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    Scottish and Southern Energy plc, the UK's second largest power company, has completed the acquisition of Slough Heat and Power Ltd from SEGRO plc for a total cash consideration of £49.25m. The 101MW CHP plant is the UK’s largest dedicated biomass energy facility fueled by wood chips, biomass and waste paper. Part of the plant is contracted under the Non Fossil Fuel Obligation and part of it produces over 200GWH of output qualifying for Renewable Obligation Certificates (ROCs), which is equivalent to around 90MW of wind generation. Scottish & Southern Energy - January 2, 2007.

    PetroChina Co Ltd, the country's largest oil and gas producer, plans to invest 800 million yuan to build an ethanol plant in Nanchong, in the southwestern province of Sichuan, its parent China National Petroleum Corp said. The ethanol plant has a designed annual capacity of 100,000 tons. ABCMoneyNews - December 21, 2007.

    Mexico passed legislation to promote biofuels last week, offering unspecified support to farmers that grow crops for the production of any renewable fuel. Agriculture Minister Alberto Cardenas said Mexico could expand biodiesel faster than ethanol. More soon. Reuters - December 20, 2007.

    Oxford Catalysts has placed an order worth approximately €700,000 (US$1 million) with the German company Amtec for the purchase of two Spider16 high throughput screening reactors. The first will be used to speed up the development of catalysts for hydrodesulphurisation (HDS). The second will be used to further the development of catalysts for use in gas to liquid (GTL) and Fischer-Tropsch processes which can be applied to next generation biofuels. AlphaGalileo - December 18, 2007.

    According to the Instituto Brasileiro de Geografia e Estatística (IBGE), Brazil's production of sugarcane will increase from 514,1 million tonnes this season, to a record 561,8 million tonnes in the 2008/09 cyclus - an increase of 9.3%. New numbers are also out for the 2007 harvest in Brazil's main sugarcane growing region, the Central-South: a record 425 million tonnes compared to 372,7 million tonnes in 2006, or a 14% increase. The estimate was provided by Unica – the União da Indústria de Cana-de-Açúcar. Jornal Cana - December 16, 2007.

    The University of East Anglia and the UK Met Office's Hadley Centre have today released preliminary global temperature figures for 2007, which show the top 11 warmest years all occurring in the last 13 years. The provisional global figure for 2007 using data from January to November, currently places the year as the seventh warmest on records dating back to 1850. The announcement comes as the Secretary-General of the World Meteorological Organization (WMO), Michel Jarraud, speaks at the Conference of the Parties (COP) in Bali. Eurekalert - December 13, 2007.

    The Royal Society of Chemistry has announced it will launch a new journal in summer 2008, Energy & Environmental Science, which will distinctly address both energy and environmental issues. In recognition of the importance of research in this subject, and the need for knowledge transfer between scientists throughout the world, from launch the RSC will make issues of Energy & Environmental Science available free of charge to readers via its website, for the first 18 months of publication. This journal will highlight the important role that the chemical sciences have in solving the energy problems we are facing today. It will link all aspects of energy and the environment by publishing research relating to energy conversion and storage, alternative fuel technologies, and environmental science. AlphaGalileo - December 10, 2007.

    Dutch researcher Bas Bougie has developed a laser system to investigate soot development in diesel engines. Small soot particles are not retained by a soot filter but are, however, more harmful than larger soot particles. Therefore, soot development needs to be tackled at the source. Laser Induced Incandescence is a technique that reveals exactly where soot is generated and can be used by project partners to develop cleaner diesel engines. Terry Meyer, an Iowa State University assistant professor of mechanical engineering, is using similar laser technology to develop advanced sensors capable of screening the combustion behavior and soot characteristics specifically of biofuels. Eurekalert - December 7, 2007.

    Lithuania's first dedicated biofuel terminal has started operating in Klaipeda port. At the end of November 2007, the stevedoring company Vakaru krova (VK) started activities to manage transshipments. The infrastructure of the biodiesel complex allows for storage of up to 4000 cubic meters of products. During the first year, the terminal plans to transship about 70.000 tonnes of methyl ether, after that the capacities of the terminal would be increased. Investments to the project totaled €2.3 million. Agrimarket - December 5, 2007.

    New Holland supports the use of B100 biodiesel in all equipment with New Holland-manufactured diesel engines, including electronic injection engines with common rail technology. Overall, nearly 80 percent of the tractor and equipment manufacturer's New Holland-branded products with diesel engines are now available to operate on B100 biodiesel. Tractor and equipment maker John Deere meanwhile clarified its position for customers that want to use biodiesel blends up to B20. Grainnet - December 5, 2007.

    According to Wetlands International, an NGO, the Kyoto Protocol as it currently stands does not take into account possible emissions from palm oil grown on a particular type of land found in Indonesia and Malaysia, namely peatlands. Mongabay - December 5, 2007.

    Malaysia's oil & gas giant Petronas considers entering the biofuels sector. Zamri Jusoh, senior manager of Petronas' petroleum development management unit told reporters "of course our focus is on oil and gas, but I think as we move into the future we cannot ignore the importance of biofuels." AFP - December 5, 2007.

