Aspire Week in Review - Week Ended November 21, 2008

Nov 21, 2008
Author: Administrator

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This week WWEA Secretary General Stefan Gsänger criticized last week's report from the International Energy Agency which projects non-hydro renewable energy to contribute only about 4% to global electricity supply by 2030. Gsänger called into question the underlying assumption of the IEA that renewable energy contribution will growth at a 7.2% rate, and said that the overly conservative growth estimate may in fact become a "self-fulfilling prophecy" amongst legislators making key decisions concerning support for renewable energy by dumbing down expectations.

Expectations remain bullish amongst CEOs, however. This week at the Wall Street Journal's first annual CEO Council more than 100 CEOs and member of Congress, concluded, amongst other things that the administration and new Congress should accomplish the following:

• FISCAL STIMULUS through investment in infrastructure, including environmental and low-carbon energy;
• COMPREHENSIVE ENERGY/ENVIRO POLICY: Put national legislation in place that starts us on the road to decarbonize our economy and to create the most energy-efficient economy in the world. Level with  the American people that ensuring an adequate and diverse energy supply in a low-carbon world will not be cheap and easy. But the transition must be transparent and fair to all Americans. This recognizes that linking the economy, the environment and energy policy bolsters security for all three.
• ELECTRIC CARS: Aim for electric cars to represent 10% of total car sales in 2020 and up to 50% in 2030. Provide long-term federal financing to facilitate the transition. Technological priorities improving battery technology and developing lighter-weight materials.
• DECARBONIZE POWER SECTOR: A coordinated strategy to curb emissions from electricity production. For renewables, federal eminent domain to site transmission lines, and federal spending to improve energy-storage technology. For coal, to promote carbon capture and sequestration, boost federal R&D spending and streamline licensing and siting of storage facilities. For nuclear, resolve storage issues. Create a cap-and-trade system.
• ENERGY EFFICIENCY: Change regulations to allow utilities to capitalize investments in energy efficiency rather than just adding generation capacity. Increase consumer incentives for purchasing energy-efficient technology. Create a federal building-efficiency code. Toughen federal appliance-efficiency standards.

Meanwhile, President-elect Obama spoke at the Governor's Global Climate Summit to government leaders throughout the world affirming that "The United States will once again engage vigorously in [global climate] change negotiations, and help lead the world toward a new era of global cooperation on climate change."

Headlines of Fear and Loathing

Selling accelerated into renewable and clean tech stocks this week indiscriminately, exposing what appears to be a no-tolerance attitude for risk, regardless of how much risk has been priced into these stocks to date. Granted, there are companies in every sector which are more exposed to others to the tightening credit and financial markets, and the global recessionary environment will undoubtedly have a negative impact on plans for projects and expansions, but even companies reporting solid results and affirming relative strength on their balance sheets were sold off. Here is an example of headlines that we saw in the solar sector which reflect the fear and loathing in the markets:

• "ReneSola Reveals Solar Rot" (Motley Fool - referring to customers reneging on purchase contracts)
• "First Solar's Star Dimmer Than Ever" (The Street.com - referring to slower year-over-year growth of "only 67.5%", the implications of the dollar's rally against the euro on its balance sheet, and the broader macro-economic environment in Europe which may drag on the company's performance)
• "Solar Industry Bursts into Flames" (Motley Fool - we have to mention the author's name, Rich Smith, because we will want to pin a bumper sticker to his forehead at some future point. Smith led his article with the line "solar is so over." Really? Smith pointed to SolarWorld's interest in wading into the green auto business as evidence.) 
• "LDK Solar's Outlook Too Warm and Fuzzy" and "Street Dulls LDK Solar's Shine" (Forbes.com - both basically the same version of the same article after LDK reported Q3 results beating estimates, raised guidance where the author wrote that it is just too upbeat in the current environment and therefore not believable."

To be sure, there are issues facing solar including expectations for slowing consumer demand in the downstream channel, module oversupply in the upstream channel and commoditization of poly upstream - all of which will result in margin pressure, slowing growth or both. Some solar companies have faltered, some are adjusting guidance to manage expectations, and some continue to outperform. Regardless, they have all been thrown into the same basket by writers like Gutierrez over at Forbes, and too many pundits and analysts.

