Defense purchased from Cree Inc. of Durham, N.C., more than 4,200 energy-efficient light-emitting-diode products -- which are 85% more energy-efficient than incandescent lights, as much as 50% more efficient than fluorescent lights and last many times longer than either of those. The cost: about $1.6 million.
Last year, Honeywell International Inc. was awarded a $27 million contract for an energy-efficiency renovation project at Luke Air Force Base in Phoenix -- including a new energy-management system, solar roof, and a chiller-replacement program to eliminate chlorofluorocarbon-based cooling applications, such as air conditioners. Paul Orzeske, president of Honeywell's building-solutions division, says the project should save the federal government $2.7 million a year in energy costs.
Mr. Orzeske says the Morris Township, N.J., company has seen a recent rise in its federal-government projects. "To the extent that capital is immediately available, especially for the longer-payback items, the government sector is by far the space that has the most investment right now," he says.
There already are more than 1,200 federal-government projects in the Green Building Council's Leadership in Energy and Environmental Design green-building program, which offers a point-based rating system for certifying buildings as being various levels of environmentally friendly. The number of federal buildings in the LEED program grew modestly in the early years of the program, which began in 2000. But the number jumped 73% in 2007 and nearly doubled in 2008.
"I think the federal government is committed to LEED, and I think you will see an increasing number of agencies and arms of the government mandating compliance [by contractors working on federal buildings] in some capacity," says Stephen Del Percio, a construction lawyer in New York for Arent Fox LLC, which is based in Washington, D.C.
The federal government also is following the Green Building Initiative's Green Globes rating system, a stamp of approval geared more toward existing buildings. The Green Building Initiative is a nonprofit that tries to accelerate the adoption of green building practices.
Pushing It Forward
Many experts say the federal government's green building activities could help spur greater adoption of green building techniques by cash-strapped private-sector companies.
Real-estate services company Jones Lang LaSalle and commercial real-estate trade group CoreNet Global released a study in November that found companies were less likely to spend more money in 2008 on green building upgrades compared with 2007.
The study, which surveyed 384 people who make real-estate decisions for a range of large companies, found that 69% of them think sustainable building construction and maintenance practices are a critical issue in corporate real-estate decision making. However, only 53% said they would pay a premium to retrofit property they own to gain sustainability benefits. That was down from 77% in 2007.
The federal government's green activities "will help proliferate the best practices and potentially push down prices on certain features," says Mr. Hartke of the Green Building Council. "I think it will help generate new jobs in this space and therefore strengthen the green-building marketplace in itself. There is a lot of multiplier effect."
—Ms. Krieger is a staff reporter for Dow Jones Clean Technology Insight, based in Jersey City, N.J. She can be reached at sari.krieger@dowjones.com.
Ticket to Nowhere?
Lemos Stein for Wall Street Journal
Airlines can cut back greenhouse-gas emissions by using blends of biofuels. If, that is, the ingredients are available.
The aviation industry is scrambling to find ways of reducing its carbon emissions, including testing biofuels in commercial airliners.
Tests so far show biofuels work as well in the air as on the ground. (In other words, they work.) But a host of issues stand in the way of large-scale production of such fuels for aviation, posing economic, environmental and logistical questions that have no easy solutions.
For example, 85% of the cost of jet fuel made from natural oils is the feedstock, or raw materials, says Jennifer Holmgren, general manager for UOP LLC's Renewable Energy & Chemicals business, a Des Plaines, Ill., refining technology developer. But while a gallon of crude oil costs about 90 cents, suppliers of exotic oils say that the three main choices being considered for aviation fuel -- using oils from the jatropha and camelina plants, and from algae -- cost about $7 a gallon, $3 a gallon and more than $20 a gallon, respectively.
Fuels based purely on oils from these plants performed well in test flights by airlines and jet-engine makers in December and January, says Ms. Holmgren. UOP, a unit of Honeywell International Inc., refined the fuel for the New Zealand Air, Continental Airlines and Japan Airlines flights. When burned, the oils produce less soot and particulate matter than regular jet fuel, Ms. Holmgren says. Also, cultivating and refining the oilseeds produces 50% less greenhouse-gas emissions than regular jet-fuel production, she says.
The aviation industry is under pressure to study alternative fuels because, though responsible for only about 3% of global carbon-dioxide emissions, the industry faces a possible emissions cap by the European Union in coming years. The International Air Transport Association has set a goal for its 230 members to use a blend of 10% alternative fuels by 2017. Commercial airplanes will burn 67 billion gallons of jet fuel in 2009, down from about 70 billion in both 2008 and 2007, according to the association. By 2017, assuming demand for flights rises, considerably more than seven billion gallons of biofuel is likely to be needed to meet the industry's 10% target.
