http://www.smallcappulse.com/index.php/articles/detail/ en tpitcher@smallcappulse.com Copyright 2010 2010-03-18T16:06:00-08:00 http://www.smallcappulse.com/index.php/site/rodman_renshaw_lowers_price_target_on_ascent_solar_maintains_outperform_rat/ http://www.smallcappulse.com/index.php/site/rodman_renshaw_lowers_price_target_on_ascent_solar_maintains_outperform_rat/#When:15:06:00Z March 18, 2010 – Analyst Comments – Rodman & Renshaw lowered its price target on Ascent Solar (Nasdaq:ASTI) from $8 to $5, citing delays in certification and delays in expected production ramp. The stock is rated MARKET OUTPERFORM/SPECULATIVE RISK. Key Takeaways·         Expectations on external product certification are further out than originally anticipated, and without UL and TUV certifications products can’t go to market. ·         Only 6MW to 8MW of capacity in FAB2 is expected to come online in 2010 (expectations based on prior guidance were for 15MW to 30MW)·         Near term focus on EIPV market·         Lowered revenue and net income projections·         “If we don’t see traction towards re-stated milestones, we will have to revisit our rating” ·         $5 price target based on DCF  analysis 2010-03-18T15:06:00-08:00 http://www.smallcappulse.com/index.php/site/rodman_renshaw_lowers_price_target_on_ascent_solar_maintains_outperform_rat/ http://www.smallcappulse.com/index.php/site/rodman_renshaw_lowers_price_target_on_ascent_solar_maintains_outperform_rat/#When:15:06:00Z March 18, 2010 – Analyst Comments – Rodman & Renshaw lowered its price target on Ascent Solar (Nasdaq:ASTI) from $8 to $5, citing delays in certification and delays in expected production ramp. The stock is rated MARKET OUTPERFORM/SPECULATIVE RISK. Key Takeaways ·         Expectations on external product certification are further out than originally anticipated, and without UL and TUV certifications products can’t go to market. ·         Only 6MW to 8MW of capacity in FAB2 is expected to come online in 2010 (expectations based on prior guidance were for 15MW to 30MW)·         Near term focus on EIPV market ·         Lowered revenue and net income projections·         “If we don’t see traction towards re-stated milestones, we will have to revisit our rating” ·         $5 price target based on DCF  analysis 2010-03-18T15:06:00-08:00 http://www.smallcappulse.com/index.php/site/str_holdings_nasdaqstri_reports_stock_moving_higher_cowens_stone_reiterates/ http://www.smallcappulse.com/index.php/site/str_holdings_nasdaqstri_reports_stock_moving_higher_cowens_stone_reiterates/#When:13:22:00Z March 18, 2010 – Analyst Comments – Cowen’s Rob Stone commented on STR Holdings’ (Nasdaq:STRI) financial results, reiterating his OUTPERFORM rating on the stock, noting he sees 25% upside in the stock relative to the market in 12 months. The stock is up 9% this morning. Financial Results STR Holdings (Nasdaq:STRI) reported Q409 revenue for its solar segment of $50.3 million, up 42.3% sequentially and 4.2% on a Y/Y basis. Solar segment gross margin for Q409 was 43.7%, compared with 28.9% for the same period last year. Consolidated net income for Q409 rose 174.5% to $8.9 million or $0.23 per diluted share compared with $3.2 million for Q408. For the FY09, solar revenues were $149.5 million, down from $183.3 million from the prior year. Solar segment gross margin was 38.9% and 43.1%, respectively. Consolidated net income came in at $23 million, or $0.61 per diluted share, compared with $28.1 million for the FY08. In terms of guidance, management expects Q1 solar segment revenues to be $52 to $55 million and FY10 solar segment revenues to be $185 to $200 million. Key Takeaways ·         Higher utilization and relatively stable ASP drove solar GM ·         Raised 2010-12E revenue to $327.5 million, $389 million and $480 million, citing higher shipments and better ASPs, and EPS of $1.09, $1.30 and $1.60, respectively. ·         Starting 2013 at $1.97 on revenue of $589 million ·         Cited improvements in lamination throughput which should boost productivity and mitigate ASP pressure 2010-03-18T13:22:00-08:00 http://www.smallcappulse.com/index.php/site/american_superconductor_nasdaqamsc_not_as_problematic_as_citron_would_like_/ http://www.smallcappulse.com/index.php/site/american_superconductor_nasdaqamsc_not_as_problematic_as_citron_would_like_/#When:12:22:00Z March 18, 2010 – Citron Research wrote a daftly named article, in an attempt at wit, naming it “American Superconductor (Nasdaq:AMSC) – “One Product + One Customer + One Country = Many Problems” this week, basically telling us all that American Superconductor is a one-trick pony and, caveat emptor. We couldn’t disagree more, and think the criticism is misleading at best. To be sure, Sinovel has been the lion’s share of American Superconductor’s business in recent years. But this year, look for about 10 to 12 other wind companies (including Wikou, Fuhrländer AG, Doosan, CSR-ZELRI, AAER, Ghodawat Industries, TECO, Model Enerji, XJ Group, Hyundai Heavy Industries, INOX Wind and Shenyang Blower Works) to come online and into production in the Asian markets with American Superconductor. This is going to dramatically diversify AMSC’s wind business. By the way, the Sinovel relationship is still one very much worth having. The author writes: “Oddly enough, even during this enormous boom time of shipping to one customer, AMSC was never really able to put up a huge profit.  After reporting huge losses for years, the best they have been able to put up in 2009 is an 12c qtr, a run rate which prices the company for a 60 P/E … if they can keep it up.”…and “After reporting huge losses for years, the best they have been able to put up in 2009 is an 12c qtr, a run rate which prices the company for a 60 P/E.” Setting aside the poor grammar, the Company expects to report $0.65 to $0.67 EPS this year, better than that $0.12 per quarter run rate, and management is forecasting 70% earnings growth this year, an indication American Superconductor is ‘keeping up’. In terms of visibility going forward, it has indicated there is about $350 million in the backlog shippable in FY10.In terms of further diversification, both in terms of customers, geographies and product lines: ·         D-VAR Product Line: the smart grid infrastructure build-out is underway and ramping. American Superconductor’s technology enables utilities to stabilize and boost power grid capacity, and more efficiently bring wind power onto the grid. The company says it has about 100 utility and wind farm customers. ·         U.S. Wind Market: this is an emerging opportunity and American Superconductor said it intends to announce a U.S. partner this year. It has stated that both Sinovel and Hyundai are ramping their efforts to tap the U.S. wind market as well. ·         Offshore Wind: it reports having multiple customers for its 3MW and 5MW designs and is uniquely positioned to lead in the 10MW category. ·         Utility Scale Solar: American Superconductor is an established leader in grid interconnection for wind energy. As the market for utility scale solar heats up, the company is well-positioned to adapt its technology to utility solar requirements. ·         Superconductor: Admittedly, the company continues to lose about $25 million annually in this business segment. But the advantages the technology has over copper-based systems is significant and infrastructure upgrades are becoming more critical both in the U.S. and Asia. Getting back to the author’s fundamental analysis, the company is currently trading at 3.7x FY09E revenues and 2.9x FY10E revenues, while it is trading at 39x FY09E earnings and 22x FY10E earnings – hardly indicative of failing to keep up. The hyperbole about “perfect storms” is nothing more, underpinned by red herrings such as concerns about U.S. trade relations with China, which have little relevance to American Superconductor’s near-term growth plans and forecasts, and paranoia about not having the inside track in terms of how the company maintains its gross margins. To be sure, gross margins come under pressure in maturing and increasingly competitive industries. But this is not a dynamic specific to American Superconductor. And fair enough, the CEO is selling stock. But officers taking some profit and benefit based on past performance is hardly indicative of a smoking gun. The author states, “CEO Greg Yurek alone has sold over 375,000 shares just this year, and consistently bangs out his options as they are earned, retaining fewer shares than he’s sold just during 2010.” Well, back in 2008, Yurek sold more than 700,000 shares. Meanwhile, the company’s stock has held up just fine, business conditions have improved and the company has become profitable, while maintaining a more than respective year-over-year growth rate on both the top-and-bottom lines. NOTE: In the interest of full disclosure - we are bullish on American Superconductor and have advocated selling puts on the stock as a strategy to own the stock at a lower price. Consult your broker on derivative strategies. Important Disclosure: This information is intended to assist investors.  The information does not constitute investment advice or an offer to invest or to provide management services and is subject to correction, completion and amendment without notice.  Any such offer, if made, will only be made by means of a confidential prospectus or offering memorandum or management agreement.  It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future results or expectations.  As with all investments, there are associated risks and you could lose money investing.  Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment 2010-03-18T12:22:00-08:00 http://www.smallcappulse.com/index.php/site/stone_reiterates_outpeform_rating_on_sunpower_cites_clarity_on_earnings_and/ http://www.smallcappulse.com/index.php/site/stone_reiterates_outpeform_rating_on_sunpower_cites_clarity_on_earnings_and/#When:18:00:00Z March 17, 2010 – Analyst Comments – Cowen’s Rob Stone commented on SunPower’s (Nasdaq:SPWRA) expected financial results, as well as communications regarding the resolution of the Company’s previously announced accounting issues, noting that both events should drive the stock. Stone reiterated his OUTPERFORM rating on the stock, and sees 40%+ upside vs. the market over the next 12 months. Key Takeaways·         Q4 revenue and gross profit could beat estimates, but bottom line could be dampened by accounting and legal expenses. Modeling Q1 revenue down 20% sequentially. ASPs could be incrementally lower. ·         Thinks 2010 EPS guidance will “bracket” the Street·         Module output is constrained but will be impacted by allocation and timing of projects ·         Higher performance should continue to support a premium module price. ·         From stock perspective, expects it to take some time for SunPower to “rebuild credibility’ with investors, which will impact valuation in near term. Brand remains well-positioned. 