    In just four months, the use of biodiesel in the transport sector has substantially improved air quality in Metro Manila, data from the Philippines Department of Environment and Natural Resources (DENR) showed. A blend of one percent coco-biodiesel is mandated by the Biofuels Act of 2007 which took effect last May. By 2009, it would be increased to two percent. Philippine Star - December 4, 2007.

    Kazakhstan will next year adopt laws to regulate its fledgling biofuel industry and plans to construct at least two more plants in the next 18 months to produce environmentally friendly fuel from crops, industry officials said. According to Akylbek Kurishbayev, vice-minister for agriculture, he Central Asian country has the potential to produce 300,000 tons a year of biodiesel and export half. Kazakhstan could also produce up to 1 billion liters of bioethanol, he said. "The potential is huge. If we use this potential wisely, we can become one of the world's top five producers of biofuels," Beisen Donenov, executive director of the Kazakhstan Biofuels Association, said on the sidelines of a grains forum. Reuters - November 30, 2007.

    SRI Consulting released a report on chemicals from biomass. The analysis highlights six major contributing sources of green and renewable chemicals: increasing production of biofuels will yield increasing amounts of biofuels by-products; partial decomposition of certain biomass fractions can yield organic chemicals or feedstocks for the manufacture of various chemicals; forestry has been and will continue to be a source of pine chemicals; evolving fermentation technology and new substrates will also produce an increasing number of chemicals. Chemical Online - November 27, 2007.

    German industrial conglomerate MAN AG plans to expand into renewable energies such as biofuels and solar power. Chief Executive Hakan Samuelsson said services unit Ferrostaal would lead the expansion. Reuters - November 24, 2007.

    Analysts think Vancouver-based Ballard Power Systems, which pumped hundreds of millions and decades of research into developing hydrogen fuel cells for cars, is going to sell its automotive division. Experts describe the development as "the death of the hydrogen highway". The problems with H2 fuel cell cars are manifold: hydrogen is a mere energy carrier and its production requires a primary energy input; production is expensive, as would be storage and distribution; finally, scaling fuel cells and storage tanks down to fit in cars remains a huge challenge. Meanwhile, critics have said that the primary energy for hydrogen can better be used for electricity and electric vehicles. On a well-to-wheel basis, the cleanest and most efficient way to produce hydrogen is via biomass, so the news is a set-back for the biohydrogen community. But then again, biomass can be used more efficiently as electricity for battery cars. Canada.com - November 21, 2007.

    South Korea plans to invest 20 billion won (€14.8/$21.8 million) by 2010 on securing technologies to develop synthetic fuels from biomass, coal and natural gas, as well as biobutanol. 29 private companies, research institutes and universities will join this first stage of the "next-generation clean energy development project" led by South Korea's Ministry of Commerce, Industry and Energy. Korea Times - November 19, 2007.

    OPEC leaders began a summit today with Venezuelan President Hugo Chavez issuing a chilling warning that crude prices could double to US$200 from their already-record level if the United States attacked Iran or Venezuela. He urged assembled leaders from the OPEC, meeting for only the third time in the cartel's 47-year history, to club together for geopolitical reasons. But the cartel is split between an 'anti-US' block including Venezuela, Iran, and soon to return ex-member Ecuador, and a 'neutral' group comprising most Gulf States. France24 - November 17, 2007.

    The article "Biofuels: What a Biopact between North and South could achieve" published in the scientific journal Energy Policy (Volume 35, Issue 7, 1 July 2007, Pages 3550-3570) ranks number 1 in the 'Top 25 hottest articles'. The article was written by professor John A. Mathews, Macquarie University (Sydney, Autralia), and presents a case for a win-win bioenergy relationship between the industrialised and the developing world. Mathews holds the Chair of Strategic Management at the university, and is a leading expert in the analysis of the evolution and emergence of disruptive technologies and their global strategic management. ScienceDirect - November 16, 2007.

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Thursday, January 03, 2008

Investments in renewables break $100 billion barrier in 2007

The clean energy sector powered ahead in 2007, according to an analysis by New Energy Finance. In spite of difficult conditions on the credit markets, the amount of new money invested in the sector grew to $117.2bn, up 41% from 2006’s $83.0bn, and more than $20bn ahead of predictions.