But the amount of land currently needed to grow even seven billion gallons of oilseed suggests that some areas now used to grow food would be converted for fuel crops, experts say. Moreover, any environmental benefits from reducing carbon-dioxide emissions would probably be partially offset by the additional use of irrigation and fertilizers.
Algae Bloom
Of the three, algae holds the most promise because of its energy yield and ability to grow in ponds and waste water in desert areas, eliminating the land-use dilemma. But the technology to produce enough algae to make billions of gallons of fuel is, at best, five to eight years away, industry experts say. In the meantime, some scientists and agricultural economists believe jatropha and camelina have growing traits and potential for yield improvement that can overcome concerns about land use.
Camelina is a small, oil-rich seed that grows in a flowering plant related to rapeseed and mustard. It grows well in dry areas with fewer applications of fertilizers and herbicides.
Camelina seed yields in Montana can reach an average of 1,000 pounds per acre on dry land, says Duane Griffith, extension farm management specialist at Montana State University, in Bozeman. As the plant has 40% oil content, one acre yields 400 pounds of oil, or 54 gallons, annually. But to grow enough camelina to produce seven billion gallons of biofuel would take 130 million acres. By contrast, there are 470 million acres of arable land in the U.S.
Jatropha, a shrub that grows on marginal land in the tropics, has drawn the attention of development economists because of its potential to lift communities in Africa and Southeast Asia from poverty if it becomes a major feedstock for biofuel. So far, it's grown on small farms, so yields vary from region to region.
New York-based Terasol Energy Inc., which provided the jatropha oil refined by UOP for the test flights, says farmers in India and Tanzania currently can harvest just over two metric tons of seed per acre without fertilizers or herbicides, yielding about 242 gallons of oil per acre. Sanjay Pringle, president of Terasol, which is developing alternative oilseed crops for biofuel and for specialty-chemical industries, says India has potentially identified 27 million acres and Brazil about 19 million acres that could be used to grow jatropha.
Lloyd MillerDevelopers of both camelina and jatropha say that genetic enhancement of the plants will increase yields, just as corn yields have improved significantly in recent decades. That will reduce the amount of land needed for planting.
No Protection
But even if a market for these crops emerges, farmers won't easily take a gamble on a new crop, scientists and academics say.
First of all, it's a "a big risk" because these crops aren't supported by U.S. Department of Agriculture loan guarantee or insurance programs, says Ron Pate, principal member of the Energy, Resources and Systems Analysis Center at Sandia National Laboratories in Albuquerque, N.M. "The problem is that we don't have that much experience with these crops on large-scale farming and agronomics," he says.
There is also the issue of possible collateral damage to the environment when logistics and transportation are considered. To move the crops from remote areas in countries with poor infrastructure will take a lot of fuel.
Even more daunting for biofuel crop developers is the U.S. Environmental Protection Agency's proposal to include indirect land use in its assessment of greenhouse-gas emissions for biofuel. Indirect land use refers to how the displacement of food crops for fuel crops in a region can induce changes in land use elsewhere. Since carbon dioxide is released into the atmosphere every time unused land is converted into a crop, the EPA argues that indirect land use alters the emissions balance of biofuels.
Powering Up
Comparing selected raw materials that can be made into aviation fuel
Cost/gallon Gallons/acre BTUs/gallon BTUs/acre (millions)
Algae $20.00 3,500 130,000 455
Camelina 3.00 54 185,000 10
Jatropha 7.00 200 140,000 28
Crude oil 0.90 -- 138,000 --
Note: Gallons/acre figures are for annual production. BTUs=British thermal units. Sources: Honeywell International Inc.; Lew Fulton, International Energy Agency; National Renewable Energy Laboratory, Department of Energy; Alice L. Pilgeram, David C. Sands et al., Montana State University
Given the challenges of achieving commercial scale for any single oilseed crop, investors and industry experts say the answer may be to develop a catalog of oils instead of picking a single winning crop.
"We very strongly believe that it's a portfolio of correct answers; there will be different plants, different processes, different regional solutions that, for a user, can be interchangeable," says Billy Grover, managing director for environmental strategy at Boeing Commercial Airplanes, which supplied the jets used in the test flights. Commercial Airplanes is a division of Chicago-based Boeing Co.
Meanwhile, although the economics still favor fossil fuels, that may not always be the case.
"If you look at the cost of extracting and producing petroleum, the trend is that it's going higher and higher, it's getting to more expensive sources, while the trend to get the renewable resources is getting cheaper; the trend is the reverse," says Mr. Pringle of Terasol.
—Ms. Lemos Stein is a special writer in Jersey City, N.J., for Clean Technology Insight, a newsletter published by Dow Jones & Co.
Write to Mara Lemos Stein at mara.lemos-stein@dowjones.com
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