2010-03-17T18:00:00-08:00 http://www.smallcappulse.com/index.php/site/stone_reiterates_outpeform_rating_on_sunpower_cites_clarity_on_earnings_and/ http://www.smallcappulse.com/index.php/site/stone_reiterates_outpeform_rating_on_sunpower_cites_clarity_on_earnings_and/#When:18:00:00Z March 17, 2010 – Analyst Comments – Cowen’s Rob Stone commented on SunPower’s (Nasdaq:SPWRA) expected financial results, as well as communications regarding the resolution of the Company’s previously announced accounting issues, noting that both events should drive the stock. Stone reiterated his OUTPERFORM rating on the stock, and sees 40%+ upside vs. the market over the next 12 months. Key Takeaways ·         Q4 revenue and gross profit could beat estimates, but bottom line could be dampened by accounting and legal expenses. Modeling Q1 revenue down 20% sequentially. ASPs could be incrementally lower. ·         Thinks 2010 EPS guidance will “bracket” the Street ·         Module output is constrained but will be impacted by allocation and timing of projects ·         Higher performance should continue to support a premium module price. ·         From stock perspective, expects it to take some time for SunPower to “rebuild credibility’ with investors, which will impact valuation in near term. Brand remains well-positioned. 2010-03-17T18:00:00-08:00 http://www.smallcappulse.com/index.php/site/stone_reiterates_str_holdings_nasdaqstri_at_outperform_sees_upside_to_stock/ http://www.smallcappulse.com/index.php/site/stone_reiterates_str_holdings_nasdaqstri_at_outperform_sees_upside_to_stock/#When:12:38:00Z March 16, 2010 – Analyst Comments – Cowen’s Rob Stone weighed in this morning on STR Holdings (Nasdaq:STRI) in anticipation of the company’s Q4 and FY09 financial results announcement. Stone reiterated his OUTPERFORM rating, expecting a “modest upside” to Q409 results. Sees 25%+ upside vs. the market in 12 months. Key Takeaways ·         STRI looks well positioned for 2010, strong PV industry shipment growth, likely market share gains in Asia (well positioned with new Malaysia plant) and mix shift from thin film to c-Si (consumes more encapsulant per watt) ·         Expects Q409 EPS of $0.23 on $68 million, modeling Q1 at $65 million in revenue ·         Mix shift from thin-film to c-Si – Stone points out that c-Si modules use two sheets of encapsulant, compared to thin-film, which uses one. This shift in STRI’s business should add to STRI’s unit volume. 2010-03-16T12:38:00-08:00 http://www.smallcappulse.com/index.php/site/stones_take_on_solar/ http://www.smallcappulse.com/index.php/site/stones_take_on_solar/#When:16:19:01Z March 15, 2010 – Analyst Comments – Rob Stone issued a note this morning to clear up some of the confusion about how the PV market is being perceived. Key Points: ·         “Excess capacity” is old news and Stone thinks it won’t be responsible for causing another price collapse this year. Instead, subsidy policies, project credit, variable input costs and currency will be key drivers. ·         Keep in mind PV is a growth market and focus on companies expanding, increasing scale. ·         Expect industry consolidation ·         Only those delivering price/performance with scale to stay solvent (adding capacity) amidst falling costs will stay in the game 2010-03-15T16:19:01-08:00 http://www.smallcappulse.com/index.php/site/stone_says_solar_group_undervalued_comments_on_amendment_to_eeg/ http://www.smallcappulse.com/index.php/site/stone_says_solar_group_undervalued_comments_on_amendment_to_eeg/#When:12:57:00Z March 15, 2010 – Analyst Comments – Cowen’s Rob Stone said this morning that he continues to think the solar group is undervalued, commenting on ground mount FIT delays in Germany and farmland which is still in dispute. Key Points: ·         According to new draft amendment to EEG, the  FIT cuts for ground mount systems would be postponed three months (to October 1st), ground mount projects on farmland which had permits by March 3, 2010 may be completed under the existing FIT until the end of 2010, and the corridor for ground mount systems along railroads and freeways is doubled to 200 meters (from 100). The time period for measuring the market size (which determines the 2011 degression) is also pushed out by one month, to start in July. ·         Stone reiterated OUTPERFORM ratings on First Solar (Nasdaq:FSLR), SunPower (Nasdaq:SPWRA), Suntech (NYSE:STP) STR Holdings (Nasdaq:STRI) and Trina Solar (Nasdaq:TSL). 2010-03-15T12:57:00-08:00 http://www.smallcappulse.com/index.php/site/stone_cuts_estimates_on_china_sunergy_nasdaqcsun_maintains_neutral/ http://www.smallcappulse.com/index.php/site/stone_cuts_estimates_on_china_sunergy_nasdaqcsun_maintains_neutral/#When:12:26:00Z March 12, 2010 – Analyst Comments – Cowen’s Rob Stone maintained his NEUTRAL rating on China Sunergy (Nasdaq:CSUN) this morning, commenting on the company’s financial results for Q409 and FY09.   Financial Results Reported Q4 revenues of $97.6 million, up 21.8% sequentially and 125.9% on a Y/Y basis. Gross margin was 10.7%, compared to 10.2% in Q309 and negative gross margins for Q408. Net loss for Q409 was $3.5 million, or $0.09 per diluted ADS, compared with net income of $7.8 million for Q309 and a net loss of $26.8 million in Q408. The company shipped 74.3MW, compared with 54.4MW in Q309 and 14.1MW for the same period last year. Blended ASPs during Q409 were $1.26/watt, down sequentially from $1.32/watt. Blended ASPs for Q408 were $2.97. Wafer costs for Q409 were $0.80/watt, compared to $0.87/watt in Q309. FY09 revenues were $284.9 million, down 18.8% Y/Y, on shipments of about 194MW, compared to 107.2MW for FY08. Gross margin was 5.8%, compared with 4.4% in 2008. Net loss for the year was $9.8 million, or $0.25 per diluted ADS, compared with a net loss of $22.9 million for FY08. Blended ASPs for FY09 were $1.36/watt, compared with $3.32/watt in FY08. Wafer costs for the year were $0.95/watt, compared to $2.78/watt in 2008. In terms of guidance, management expects Q1 shipments to be between 68MW to 75MW with a gross margin between 12%-14%. For FY10, it expects to ship between 280MW to 350MW. Key Takeaways ·         In addition to following up with note on CEO’s absence at the conference call, and suggestion that the company’s technology is attractive, Stone said “the pure-play cell model lacks scale and home” citing price pressures on module manufactures which is pushing them out of Europe and upstream firms increasingly going vertical – which is shrinking the range of potential suppliers and customers for CSUN. ·         Stone thinks the stock is likely to trade near book value. ·         Cut estimates – cut Q1 ASP by 4-5%, lowered GM to 10-11%; cut 2010-12 EPS to $0.19, $0.28 and $0.15 on sales of $359 million, $416 million and $475 million. Started 2013 EPS at $0.13 on revenues of $530 million. 2010-03-12T12:26:00-08:00 http://www.smallcappulse.com/index.php/site/china_sunergy_nasdaqcsun_reports_stone_maintains_neutral_rating/ http://www.smallcappulse.com/index.php/site/china_sunergy_nasdaqcsun_reports_stone_maintains_neutral_rating/#When:14:03:00Z March 11, 2010 – Analyst Comments – Cowen’s Rob Stone commented on China Sunergy’s (Nasdaq:CSUN) financial results for Q409 and FY09, reiterating his NEUTRAL rating. Stone noted that “The CEO did not attend the conference call, and the presentation by management created the impression that the outlook  and strategy are quite uncertain.” Stone hinted that the technology could be attractive from some kind of strategic alliance or combination. Financial Performance China Sunergy (Nasdaq:CSUN) reported Q4 revenues of $97.6 million, up 21.8% sequentially and 125.9% on a Y/Y basis. Gross margin was 10.7%, compared to 10.2% in Q309 and negative gross margins for Q408. Net loss for Q409 was $3.5 million, or $0.09 per diluted ADS, compared with net income of $7.8 million for Q309 and a net loss of $26.8 million in Q408. The company shipped 74.3MW, compared with 54.4MW in Q309 and 14.1MW for the same period last year. Blended ASPs during Q409 were $1.26/watt, down sequentially from $1.32/watt. Blended ASPs for Q408 were $2.97. Wafer costs for Q409 were $0.80/watt, compared to $0.87/watt in Q309. FY09 revenues were $284.9 million, down 18.8% Y/Y, on shipments of about 194MW, compared to 107.2MW for FY08. Gross margin was 5.8%, compared with 4.4% in 2008. Net loss for the year was $9.8 million, or $0.25 per diluted ADS, compared with a net loss of $22.9 million for FY08. Blended ASPs for FY09 were $1.36/watt, compared with $3.32/watt in FY08. Wafer costs for the year were $0.95/watt, compared to $2.78/watt in 2008. In terms of guidance, management expects Q1 shipments to be between 68MW to 75MW with a gross margin between 12%-14%. For FY10, it expects to ship between 280MW to 350MW. 2010-03-11T14:03:00-08:00 http://www.smallcappulse.com/index.php/site/aspires_alt_energy_and_clean_tech_highlights_week_to_date_march_10_2010/ http://www.smallcappulse.com/index.php/site/aspires_alt_energy_and_clean_tech_highlights_week_to_date_march_10_2010/#When:13:47:00Z March 10, 2010 - China and India formally agreed Tuesday to join the Copenhagen Accord, a three-page nonbinding statement, reached in December in Copenhagen, the last two major economies to sign up. The Accord calls for limiting the rise in global temperatures to no more than 2 degrees Celsius or 3.6 degrees Fahrenheit, beyond pre-industrial levels. It also calls of spending as much as $100 billion annually to help developing countries adopt to climate change. The Accord carries about as much weight as a bumper sticker, with no formal adoption having taken place amongst countries, but rather, they will ‘take note’ of it. IMF Managing Director Dominique Strauss-Kahn proposed this week for the world’s governments to pool together to raise money to adopt to climate