There are still plenty of drivers for solar, and it is anything but dead. France has increased its targets for solar dramatically from 50MW in 2007 to 3,000MW by 2020. Japan is setting to launch a new set of subsidies to meet higher targets. The U.S. Congress recently renewed the solar tax credit for an additional eight year period and eliminated caps. On a broader level, we have 31 states in the U.S. maintaining renewable portfolio standards. California, which is one of the largest solar regions in the world, is setting to increase its commitment to renewables from 20% to 33% by 2020. Expectations are widely that the Obama administration is going to pass a Federal RPS. The EU has recently increased its commitment to renewables. We could go on, but these legislative drivers alone will stabilize the growth for solar and ensure, contrary to Mssr. Smith, that solar is not dead.

And lowering prices in poly and modules isn't a bad thing either. Prices get lower, the technology becomes more favorable with the consumer - and the subsidies don't have to play such a big role. We saw this happen in Brazil with ethanol. It will happen here with solar, and around the world. Moreover, efficiency advances with solar will help compensate for declining prices.

All we can say about the reaction in some of the media to solar, and specifically from guys like Gutierrez and Smith is that they are knee-jerk reactions and commentaries and we will look forward to pinning these commentaries back on their foreheads year after year as solar's  contribution to the global energy pie expands. In the meanwhile, take advantage of the weakness, and there is a once-in-a-lifetime opportunity, in our opinion, to buy the next ten years of growth in energy at book value today.

Another Coalition Founded to Support Clean Energy

Nike, Starbucks, Levi Strauss, Sun Microsystems, Timberland and Ceres announced the founding of Business for Innovative Climate and Energy Policy (BICEP) calling for stronger U.S. climate and energy legislation in early 2009. BICEP's founding principles are:

• Set greenhouse gas reduction targets to at least 25% below 1990 levels by 2020 and 80% below 1990 levels by 2050;
• Establish an economy-wide GHG cap-and-trade system that auctions 100% of carbon pollution allowances, promotes energy efficiency and accelerates clean energy technologies; 
• Establish aggressive energy efficiency policies to achieve at least a doubling of our historic rate of energy efficiency improvement; 
• Encourage transportation for a clean energy economy by promoting fuel-efficient vehicles, plug-in electric hybrids, low-carbon fuels, and transit-oriented development; 
• Increase investment in energy efficiency, renewables and carbon capture and storage technologies while eliminating subsidies for fossil-fuel industries; 
• Stimulate job growth through investment in climate-based solutions, especially "green-collar" jobs in low-income communities and others vulnerable to climate change's economic impact; 
• Adopt a national renewable portfolio standard requiring 20% of electricity to be generated from renewable energy sources by 2020, and 30% by 2030; and 
• Limit construction of new coal-fired power plants to those that capture and store carbon emissions, create incentives for carbon capture technology on new and existing plants, and phase-out existing coal-based power plants that do not capture and store carbon by 2030.

Biofuels and Biomass

A 45 million gallon biofuel plant in Danville, which was funded by the Illinois Department of Commerce and Economic Opportunity and the state went operational this week.  The plant will be managed by Renewable Energy Group, and it will begin selling the biodiesel by the end of December.

Coral Gables, Florida hosted the Third Annual Cellulosic Ethanol Summit this week. Its Commissioner of Agriculture, Charles Bronson, said he wants the state to become the leader in cellulosic ethanol production. And at the Governor's Climate Summit in Beverly Hills, California, Solazyme featured its SoladieselRD(tm) algae-based renewable diesel.

Dyadic International (Pink Sheets:DYAI) signed a $10 million deal to license its bio-manufacturing technology to Codexis for research into biofuels and other applications.

Green Plains Renewable Energy (Nasdaq:GPRE) announced a joint venture aimed at extending its reach into next generation biofuels, targeting algae production, with BioProcess Algae LLC, CLARCOR, Inc. (NYSE:CLC), BioProcess H20 LLC and NTR plc.

Pepco Energy Services opened a 5MW landfill gas powered energy plant today.  And Progress Energy Florida signed an agreement with New Generation Biofuels (Nasdaq:NGBF) to evaluate New Generation's biofuel technology in utility boiler applications.

Siemens Energy & Automation and the USDA's Agricultural Research Services signed a Cooperative Research and Development  Agreement to improve processes used to convert second generation, non-food based biofuel feedstocks.