The clean energy sector weathered last summer’s credit crunch well, partly because nonfinancial drivers such as regulation, political will and fears over energy supplies remain strong. It was also helped by a shift in focus from more mature wind and biofuels markets in Western Europe and the US towards Asia, Brazil and other developing countries. Wind power continued to lead the way, but the year also saw strong growth in solar power and energy efficiency. Investments in biofuels fell back from 2006’s record year, hampered by surging feedstock costs.
  • The biggest portion of investment funds went to asset financing, up 40% on 2006, at $54.5bn.
  • The highest growth rate was in public markets, where investment was 80% higher than in 2006, at $18.9bn, the biggest portion being the $6.6bn flotation of Iberdrola Renovables (Iberenova). If this IPO is excluded, public market new investment grew by a more sedate 17%.
  • Venture capital and private equity new investment grew by 27% to $8.5bn. Investors retreated from later stage investments and returned to early stage deals, as their familiarity with the sector and technologies grew and the pipeline of commercialisation ready opportunities dried up.
  • The year was marked by the launch of clean energy funds by several high street asset management companies, including HSBC, F&C, Schroeders, Virgin and DWS.
Asset financing
Clean energy asset financing was resilient in 2007 in the face of turmoil on the world’s debt markets, with a record $54.5bn invested. Investors were forced to shift their emphasis from project finance deals to on-balance-sheet financings, which made up 64% of total asset financing activity, up from 44% in 2006. Much of this came from the South American biofuels industry and wind, biomass and waste-to-energy deals in China:
:: :: :: :: :: :: :: :: ::

Wind investment accounted for nearly half of the total new investment in projects, or $24.8bn. Much of the growth in wind investment in 2007 took place in Asia and Oceania, whose $8.4bn of deals outstripped the Americas ($6.6bn) while investment in the EMEA region grew to $9.8bn after falling by $1.5bn in 2006.

The remaining $29.7bn investment was largely in biofuels projects ($14.5bn); biomass & waste ($7.1bn); and solar ($5.9bn). The 30% increase in investment in biofuel assets contrasted with 2006’s 171% growth, which was driven by the US’s love affair with corn-based ethanol. In 2007, much of the activity took place in South America, chiefly in Brazil, while the US ethanol industry stalled under difficult market conditions, with many producers shelving plans for capacity expansion. The ratification in December of the US energy bill, with its ambitious renewable fuels standard that calls for 36bn gallons of alternative fuels by 2022, should considerably improve the outlook for US ethanol.

New investment in biomass & waste grew by 51% from $4.7bn in 2006. As with wind, most of the surge took place in China, where the government has great hopes for biomass. Solar project investment of $5.9bn was 82% higher than 2006, as Spain and Italy continued their drive for larger photovoltaic projects. Spain has seen a great rush as investors tried to pushed their projects to qualify for the a 400MW subsidy cap. Greece and France are largely markets-in-waiting, constrained by bureaucracy and the lack of mature building-integrated photovoltaic products.

Public markets

In 2007, $18.9bn of new money was raised by clean energy companies on the public markets, up 80% from $10.5bn last year. Much of the increase was driven by one deal: the landmark flotation of Iberdrola Renovables, which raised $6.6bn, six times more than the previous record deal, REC of Norway’s $1.1bn IPO last May. Although the IPO was priced at the bottom end of its lead coordinators’ price range at €5.30 per share, it represented a hefty market capitalisation of €22.4bn ($33bn) at the start of trading on 13 December. [Note: Iberdrola's portfolio is dominated by wind energy, constituting 97.8% of its installed capacity; microhydro makes up 0.7% and other renewables, including biomass only 1.6%; for the table, we divided the money raised on the market by Iberdrola, by the share of the different renewables in its portfolio].

Solar companies raised $5.8bn of new equity on the public markets during 2007, once again chiefly Chinese cell and module makers listing on US markets.

Biofuels groups managed to raise $1.0bn, almost $2bn less than in 2006, and energy efficiency groups caused excitement, by raising $0.8bn, led by EnerNOC and Comverge, as policy makers and investors realised the potential of the sector.

The WilderHill New Energy Global Innovation Index (NEX), which tracks the fortunes of 88 clean energy companies worldwide, rose nearly 60% in 2007, taking its increase over the past two years to over 110%.

Venture Capital / Private Equity

In 2007, venture capital and private equity investment increased to $8.5bn, up 27% from 2006. Early-stage VC made strong gains, increasing to $1.8bn from $0.8bn in 2006 as investors found it harder to find value in later stage deals due to greater competition and were driven to make earlier-stage bets. Late stage VC was the only investment stage to attract less money than last year, falling by a little over $100m to $1.1bn.

Solar became the leading sector for VC and PE, attracting $3.0bn of new equity, and biofuels decreased slightly on last year to $2.0bn. The two other leading sectors were wind ($1.8bn) and energy efficiency companies ($1.2bn).

Much of the increase in solar investment was down to young US solar companies attracting early-stage VC investment. In 2006, just $181m was invested in such firms, in 2007 this increased to $702m. In Europe, where the solar industry is more mature, a meagre $59m of early-stage VC found its way to solar companies. Some of bigger solar investments worldwide were in thin-film technology, which offers a way around the currently limited supply of solar silicon. HelioVolt raised $101m, while Solyndra raised $80m and SoloPower attracted $30m. Solar installation companies also featured prominently, pushed into the spotlight by Arnold Schwarzenegger’s California Solar Initiative. Early stage venture investment in energy efficiency companies more than doubled in both North America and Europe, to $316m and $96m respectively.

New Energy Finance: Clean energy investment breaks the $100bn barrier in 2007 - January 3, 2007.


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