change – a move which seems to us about as likely as getting consensus agreement on a framework at Copenhagen. He suggested a quota system similar to the one the IMF uses to raise its own money and that the IMF will release a paper later this week with full details. The U.S. is currently the largest shareholder of the IMF. The difference is that the IMF is a vehicle which has served U.S. business interests historically. On the other hand, as the Chamber of Commerce’ position continues to demonstrate, it is far from clear that there is a sense that raising capital for the IMF would be perceived by the Chamber of Commerce et. al. to be in U.S. business interests. Obama this week has reportedly been pushing harder for a climate and energy bill this week, meeting with several senators on both sides of the aisle asking them to pass a comprehensive bill this year. The Waxman Markey proposal at this point seems to be an afterthought, taking a back seat to the Kerry Graham proposal, which would seek to cut GHGs by 17% by 2020. This proposal does not include cap-and-trade (or ‘pollution reduction’ as it being rebranded). It is also inevitably much friendlier to the nuclear, coal and oil industries than predecessor models, reflecting a major concession on the Democrat’s side to their inability to move a stronger pro-alt energy bill forward. Though there is still plenty of contention – with Kerry pushing for a price on carbon, a move opposed by the GOP and Chamber of Commerce because it would result in higher prices for oil and coal. Why no one brings up the fact that utilities and power producers always pass costs through to consumers is puzzling. For example, when a nuclear plant is being built or decommissioned higher costs are passed through to energy consumers in the region. Separately, at a National Press Club meeting this week, Lisa Jackson commented that “This is what smart environmental protection does.  It creates a need – in other words, a market for clean technology – and then drives innovation and invention – in other words, new products for that market. This is our convenient truth: smart environmental protection creates jobs.”  Stock Performance A theme which will continue to get more play as we move deeper into election season is the impact concerns about less stimulus and support to alt energy and clean tech will have on corporate performance. Obama sent a pretty clear signal at his State of the Union that he is backtracking on his initial stance with respect to nuclear, offshore oil drilling and even coal-fired plants, with the hope of securing enough GOP support to get some watered down version of his energy plan for America memorialized in the form of an energy bill. Now several states and organizations are pushing to expand the parameters of renewable energy funding to include nuclear, while the Chamber of Commerce is feeling its oats and pushing harder and harder to undercut the EPA’s ability to regulate emissions. All of these moves will have a dampening impact on support, in the form of stimulus funding and policy making, for alt energy and clean tech companies. Concerns about less support are not isolated to the U.S. either, and probably one of the most telling examples of this dynamic has been the solar sector, which has been hit hard based on expectations and worries that the impact of reduced FITs in Germany will weigh on demand. Biofuels The EIA reported this week that ethanol production continues to grow to meet the volume requirements of the Renewable Fuel Standard.  Ethanol production, which averaged 700,000 bbl/d in 2009, increases to an average of 800,000 bbl/d in 2010 and 850,000 bbl/d in 2011 in the forecast Bloomberg reported that ethanol is set for a rally by as much as 20%, noting that falling corn prices and record ethanol supplies have pushed the price down 17% in three months to $1.634/gallon. It is expected, however, to average $1.96/gallon at the peak of U.S. summer driving season as refiners mix more into gasoline (refiners get a $0.45 tax credit for each gallon they blend, and that incentive is helped by cheaper corn prices, which account for 70% of cost). Ethanol is currently $0.66 cheaper than gasoline, the biggest discount in 14 months. While corn has fallen to $3.75/bushel from $7.9925/bushel in June 2008. Add the $0.66 difference in ethanol prices and gasoline with the $0.45 tax credit and this adds up to a discount of about $1.11 to driving ethanol blending. Pacific Ethanol (Nasdaq:PEIX) announced agreements to satisfy $34.7 million of its outstanding debt and to cure existing defaults on the debt. Carbon, Clean Tech and Climate Change The EIA reported this week that carbon dioxide emissions from fossil fuels, which declined by 6.4 percent in 2009, increase by 1.5 percent and 1.2 percent in 2010 and 2011, respectively, in the forecast as economic growth fuels higher energy consumption. In Germany, GHGs fell 8.4% in 2009, and the government said output of GHGs is down 29% since 1990. While the IMF is advocating countries to get together on funding a fund to address climate change adoption, opposition amongst ‘developed’ and ‘developing’ countries on related issues remains at heightened levels. This week Reuters reported on the potential for the U.S. and Britain to withhold support at the World Bank for a $3.75 billion loan, of which $3 billion will go to Eskom to build a 4,800MW coal-fired plant in South Africa and about $0.75 billion will got to renewables and energy efficiency projects. Critics to the U.S. and Britain emphasize that both countries are building coal-plants in their own countries. Underpinning the controversy is guidance issued by the U.S. Treasury to encourage ‘no or low carbon energy’ options above coal-based choices, and assistance to borrowers in finding resources to make up the costs if the cleaner alternatives are more expensive. NRG Energy (NYSE: NRG) was selected by the United States Department of Energy to receive up to $154 million, including funding from the American Recovery and Reinvestment Act, to build a post-combustion carbon capture demonstration unit at NRG’s WA Parish plant southwest of Houston. The proposed project was submitted under the Clean Coal Power Initiative Program (CCPI). Energy Management The American Council for an Energy-Efficient Economy (ACEEE) reported this week that proposed federal energy efficiency jobs provisions would create about 333,000 jobs in 2010 and then 184,000 jobs in 2011 as funding begins to ramp down. Earnings Comverge (Nasdaq:COMV) said Q409 revenues were $40.8 million, up 24% Y/Y, while gross margin was 33% for Q409 compared with 55.8%  for Q408. Net loss for Q409 was $3.9 million, or $0.17 per diluted share, compared with net income for the same period last year of $6.1 million. For the FY09, revenues increased 28% to $98.8 million, with gross margins in FY09 of 33.5% compared to 43.8%  for FY08. Net loss for the FY09 was $31.7 million, or $1.45 per diluted share, compared with a net loss of $94.1 million for FY08. In terms of outlook, management expects FY10 revenues in the range of $125 to $137 million, and it expects to expand total MW under management by 800MW. Presently, Comverge has 1015MW under long-term capacity contracts which management expects to contribute about $498 million of total contracted future revenues. Hydropower Navigant Consulting’s Lisa Frantzis said hydropower capacity in the U.S. has the potential to quadruple from about 100,000MW  (about 7% of electricity generation) to 400,000MW. Solar Sector Solar Power (SOPW.OB) said it has received an initial commitment of $24.7 million in Recovery Zone Facility Bonds by Sacramento County and is looking into opening a manufacturing facility within Sacramento County to build panels. It also said it is set to commence development of a utility-scale PV system in Sacramento which will be in excess of 10MW, and which will have an estimated  value of $50 million upon completion (sounds about like $5/watt system installed). SunPower Corp. (Nasdaq: SPWRA) and K6 S.a.S. today announced an agreement to build  two 1MW solar power plants in the Puglia region, Italy. The two plants are located in Casamassima and Conversano and will be complete by August 2010. Trina Solar Limited (NYSE:TSL) signed a sales agreement with Essco Wholesale Electric, the southwest US company of Sonepar USA, where it will supply Essco with approximately 25 MW of PV modules and an additional 4 MW at the option of Essco, to be delivered during 2010. Trina said it has now secured a total of approximately 40 MW of PV modules from customers in the United States during 2010, all with agreed prices. Yingli Green Energy (NYSE:YGE) announced a 300MW PANDA mono-crystalline silicon-based manufacturing capacity expansion project at its Baoding headquarters. It also announced a RMB 1.5 billion project loan for the financing of the expansion project and a working capital credit facility of RMB 250 million from the Bank of Communications Co. Ltd. Hebei Branch. Equipment & Suppliers Satcon (Nasdaq:SATC) is delivering 78 PowerGate®Plus inverters to OZZ Solar, Inc., which it says will be deployed over 40 projects in Ontario’s commercial rooftop market, and are compliant under Ontario’s FIT program. Earnings ReneSola (NYSE:SOL) reported Q409 revenues of $179.9 million, up 27.7% sequentially, and up 13.4% on a Y/Y basis. Gross margin was 2.7%, 3.3% and negative for Q408 respectively. Net loss for Q409 was $19.9 million, or $0.12 per diluted share, compared with a net loss of $10.2 million in Q309 and $128.3 million for Q408. Shipments were 202.9MW in Q409, up 38.1% from Q309. Total wafer and module shipments were 187.4MW and 14.6MW, respectively, up 39.5% and 35.2% over Q309. For the FY09, revenues came in at $510.4 million, down 23.9% from FY08. For the FY09 gross margins remained negative, as in FY08. Net loss for the year was $63.7 million, or $0.43 per diluted share, compared with a net loss of $54.9 million for FY08. For the year, total product shipments were 526.6MW, up 50.4% on a Y/Y basis. In terms of guidance, management expects demand in 2010 to remain “robust” through the first half with stabilizing poly prices and increased wafer spot pricing .It expects total solar product shipments in the range of 215MW to 230MW, and revenues in the range of $195 million to $205 million, with gross margins of 16%  to 18%. For the FY10, it expects total product