US Sugar Corp. entered into an agreement with Coskata to develop a 100 million gallon-per-year cellulosic facility in Clewiston, Florida that would convert left-over sugar cane material into ethanol. The plant would be the second largest '2nd generation' ethanol facility in the world.

The New York Stock Exchange announced today that it will remove "the entire class of common stock of VeraSun Energy Corp." from listing and registration on the exchange at the opening of business Dec. 1.

Brazil

President Lula said today at a conference in Sao Paulo that tariffs against biofuels are protectionist. Meanwhile, U.S. agriculture secretary Ed Schafer and Brazil's foreign minister Celso Amorim announced an agreement of collaboration between the two countries to speed up cellulosic ethanol research, and the efforts will be led by the U.S. National Renewable Energy Lab (NREL) and

Petrobras' Center for Research and Development (CENPES).

Comanche Clean Energy brought its Canitar ethanol facility online, which has 100 million liters of capacity and is the most modern facility in Brazil. Management expects to experience a gain in industrial efficiency relative to Brazilian peer group averages of about 4%.

Earnings

Pacific Ethanol (Nasdaq:PEIX) reported Q3 revenues of $183.9 million, an increase from $118.1 million in the same quarter last year, with negative gross profit of $20.2 million, compared with gross profit of $4.7 million last year. Net loss was $69.9 million, or $1.23 per share, compared with a net loss of $5.8 million, or $0.15 per share last year.

Clean Technology, Carbon Reduction and Energy Recovery

The British government sold 4 million 2008 EU carbon emissions permits this week at €16.15 per ton. This was the UK's first auction of allowances to emit greenhouse gases (GHGs), and it raised €64.6 million ($81.55) for the British Treasury. It plans to auction another 25 million EU allowances next year.

And legislators are considering allowing energy and manufacturing companies to import 11% more emission credits through 2020 to lower the cost of stricter domestic caps on pollution.

Heat2power won the Powertrain Innovation of the Year Award at the Professional Motorsport World Expo with its Thermal Energy Recovery System which it says provides fuel savings of 15 to 35% under any driving condition.

Masdar of Abu Dhabi awarded Mustang Engineering with a design contract for its carbon capture and storage project, which is in the first phase. The first phase is expected to capture five million tons of CO2 by the end of 2013.

Electric Vehicles, PHEVs and Hybrids

Shai Agassi's Project Better Place got support this week from Mayors of San Francisco, San Jose and Oakland, amongst others, announcing a plan to work with PBP to get electric vehicles (EVs) on the road by 2012. Agassi said the infrastructure to support the cars with charging stations would cost about $1 billion, with a quarter of that needed for the 2010-2011 test phase.

The BMW group began accepting lease applications this week for 450 of its Mini E electric cars from consumers in California, New York and New Jersey. The car runs on a lithium-ion battery which gets about 150 miles per charge, and takes about four and a half hours to charge. 

RTEV and Shuanghuan Automobile Company have formed a partnership to develop and market electric cars worldwide. The first EV will be a two-seat compact car launched in the U.S. in mid-2009. It will be marketed by RTEV on an exclusive basis under the Wheego Whip brand in the U.S., and by Shuanghuan Automobile Company as the Electric Noble in the rest of the world. The car will be able to reach 60 mph and will be launched with different specifications based on the country safety requirements. It is being launched a s a low-speed vehicle in the U.S. (at 25mph max) until it passes U.S. safety requirements. It will have a 50 mile-per-charge range.

SolarWorld (SWV.DE) said that it is going to offer GM €250 million ($350 million) in cash and €750 million ($945 million) in credit lines for four production facilities and Opel's Ruesselsheim development center and headquarters. It intends to make enter the "green" auto industry. The deal is contingent on GM completely exiting.

Energy Management, Energy Efficiency, Demand Response and the Smart Grid

The U.S. Green Building Council (USGBC) said LEED 2009 passed member ballot last week and will take effect in 2009. The new rating system will be re-weighing credits to emphasize climate change and energy efficiency as critical priorities.

And a report from Boston Consulting Group and the Climate Group said that properly deployed information and communications technology could cut U.S.-based CO2 emissions by as much as 22% by 2020, saving the country up to $240 billion in gross energy and fuel costs.