shipments to be in the range of 900MW to 950MW, with profitability and gross margins in the range of 17% to 20%. Upgrades & Downgrades March 8 – Western Wind (TSXV.WND) reiterated at BUY this week at LOM with a 12-month price target of $5.20. Lawrence Casse noted that the company reconfirmed 30MW re-powering phase of Mesa project; 11MW Steel Park expected to commence construction this year, with commercial power beginning in first half of 2011; and believes all PPA for 161MW in total projects will exceed $105/MWh, with eligibility for 30% cash grant from DOE, yielding net free cash flows in excess of $16.5 million for the first three years March 9 – JP Morgan downgraded First Solar (Nasdaq:FSLR) to UNDERWEIGHT, citing further subsidy cuts in Germany, moderation in demand in 2H10, and oversupply of modules. It also expects ASPs to decline by 20% this year. March 9 – Comverge (Nasdaq:COMV) reiterated at NEUTRAL at Cowen. Rob Stone said that the shares look fairly valued, raising estimates on higher utility and C&I volume. Other key points: Q4 revenue was in-line but weak GMs resulted in “much wider loss per share” – Stone noted margins were impacted by depreciation for on VPC contract and inefficiencies ramping new products/projects; Stimulus awards should contribute to upside but timing is uncertain; Raised 2010/11E revenue by 4% and 11%, respectively, to $131M and $173.5M, reducing loss per share to $0.41 and $0.13. Expect blended GM to improve to about 38%. Starting 2012/13E EPS at $0.22 and $0.50 on revenue of $218 million and $262 million; “Believes stock is fully valued here. Price/book is near the high-end of peers and EV/revenue seems appropriate given relative growth rates.” Finance and M&A GT Solar’s (Nasdaq:SOLR) stock may see some weakness this morning after pricing a secondary offering of 25 million shares of common stock at $4.85 per share, being sold by GT Solar Holdings LLC .The selling stockholder has granted the underwriters an option to purchase up to an additional 3.75 million shares of common stock at the secondary offering price to cover over-allotments, if any. UBS Securities LLC and Credit Suisse Securities (USA) LLC are the joint bookrunning managers for the offering, Thomas Weisel Partners LLC is the lead manager and Pacific Crest Securities LLC and Raymond James & Associates, Inc. are the co-managers.    U.S. Energy Markets (Quadrillion Btu)       2009 2010 2011 Renewables Consumption 7.13 7.52 8.02 Total Energy Consumption 95.33 96.82 98.18 Renewables as % of Consumption 7.5% 7.8% 8.2% Source: EIA Short-Term Energy Outlook (March 2010)   U.S. Energy Markets (Quadrillion Btu) Supply     2009 2010 2011 Hydroelectric Power 2.662 2.552 2.629 Geothermal 0.352 0.383 0.389 Solar  0.090 0.095 0.101 Wind 0.655 0.909 1.188 Wood 1.973 1.987 1.998 Ethanol 0.907 1.041 1.103 Biodiesel 0.068 0.078 0.110 Other Renewables   0.428 0.472 0.485 Total 7.133 7.516 8.003 Source: EIA Short-Term Energy Outlook (March 2010)   2010-03-10T13:47:00-08:00 http://www.smallcappulse.com/index.php/site/stone_maintains_neutral_on_comverge_nasdaqcomv_raises_estimates_says_stock_/ http://www.smallcappulse.com/index.php/site/stone_maintains_neutral_on_comverge_nasdaqcomv_raises_estimates_says_stock_/#When:13:32:01Z March 9, 2010 – Analyst Comments – Cowen’s Rob Stone weighed in this morning on Comverge’s (Nasdaq:COMV) financial results for Q4 and FY09. Stone maintains his NEUTRAL, noting that shares look fairly valued, raising estimates on higher utility and C&I volume. Financial Results Q409 revenues were $40.8 million, up 24% Y/Y, while gross margin was 33% for Q409 compared with 55.8%  for Q408. Net loss for Q409 was $3.9 million, or $0.17 per diluted share, compared with net income for the same period last year of $6.1 million. For the FY09, revenues increased 28% to $98.8 million, with gross margins in FY09 of 33.5% compared to 43.8%  for FY08. Net loss for the FY09 was $31.7 million, or $1.45 per diluted share, compared with a net loss of $94.1 million for FY08. In terms of outlook, management expects FY10 revenues in the range of $125 to $137 million, and it expects to expand total MW under management by 800MW. Presently, Comverge has 1015MW under long-term capacity contracts which management expects to contribute about $498 million of total contracted future revenues. Stone’s Takeaways ·         Q4 revenue was in-line but weak GMs resulted in “much wider loss per share” – Stone noted margins were impacted by depreciation for on VPC contract and inefficiencies ramping new products/projects. ·         Stimulus awards should contribute to upside but timing is uncertain ·         Raised 2010/11E revenue by 4% and 11%, respectively, to $131M and $173.5M, reducing loss per share to $0.41 and $0.13. Expect blended GM to improve to about 38%. Starting 2012/13E EPS at $0.22 and $0.50 on revenue of $218 million and $262 million. ·         “Believes stock is fully valued here. Price/book is near the high-end of peers and EV/revenue seems appropriate given relative growth rates.” 2010-03-09T13:32:01-08:00 http://www.smallcappulse.com/index.php/site/wind_energy_tsxvwnd_confirms_plans_casse_confirms_rating_and_520_price_targ/ http://www.smallcappulse.com/index.php/site/wind_energy_tsxvwnd_confirms_plans_casse_confirms_rating_and_520_price_targ/#When:13:59:00Z March 8, 2010 – Analyst Comments – LOM’s Lawrence Casse reiterated his BUY recommendation on Western Wind (TSXV:WND) this morning, and a 12-month price target of $5.20, Key Takeaways: ·         Reconfirmed 30MW re-powering phase of Mesa project ·         11MW Steel Park expected to commence construction this year, with commercial power beginning in first half of 2011 ·         Believes all PPA for 161MW in total projects will exceed $105/MWh, with eligibility for 30% cash grant from DOE, yielding net free cash flows in excess of $16.5 million for the first three years 2010-03-08T13:59:00-08:00 http://www.smallcappulse.com/index.php/site/casse_maintains_buy_on_western_wind_tsxvwnd_raises_price_target/ http://www.smallcappulse.com/index.php/site/casse_maintains_buy_on_western_wind_tsxvwnd_raises_price_target/#When:13:19:00Z March 4, 2010 – Analyst Comments – Lawrence Casse, of Loewen, Ondaatje, McCutcheon, rated Western Wind Energy (TSXV:WND) at a BUY increasing his price target to $5.20 (stock at about $1.65 now) from $4.10.   Key Takeaways: ·         Re-modeled Western Wind’s project, taking into account incentives in wind energy from U.S. stimulus bill, changes in rates and financing structures ·         Windstar (120MW) expected to begin construction in August this year and commence operations in Q1 2011, which should generate more than $12 million in annual free cash flow  - values this project alone at NAV $1.92 per diluted share ·         Expects repowering of Mesa wind farm near Palm Springs and Steel Part construction to begin this year ·         Regulatory drivers remain in place, while company has pipeline in high-wind areas of California 2010-03-04T13:19:00-08:00 http://www.smallcappulse.com/index.php/site/stone_thinks_concerns_on_german_fit_now_overdone_maintains_outperform_on_fs/ http://www.smallcappulse.com/index.php/site/stone_thinks_concerns_on_german_fit_now_overdone_maintains_outperform_on_fs/#When:13:10:00Z March 4, 2010 – Analyst Comments – Rob Stone said this morning that concerns about the impact of Germany’s Feed-in-Tariff cuts may be overblown, now that uncertainty has been reduced  with the cabinet-level agreement made public. He also pointed to other factors: ·         Ground mount projects permitted by 12/31/09 are grandfathered ·         A self-consumption bonus reduces the effective rooftop FIT cuts ·         The 3.5GW trigger for incremental 2011 will be based on the June-Sep run rate (more favorable than the 12-months to 9/30) Stone also reiterated his OUTPERFORM rating on First Solar (Nasdaq:FSLR), SunPower (Nasdaq:SPWRA) , STR Holdings (Nasdaq:STRI) and Trina Solar (NYSE:TSL). 2010-03-04T13:10:00-08:00 http://www.smallcappulse.com/index.php/site/stone_maintains_neutral_on_suntech_nysestp_despite_beating_estimates/ http://www.smallcappulse.com/index.php/site/stone_maintains_neutral_on_suntech_nysestp_despite_beating_estimates/#When:13:03:00Z March 4, 2010 – Analyst Comments – Cowen’s Rob Stone reiterated his NEUTRAL rating on Suntech (NYSE:STP) after the company reported Q409 and FY09 results, noting that EPS came in 128% above Street estimates and about 25% upside on revenues. He said “the magnitude of the upside may overcome worries about Germany and lift the shares. Financial Results Suntech (NYSE:STP) reported Q4 revenues of $583.6 million, up 23.4% over the prior quarter and compared with $414.4 million in Q408. GM in Q4 was 26.3%, compared with 20% in Q309 and 0.6% in Q408. Net income was $49.9 million, or $0.27 per share, $29.8 million and a net loss of $65.9 million, respectively. For the FY09, revenues were $1.69 billion, compared with $1.92 billion for FY08, with gross margin of 20% and 17.8% respectively. Net income was $91.5 million, or $0.53 per diluted ADS in FY09 compared with net income of $32.5 million for FY08. In terms of guidance, management expects Q1 shipments to increase by 5% to 10% over Q409, and consolidated GM to be 18% to 20%. It is targeting shipments of more than 1.25GW of PV products for FY10. It is also planning to expand cell and module capacity to 1.4GW by mid-2010, of which 450MW will be Pluto-enabled. 2010-03-04T13:03:00-08:00 http://www.smallcappulse.com/index.php/site/aspires_alt_energy_and_clean_tech_highlights_week_to_date_mar_3_2010/ http://www.smallcappulse.com/index.php/site/aspires_alt_energy_and_clean_tech_highlights_week_to_date_mar_3_2010/#When:17:14:00Z China has drafted a 10-year renewable energy plan which it intends to make public in the near-term, which will result in billions in investments, reduce reliance on fossil fuel imports and coal, and will be in line with the country’s goal to reduce GHGs by 40% to 45% by 2020. Renewable energy accounted for 9.9 percent of China's total energy consumption last year, up from 8.5 percent the year before, the report said. Under the plan, by 2020, the government intends to raise that to 15 percent. China's total energy consumption surged 6.3 percent last year to 3.1 billion tons of standard coal equivalent, up from 4 percent growth in 2008, the report said. Bloomberg New Energy Finance said it expects 30% of the $184 billion committed in the form of “green stimulus” from major economies around the world last year, to be deployed by governments this year – up from about 9% last year. Biofuels   Verenium (Nasdaq:VRNM) said it has extended an 18-month-old joint development program with BP for an additional month until April 1. The companies will continue their work on cellulosic ethanol while they negotiate a longer-term collaboration, receiving an additional $2.5 million from BP to co-fund the effort for March.  Clean Tech   Pollution Controls Sector   Fuel Tech (Nasdaq:FTEK) announced an exclusive 4-year alliance agreement with a ‘major domestic power producer’ for the potential supply of multiple nitrogen oxide (NOx) control systems. The initial modeling order for several of these units has been placed under the agreement. Solar Emerging Energy Research reported this week that the US utility-scale PV industry (systems >100 kW) closed the door on 2009 with 176 MW installed and an 18% jump over 2008 installed capacity. Amidst economic uncertainty, the uptick in US PV activity signals significant growth ahead as utilities scale to meet their 2020 targets. ·         It said the utility segment surged in Q4 2009, making up 63% of the solar PV market while adding over 50 MW as the first wave of large-scale PV projects were completed in the US, and ·         California dominated the US PV market in 2009, with over 90 MW of large-scale PV completed, and a utility-heavy pipeline of 474 MW slated for 2010. California accounts for 91 MW, or 52%, of PV systems installed in 2009. Secondary markets New Jersey, Florida, and Colorado also added significant capacity, while ·         Average project size rose above 1 MW in 2009 for the first time as PV continues to scale in the US in both the rooftop and ground-based segments   Ascent Solar (Nasdaq:ASTI) signed a strategic supply agreement with FTL Solar which includes a minimum purchase commitment of $6.5 million over a three year period. It said it is scheduled to begin shipments to FTL Solar for market seeding of emerging market opportunities with their lightweight solar integrated tensile fabric product line which intended to serve defense/disaster relief and the portable power segments that include awnings, fabric airbeams, fabric automobile covers, sailboat sails, tarps, tents, and umbrellas.   Yingli Green Energy (NYSE:YGE) said it signed a sales agreement with SunDurance Energy to supply more than 10 MW of PV modules to SunDurance Energy through the third quarter of 2010. Analyst Comments March 1 – Suntech (NYSE:STP) maintained at NEUTRAL at Cowen.  Rob Stone said he sees “Q4:09 upside and a strong H1 on higher shipments” but that concerns related to Germany will likely be a near-term drag on the stock, as well as a softer euro which could dampen Q1 margins. Modeling Q4 shipments of 220MW at $2.10/watt. Believes STP has been adding capacity and Q1 shipments could be up Q/Q, but sees flat Q4/Q1 GM of 17.6% and 17.7%, respectively (lower margin China project mix and declining euro). STP is targeting 450MW of Pluto capacity by mid-2010 including 200MW of new lines, which will add to average conversion efficiency and help offset GM impact of ASPs Finance and M&A Energy Secretary Steven Chu announced $100 million in Recovery Act funding through ARPA-E which will be made available to accelerate innovation in green technology, increase America’s competitiveness and create new jobs. The three areas of focus included in the funding opportunity are: 1. Grid-Scale Rampable Intermittent Dispatchable Storage (GRIDS).   2. Agile Delivery of Electrical Power Technology (ADEPT).  3. Building Energy Efficiency Through Innovative Thermodevices (BEET-IT).  GT Solar International, Inc. (NASDAQ: SOLR) announced a secondary offering of 25 million shares of its common stock by one selling stockholder, who has also granted the underwriters an option to purchase up to an additional 3.75 million shares of common stock to cover over-allotments, if any. UBS Securities LLC and Credit Suisse Securities (USA) LLC are the joint bookrunning managers for the offering, Thomas Weisel Partners LLC is the lead manager and Pacific Crest Securities LLC and Raymond James & Associates, Inc. are the co-managers. Qatar Foundation is setting up a JV plant with SolarWorld to produce 3,500 tons of polysilicon annually.  Qatar Foundation will maintain a 70% stake in the project, Qatar Bank will have a 1% stake, and SolarWorld will maintain the remainder. Research & Reports Energy Efficiency Paying the way: New financing Strategies remove first-cost hurdles Over the past year, there has been a sea change in the public recognition of the importance of energy efficiency (EE) for homeowners, corporate leaders, policy-makers, and investors. There is little or no remaining debate that EE is the most cost effective and rapid strategy to accelerate sustainable buildings, businesses, cities, communities, and public policies. However, while the payback periods can be short and total economic benefits clear, EE improvement projects are often not implemented because of high up-front costs.This paper provides policy-makers, regulators, and private sector firms engaged in the design and implementation of efficiency programs with a series of innovative financing options that can be used to achieve comprehensive energy savings across a broad spectrum of residential, commercial, and industrial market segments. This includes options to augment existing efficiency initiatives at the utility, state, and federal levels by offering energy end-users a set of specific financing solutions that are customized for EE. Further, the detailed description of how efficiency projects are developed in each financing option can provide property owners and decisionmakers at commercial and industrial facilities with a blueprint to implement EE retrofit projects.This paper, the second in a series on EE by CalCEF Innovations, details six existing no-first-cost financing options that enable efficiency projects to be implemented without any initial capital outlay by customers. The financing options highlighted in this paper were selected based upon their ability to: 1) allow a customer to undergo an EE retrofit with no-first-cost, (2) achieve scale by aggregating individual EE projects on either a geographic, financial, or technology basis, (3) be utilized (or replicated) in different geographic areas in the U.S., and (4) demonstrate an innovative financing option that is either emerging or already in existence and is well-positioned to help accelerate the adoption of EE. An emphasis was also placed on financing options that benefit hard-to-reach market segments and end-user groups that currently lack creative financing structures, e.g., residential, small, medium and large commercial and industrial customers, including multi-tenant buildings. 2010-03-03T17:14:00-08:00 http://www.smallcappulse.com/index.php/site/option_trading_strategies_update_first_solar_american_superconductor_a_powe/ http://www.smallcappulse.com/index.php/site/option_trading_strategies_update_first_solar_american_superconductor_a_powe/#When:14:39:00Z March 3, 2010 – Option Strategy Updates – We have been advocates of using options as a way to both hedge against downside risk in the current choppy environment,  as well as a prudent strategy for planning entrance points (at lower levels) for stocks you, or in this case, we, would like to own. In addition, the strategies have also worked out to be pretty solid trades all the way around. Here is our update: ·         American Superconductor (Nasdaq:AMSC) is a company we would love to own at lower prices. It is a leader in growth industries: wind infrastructure, smart grid infrastructure. It operates in a growth market: China.  It is set up to expand into other growth industries and expansive markets: utility scale solar, offshore wind and the U.S., respectively. On February 25, we advocated selling the July 25 puts for $2.45. The stock has since move higher and the puts are up more than 30% as of this morning. ·         First Solar (Nasdaq:FSLR) is a leader in the burgeoning solar industry, whose net income margins are as solid as its competitors’ gross margins in many cases. The company continues to expand capacity and footprint and is the gold standard for a profitable and well-hedged solar business. On February 10, we recommended selling the June 100 puts and on February 18, we recommended locking in a greater-than-50% gain on the put position. Then on February 23, we recommended selling the June 100 puts again, for $12.50. As of this morning, the puts are up about 36%. ·         A-Power (Nasdaq:APWR) is an emerging leader in the wind infrastructure industry and is a leader in the distributed power generation market. It operates in a growth industry and has a demonstrated ability to execute. This is a stock that we are long. On November 25, when the stock was rallying close to $20, we suggested selling out of the money covered calls (March 20s) as a way to hedge downside risk and lower cost average in the stock, for $1.20. Today the calls are up 95%, and set to expire this month, where we will lock in a 100% profit on the position. On January 21, the stock was selling off, and we said we would like to own more of it at a lower price (sub $10), so advocated selling the September 12.50 puts for $2.60, which, if the stock gets put to us, we would be buying it at about $9.90. The put position today is down about 15%, but the stock continues to hold above $13, so at present, it looks like the put position will soon push into positive territory. If it doesn’t, meaning that the stock is trending lower, we are ok with that too because we would like to own more of the stock, below $10. ·         Fuel Tech (Nasdaq:FTEK) is a leader in the pollution controls industry, poised to capitalize if Washington ever gets its act together on emissions regulation, while it is expanding its footprint into the massive opportunity to emissions reduction which is China. On February 2, we said that while we liked the company (for the reasons we just mentioned), we thought the stock could see some further downside as a byproduct of broader market weakness and suggested we would be interested in owning the stock sub-$6. The stock subsequently dropped from the mid-$7 range to the mid-$5 range, and on February 11, suggested selling the September 7.5 puts on FTEK for $2.10. The position is up more than 30% this morning. Keep in mind that with our short put strategy, we don’t go all in on the initial trade, and would not recommend doing so under any investment or trading strategy. As a matter of principal, we don’t take a position in a stock that we would not be happy to own more of at a lower price. So we leave enough powder in our keg to accumulate in the case that our timing was not impeccable. Important Disclosure: This information is intended to assist investors.  The information does not constitute investment advice or an offer to invest or to provide management services and is subject to correction, completion and amendment without notice.  Any such offer, if made, will only be made by means of a confidential prospectus or offering memorandum or management agreement.  It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future results or expectations.  As with all investments, there are associated risks and you could lose money investing.  Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment 2010-03-03T14:39:00-08:00 http://www.smallcappulse.com/index.php/site/nuclear_may_create_jobs_but_at_what_price_working_draft/ http://www.smallcappulse.com/index.php/site/nuclear_may_create_jobs_but_at_what_price_working_draft/#When:13:27:01Z NUCLEAR MAY CREATE JOBS, BUT AT WHAT PRICE?March 2, 2010 – The Obama administration has lost momentum in its efforts to deliver a comprehensive energy plan. Weakened by dividing resources and political capital to focus also on health care reform, and undermined by continued high levels of unemployment (where the renewable energy lobbies lost the jobs argument), President Obama effectively conceded in the State of the Union address that oil drilling, ‘clean coal’ and nuclear projects are back on the table, if only the GOP would please work with him to pass that comprehensive energy legislation. To be sure, an energy bill will pass. But it certainly won’t look like version 1.0, where the focus was clearly on renewable energy and cap-and-trade. Now, as Senator Lindsey Graham suggests, ‘cap-and-trade’ (and accountability for the creation of emissions) is dead. These folks are making the case against regulating emissions because they say the cost would be too high and would result in more lost jobs due to the impact on businesses. Opponents to version 1.0, are chiseling away at budgetary and policy commitments, in some circumstances attempting to redefine renewable energy to include ‘clean coal’ and nuclear energy. While it is true that nuclear power generation emits relatively low amounts of CO2, and nuclear carries other benefits such as being generally readily available and capable of producing large amounts of electrical energy in a single facility, we don’t buy the argument that nuclear in any way falls into the same basket of generation technologies as wind, solar and geothermal. Is Nuclear Energy Cost Effective? We don’t think so. The byproduct of nuclear power generation is nuclear waste, which is radioactive and sticks around for thousands of years. Granted, while the majority of waste comes from the nuclear fuel cycle and nuclear weapons processing, other industries are responsible for it as well, including medical and industrial wastes, as well as other naturally occurring radioactive materials which can be concentrated as a result of the processing or consumption of coal, oil and gas. Our focus is nuclear waste as a byproduct of the nuclear fuel cycle – the progression of nuclear fuel through the front end (preparation of the fuel), service period (fuel usage during reactor operation) and back end (management, containment, reprocessing and disposal of spent nuclear fuel).  Spent fuel which is not processed is an open fuel cycle. Spent fuel which is reprocessed is a closed fuel cycle. In a once-through nuclear cycle: ·         Uranium mining ·         Ore processing ·         Enriching (optional) ·         Fuel production ·         Power reactor ·         Used fuel disposal In the U.S. the plan historically, has been to store this spent fuel in Yucca Mountain, which has had plenty of issues of its own. The Government Accountability Office published a report in November, 2009, that: “High-level nuclear waste--one of the nation's most hazardous substances--is accumulating at 80 sites in 35 states. The United States has generated 70,000 metric tons of nuclear waste and is expected to generate 153,000 metric tons by 2055. The Nuclear Waste Policy Act of 1982, as amended, requires the Department of Energy (DOE) to dispose of the waste in a geologic repository at Yucca Mountain, about 100 miles northwest of Las Vegas, Nevada. However, the repository is more than a decade behind schedule, and the nuclear waste generally remains at the commercial nuclear reactor sites and DOE sites where it was generated.” Adding that: “The Yucca Mountain repository is designed to provide a permanent solution for managing nuclear waste, minimize the uncertainty of future waste safety, and enable DOE to begin fulfilling its legal obligation under the Nuclear Waste Policy Act to take custody of commercial waste, which began in 1998. However, project delays have led to utility lawsuits that DOE estimates are costing taxpayers about $12.3 billion in damages through 2020 and could cost $500 million per year after 2020, though the outcome of pending litigation may affect the government's total liability. Also, the administration has announced plans to terminate Yucca Mountain and seek alternatives. Even if DOE continues the program, it must obtain a Nuclear Regulatory Commission construction and operations license, a process likely to be delayed by budget shortfalls. GAO's analysis of DOE's cost projections found that a repository to dispose of 153,000 metric tons would cost from $41 billion to $67 billion (in 2009 present value) over a 143-year period until the repository is closed. Nuclear power rate payers would pay about 80 percent of these costs, and taxpayers would pay about 20 percent.” Best case scenario, the costs of nuclear energy are real and significant. If the same economics and logistical issues were anticipated of wind, solar or geothermal, folks like Lindsey Graham would be bashing renewable energy as way too high of a price to pay and too burdensome on U.S. businesses and taxpayers alike. But this is nuclear, an industry whose lobbies are near and dear to the hearts of many career politicians at the federal and state levels, who, like Senator McCain, argue that we need to accelerate the plans to develop nuclear, not shelf them. With respect to storage, the GAO offers up alternative schemes: centralized storage and on-site storage. It says centralized storage provides an alternative which could be implemented within 10-30 years, but this is just pushing the issue into the future, providing “more time to consider final disposal options.” And there are further complications, including finding a state “willing to host a facility” which “could be extremely challenging.” Moreover, “centralized storage does not provide for final waste disposal, so much of the waste would be transported twice to reach its final destination.” Then there is the cost issue, where “The cost to store 153,000 metric tons at the end of 100 years range from $15 billion to $29 billion, but increasing to between $23 billion and $81 billion with final disposal.” This hardly smacks of a “green” energy generation scenario. With wind, solar, and geothermal, there are not radioactive spent fuel issues which lead to so significant of challenges as to long-term storage and disposal. There are no NIMBY (“not in my backyard”) issues where states are remiss to host these storage facilities. To be fair, wind turbines and certain solar facilities have run into complaints about the “aesthetics” or “noise” (turbines, not solar and geothermal) relating to their presence, but this is a far cry from concerns about toxicity and health which radioactive waste generate. The GAO also considers an on-site storage scenario, which again, is not a final solution, but “allows time for consideration of final disposal options.” On the positive side, the additional time on-site would theoretically make the waste safer to handle, “reducing risks when waste is transported for final disposal” but this assumes the facility has appropriately safe oversight and storage capabilities, which history has shown to be clearly not always the case. Just in the past couple months here in North America, employees at Chalk River Laboratories have been reportedly exposed to radioactive contamination at the Chalk River NRU reactor, and the Vermont Yankee nuclear power plant has leaked radioactive tritium into the Connecticut River (first detected in the groundwater around the Vermont Yankee facility in November, 2009), and the source of the leak is still unknown.   Consider Hanford, where the Department of Energy is responsible for the treatment and disposal of about 56 million gallons of hazardous waste, stored in 177 underground tanks. The GAO states that “Two decades and several halted efforts later, none of this waste has yet been treated, cleanup costs have grown steadily, and prospective cleanup time frames have lengthened.” The GAO’s assessment of Hanford is worth stating in its entirety: “DOE's tank waste cleanup strategy consists of five key phases--waste characterization, retrieval, pretreatment, treatment, and permanent disposal--but critical uncertainties call into question whether the strategy can succeed as planned. Technical uncertainties include whether DOE can retrieve waste from tanks at the rate needed to support continuous operation of the waste treatment complex now under construction and whether key treatment technologies will work. Legal uncertainties include whether DOE can treat and dispose of some tank waste as other than high-level (highly radioactive) waste and how much residual waste can be left in the tanks when they are eventually closed. Such uncertainties could lead to significant cost increases and further delays in completing Hanford's tank waste cleanup activities. DOE has not systematically evaluated whether its tank waste cleanup strategy is commensurate with risks posed by the wastes. DOE lacks credible or complete estimates of how much the strategy will cost or how long it will take. The total project cost of constructing the waste treatment plant alone grew from $4.3 billion in 2000 to $12.3 billion in 2006. In addition, DOE did not include, or has been unable to quantify, a number of significant costs in its current estimate of the overall cost of its cleanup strategy. For example, DOE has not included some actual expenditures to date or storage costs for high-level waste canisters. Further, DOE's schedule targets have slipped, with end of treatment extending from 2028 to 2047, which increases overall operations costs. Overall the total estimated cost could significantly exceed DOE's current estimate of $77 billion, with estimates ranging from about $86 billion to over $100 billion, depending upon the date cleanup is completed. DOE has also fallen short in terms of risk-informed decision making. While DOE has analyzed risks in environmental impact statements required for its tank waste treatment activities at Hanford, it has not followed a systematic risk assessment framework, like one outlined in a 1983 report, updated in 2008, by the National Academy of Sciences. As a result, DOE cannot be assured that its present strategy is proportional to the reduction in risk that cleanup is to achieve.” The DOE manages more than 56 million gallons of radioactive and hazardous waste stored in 149 single-shell and 28 double-shell underground tanks at its Hanford Site. The GAO reported that many of these aging tanks have already leaked waste into the soil, and that the DOE’s planned process to deal with emptying the tanks and treating the waste has hit delays and lengthened the process – exacerbating concerns about the tanks’ viability during a long term cleanup process. This is one site. This is one site whose costs of cleaning up could run as high as $100 billion, and out to 2047! On its website, Hanford points out that it employs 11,000 or so workers (involved with the environmental cleanup), so, from a job creation perspective, advocates can fairly argue that the nuclear industry does drive labor. Wind, solar and geothermal projects don’t require this kind of manpower, so it is not hard to understand where the renewable energy lobbies struggle winning the jobs debate. But the cost is heavy indeed. Policy favoring commercially unfavorable products at economically unfavorable costs is just bad policy – even if it creates jobs. It took several years, but Congress finally developed the stomach and sensibility to cut the F22 program. It created jobs, but it was economically irresponsible, especially for a country with a damaged balance sheet. Another key point, with respect to Hanford, is that its reactors were used for producing plutonium for America’s defense program and this was not a facility whose mandate was energy production. The N-reactor, which did feed the grid via the Washington Public Power Supply System, was operational until 1987. The overrun on expenses to cleaning up nuclear waste sites is not isolated to Hanford either. The GAO  reported that, having assessed 10 nuclear waste clean-up projects, 9 out of 10 had life cycle baseline cost increases ranging from $139 million to as high as $9 billion, with delays from 2 to 15 years. The GAO said “these changes occurred primarily because the baselines we reviewed included schedule assumptions that were not lined to technical or budget realities, and the scope of work included other assumptions that did not prove true.” This lack of ability to establish “true” assumptions when planning nuclear projects is systemic. And time and again, the DOE simply just revises its baseline, adds years and increases budgets. The GOA said recently that the “DOE has not effectively used management tools – including independent project baseline reviews, performance information systems, guidance, and performance goals – to help oversee major cleanup projects’ scope of work, costs and schedule.” If this isn’t an indictment on the DOE’s handling of budgetary and scoping processes I don’t know what is. Removing waste from onsite tanks is a massive challenge and a significant expense. It is worth considering whether advocates of expanding  nuclear energy in the U.S. should be pricing in clean-up costs into the levelized cost of nuclear energy, and whether, when they do so, nuclear energy is really so competitive from a cost/kWh perspective. This essay is not an argument against storage. It just turns out that there are substantial challenges to safe storage. There are several issues here. For example, according to the National Regulatory Commission (NRC) there were 125 fires at nuclear sites from 1995 to 2007, of which the NRC classified them all of being limited safety significance. But in a June, 2008 document, the GAO reported that the NRC had not resolved several issues that affect the nuclear industry’s compliance with existing NRC fire regulations, and it lacks a comprehensive database on the status of compliance. To be fair, the NRC has responded at this point, posting a backgrounder on its fire protection policy on its website. The GAO was recently asked to assess the safety issues at a Savannah River Site (SRS) facility known as H-Canyon, and to determine whether SRS’s radioactive waste storage tanks and associated nuclear waste facilities are capable of handling additional waste generated by H-Canyon, as well as to describe H-Canyon’s compliance with safety and environmental requirements. Unsurprisingly, the GAO concluded that the DOE’s cost estimates for processing enriched uranium at H-Canyon were incomplete, leaving out costs of storing and treating the waste, and critical enhancements to the new facilities that would be needed to store additional waste. Cause for Concern?   The Union of Concerned Scientists published a report making several “common-sense” recommendations to the nuclear industry, arguing that if these recommendations are not adopted, building a new fleet of nuclear power plants will create serious safety and security risks. Amongst the findings and recommendations were that:   ·         Safety problems remain despite a lack of serious accidents. ·         The most significant barrier to consistently effective NRC oversight is a poor “safety culture” at the agency itself. ·         The NRC’s policy on the safety of new reactors is an obstacle to ensuring better designs. ·         The NRC’s budget is inadequate. ·         The Price-Anderson Act lessens incentives to improve safety. ·         Spent fuel pools are highly vulnerable to terrorist attack. ·         The NRC gives less consideration to attacks and deliberate acts of sabotage than it does to accidents. ·         NRC assumptions about potential attackers are unrealistically modest. ·         Sabotage of a nuclear reactor could result in a large release of radiation. ·         There is no assurance that reactors can be defended against terrorist attacks. ·         An expansion of nuclear power could—but need not—make it more likely that more nations will acquire nuclear weapons. In any event, it is only one factor of many that will affect this outcome. ·         The nuclear facilities that present the greatest proliferation risk are those that can be used to produce the materials needed to make nuclear weapons— plutonium and highly enriched uranium (HEU). ·         An expansion of nuclear power could—but need not—make it more likely that terrorists will acquire nuclear weapons. ·         None of the proposed new reprocessing technologies would provide meaningful protection against nuclear terrorism or proliferation. ·         Strict international controls on uranium enrichment facilities will be needed to minimize the proliferation risks associated with expanded nuclear power. ·         A permanent geologic repository is the preferred method for disposal of nuclear waste. ·         Reprocessing offers no advantages for nuclear waste disposal. ·         There is no immediate need to begin operating a permanent repository. ·         Of all the new reactor designs, only one—the Evolutionary Power Reactor (EPR)—appears to have the potential to be significantly less vulnerable to severe accidents than today’s reactors. ·         Of all the new reactor designs, only one—the EPR—appears to have the potential to be significantly less vulnerable to attack than today’s reactors. ·         No technical fix—such as those incorporated in new reprocessing technologies—can remove the proliferation risks associated with nuclear fuel cycles that include reprocessing and the use of plutonium based fuel. ·         The proposed GNEP system of fast burner reactors will not result in more efficient use of waste repositories.  It is important to note that the Union of Concerned Scientists is not anti-nuclear. It is just pro-responsibility and pro-accountability. David Lochbaum, director of the Nuclear Safety Project for the Union of Concerned Scientists says that the UCS is neutral on the technology, but that nuclear power plants need to be operated more safely. As far as we can tell, the government hasn’t pursued, and doesn’t intend to pursue the Union of Concerned Scientists recommendations to address these issues, concerns and risks.   Cost Comparison Lazard reports that the levelized cost of PV solar at $4/watt system installed is about $90/MWh. The levelized cost of thin film solar at $2.75/watt system installed is about $79/MWh. The levelized cost of wind is currently about $44/MWh to $91/MWh. The levelized cost of geothermal is currently at about $42/MWh to $69/MWh. Contrast these levelized costs with the levelized cost of nuclear which is about $98/MWh to $126/MWh, not including cost overruns which are rampant in nuclear plant development. This also doesn’t factor in costs related to storage, processing and disposal of nuclear waste, which, according to the GAO estimates above, run from $139 million to $9 billion.   At $4/watt, capital costs per/MW of PV solar is $4 million, at $2.75/watt, capital costs per/MW of thin-film run about $2.75 million, wind runs about $1.9 million to $2.5 million/MW, and geothermal runs about $3 million to $4 million/MW. Meanwhile, nuclear runs about $5.7 million to $7.5 million/MW. Again, factor in an additional $139 million to $9 billion for storage, processing and disposal of nuclear waste.   Some recent examples of nuclear plants and cost overruns:   ·         In the United States, Florida and Georgia have changed state laws to raise electricity rates so that consumers will foot some of the bill for new nuclear plants in advance, before construction even begins.Customers of Georgia Power, a subsidiary of the Southern Co., will pay on average $1.30 a month more in 2011, rising to $9.10 by 2017, to help pay for two reactors expected to go online in 2016 or later ·         In Finland, which was touted as undertaking a nuclear revival, a nuclear reactor (supposed to generate about 1,600MW) being built by France’s Areva has seen costs run from €3 billion to about €4.2 billion, after four years of construction and thousands of defects and deficiencies. Areva has acknowledged that the cost of a new reactor today would be as much as €6 billion, double the price offered to Finland. ·         In Flamanville, France, a clone of the Finnish reactor now under construction is also behind schedule and overbudget. ·         And of the 45 reactors being built around the world, 22 have encountered construction delays, according to an analysis prepared this year for the German government by Mycle Schneider, an energy analyst and a critic of the nuclear industry.  Is Nuclear Green, or Sustainable?   In terms of its carbon footprint, the Energy Information Administration says “nuclear emits no carbon dioxide (CO2) or other greenhouse gases.” While a nuclear power plant, by itself, produces little, if any, CO2, the plant is an integral part of the nuclear fuel cycle that is designed to produce electricity. Energy from burning fossil fuels, thus releasing CO2, is needed throughout the cycle to mine, mill and enrich uranium, fabricate fuel elements and manufacture cement and steel for plant construction. Disposition of nuclear wastes and plant decommissioning are additional parts of the cycle that involve fossil fuel energy.  In addition, it is difficult to be compelled by an argument that nuclear is a clean and renewable energy when the byproduct, or waste is a radioactive material, toxic and lethal to humanity, which remains radioactive. The United States has more than 100 sites designated as areas that are contaminated and unusable, sometimes many thousands of acres. Consider two long-lived fission products, Tc-99 (half-life 220,000 years) and I-129 (half-life 17 million years), which dominate spent fuel radioactivity after a few thousand years, and transuranic elements in spent fuel, Np-237 (half-life two million years) and Pu-239 (half life 24,000 years), and ask again, is nuclear energy really green and sustainable? Conclusion The only redeeming aspects of nuclear energy seem to be the fact that it is a job creator, and, while it is in generation mode (excepting other processes in the cycle which clearly carry their own carbon footprints mentioned above), it is  carbon free. The downside is that it is more expensive, poorly regulated, poses security risks on several fronts, and it produces toxic radioactive waste which lasts thousands, and even millions of years. Nevertheless, support for nuclear is having a renaissance in Obama’s sophomore year amidst advocates who focus solely on the issues of job creation and lazily support their thesis of support with a quip that it is carbon free. But choosing a more expensive and riskier technology as a means of creating jobs just doesn’t smack of prudent decision making.   Appendix Recent nuclear leaks and spills (a few examples): ·         February 2010 -  A Dutch reactor. The drums contained items used for nuclear research in the 1960s such as bolts, tools and samples. Some of these items were made of PVC. Under the influence of radiation a chemical reaction can cause the PVC to damage the steel of the drums. During the past two months, the owner of the nuclear facility, NRG, tried to repackage the drums into safer containers. During the repackaging, NRG discovered that two drums had broken and were leaking radiation.The company has temporarily ceased the repackaging activities and sealed the storage tube that holds the broken drums. They are currently looking into a safer way of repackaging them.NRG is confident that the leaks were of such a small magnitude that neither their employees nor anyone else in the surrounding area has been adversely affected. ·         January 2010 - Nuclear Regulatory Commission is sending inspectors to Vermont Yankee (provides a third of Vermont’s energy) to check Entergy's progress in tracing the source of small tritium leaks into groundwater and into an on-site trench.Entergy found tritium in a groundwater monitoring well. Some measures exceed EPA standards for the hydrogen isotope, which is formed during nuclear reactions. ·         May 2009 - Thousands of litres of radioactive waste have accidentally leaked into the Firth of Clyde from the Hunterston (operator is British Energy, owned by EDF) nuclear power station in breach of pollution law,The station has been accused by the government watchdog, the Scottish Environment Protection Agency (Sepa), of breaking six legal promises it made to prevent people and the environment from being contaminated by radioactivity. Sepa says it is “deeply concerned” about the leak. The Hunterston B advanced gas-cooled reactor plant in North Ayrshire has one of the worst records for safety incidents of any UK nuclear power station. According to government figures, it has now recorded 24 fires and leaks since 2001. ·         May 2009 - Radioactive waste has leaked from Britain's nuclear submarines nine times in the past 12 years, the Ministry of Defence (MoD) has admitted. Two of the leaks – including one at Devonport near Plymouth two months ago – had not been revealed until today. The Guardian reported a series of safety breaches at the Royal Navy's nuclear submarine base at Faslane near Glasgow. Documents released to Channel Four News under freedom of information legislation disclosed three leaks of radioactivity from nuclear submarines into the Firth of Clyde in 2004, 2007 and 2008.A further four leaks have been previously reported: two at Devonport in 2005 and 2008 and two at sea in 1997 and 2000. Now the MoD has told the Guardian about another two inadvertent releases of radioactivity, both of which were hitherto unknown. ·         February 2009 - Nuclear power company, Magnox Electric, was fined 250,000 with costs of 150,000 after allowing radioactive effluent to seep into the ground for over 14 years. It is one of the largest penalties ever to result from an Environment Agency prosecution. ·         July 2008 - Confirmation that radioactive brine has been leaking for two decades from a German underground deposit for nuclear waste is yet another blow to the idea that nuclear power can safely increase electricity generation and simultaneously reduce emissions. Radioactive leaks from the nuclear waste deposit Asse II near Braunschweig in Lower Saxony, some 225 km southwest of Berlin, were first discovered in 1988. The state-owned Helmholtz Institute for Scientific Research, which operates the centre, officially admitted the leaks only Jun. 16, under pressure from the German press. ·         July 2008 - Nuclear authorities in France were scrambling to calm fears following a radioactive leak from a nuclear waste processing facility near the town of Bollène, in the Rhône valley. Officials immediately enforced an emergency contingency plan in three villages surrounding the plant. A ban was placed on drinking water from private wells, swimming in rivers and irrigating fields. Eating fish caught in rivers has also been outlawed. Initial reports from Socatri, the company that operates the plant, said that 30 cubic metres of fluid containing 12g per litre of low-grade uranium were spilt at the Tricastin facility near Marseilles. Socatri later said that only six cubic metres, or 75kg, had actually escaped from the site, which decontaminates waste from a uranium enrichment centre. The incident was the result of "a faulty container", according to initial reports from the Institute of Radioprotection and Nuclear Safety (IRSN). The liquid soaked into the ground and then passed into rainwater drains. The spill is 100 times the permitted annual quantity of radioactive effluent from the site. ·         Every year more of the particles, some of which are potentially lethal, are found, and yet the exact source of the contamination remains uncertain. Fishing within a two-kilometre radius of Dounreay's waste pipe has been banned since 1997 In 2007, more than forty years after the contamination first started, Dounreay admitted guilt, and was fined £140,000 in Wick Sheriff Court. The release of the particles was “deeply regretted” by the site’s operator, the UK Atomic Energy Authority. ·         July 2007 - Hanford nuclear reservation More than 210 million litres of radioactive and chemical waste are stored in 177 underground tanks at Hanford in Washington State. Most are over 50 years old. Already 67 of the tanks have failed, leaking almost 4 million litres of waste into the ground. There are now "serious questions about the tanks' long-term viability," says a Government Accountability Office report, which strongly criticises the US Department of Energy for delaying an $8 billion programme to empty the tanks and treat the waste. The DoE says the clean-up is "technically challenging" and argues that it is making progress in such a way as to protect human health and the environment. ·         August 2006 - Radioactive, cancer-causing tritium has leaked into the groundwater beneath the San Onofre nuclear power plant, prompting the closure of one drinking-water well in southern Orange County, authorities said. Officials have not found evidence that the leak from the San Onofre Nuclear Generating Station, California's largest, has contaminated the drinking water supply. ·         In 2005 the Sunday Herald revealed that Dounreay had suffered 250 safety “failures” over the previous six years. They included the radioactive contamination of whelks, winkles, rabbits, concrete, soil, water, air and beaches. ·         Scotland’s oldest nuclear plant, at Chapelcross near Annan in Dumfries and Galloway, has run into problems being decommissioned. A report from the NII in April this year revealed that the defuelling of a defunct reactor had to be halted after a fuel rod got stuck.  More than a hundred radioactive particles from a 50-year-old waste pipe from Chapelcross have also contaminated part of the Solway Firth. The plant was closed down in 2004. 2010-03-02T13:27:01-08:00