The European Commission published a voluntary code of conduct for running an energy efficient data center, which, if followed, could reduce energy consumption by up to 20%. Last year, data centers in Europe consumed 56TWh of electricity, which is about 2% of the global total, and without any action to reduce consumption could escalate to 104TWh by 2020.

GainSpan and Grid Net announced a collaboration to develop Smart Grid home area networks (HANs). The collaboration will develop standards-based Smart Grid networking enabling utilities deploying Advanced Metering Infrastructure solutions based on Grid Net's PolicyNet NMS.

Orion Energy (Nasdaq:OESX) said is integrated energy management system is being implemented at a PepsiCo foods group facility in Brazil, and also that six companies have entered into Orion Virtual Power Plant(tm) energy supply agreements with it, including Great Plains Coca Cola, Fiber-Tech, Guy & O'neil, Aspen Distribution Velvac and ETW.  These companies are purchasing 'negawatts' from Orion which will be used to pay for the implementation of its technology.

Energy Storage

Altair Nano (Nasdaq:ALTI) said it is receiving additional funding for a 2.5MW stationary supply program for the navy, and also that its 1MW, 250kWh battery storage system has met storage system met requirements to participate in the PJM Regional Transmission Organization control area. It said this is the first commercial acceptance of an advanced Lithium-Titanate battery to provide grid regulation services in the US. Altair is jointly developing this grid-scale energy storage application with AES Energy Storage, LLC.

Enery1 (AMEX:HEV) signed an MOU with Kyushu Electric Power to collaborate and manufacture rapid recharging systems for electronic vehicles, customizing KEPCO's solution with the EnerDel High Energy Pack System. The systems will enable customers to recharge up to 80% of the EV's battery capacity in less than 20 minutes. The companies hope to have the systems available by March, 2009.

Plug Power (Nasdaq:PLUG) is partnering with National Grid and the DOE to conduct a field trial for its new micro CHP (combined heat and power) GenSys(r) fuel cell system, which will provide electricity and heat to a National Grid customer in NY state. The system can reduce home energy costs by 20% to 40% and reduces home carbon emissions by up to 35%.

Valence Technology (Nasdaq:VLNC) signed a supply agreement with Brammo, Inc. to provide lithium phosphate batteries for installation in Brammo's Enertia all-electric motorcycle. Brammo's Enertia exceeds 50 mph and 45 miles on a 3-hour charge, at about $0.40 cents per mile.

Geothermal

Mighty River opened the 100MW Kawerau geothermal power station in New Zealand. The facility cost $300 million to construct.

Hydro

Brazil water and environmental regulators have approved an initial environmental license for construction of the 3,300-MW Jirau hydroelectric project, planned for the Madeira River in Brazil's Amazon Region.

Alter Energy Group AG of Switzerland has signed a letter of intent to invest 91 million euros (US$114.2 million) to build and own five hydroelectric projects in the Ukraine totaling 75 MW.

Hydro developer Satluj Jal Vidyut Nigam Ltd. is inviting expressions of interest in construction of the 775-MW Luhri hydroelectric project on the Satluj River in India's Himachal Pradesh State. The hydro development agency of India's Uttarakhand State has awarded a US$3.4 million contract to SMEC International Pty Ltd. of Australia to build and equip four small hydroelectric projects and perform transmission system expansion work. India developer Tehri Hydro Development Corp. Ltd. is seeking bids for a feasibility study of marketing carbon emissions reductions for the three-project, 2,400-MW Tehri hydropower complex.

Macedonia's Ministry of Economy invites applications for pre-qualification for concessions to develop 12 hydropower projects on the Vardar River totaling 308.24 MW.

Thailand and South Korea companies have signed a project development agreement with the Laotian government advancing the 390-MW Xe Pian Xe Namnoy hydroelectric project in the Xe Kong River Valley of Laos.

The World Bank is considering a proposal to provide US$330 million in financing for construction of the 250-MW Trung Son hydroelectric project on Vietnam's Ma River.

Ocean Power

Hawaii's Governor Linda Lingle announced plans to develop a 10MW ocean thermal energy conversion pilot plant in Hawaii. Electricity will be generated from the difference of temperature at various depths of the ocean. Taiwan Industrial Technology Research Institute and Lockheed Martin Corporation are building the initial pilot plant.

Solar

Last weekend the Institute of Electrical Engineering under the Chinese Academy of Sciences and the U.S. National Renewable Energy Laboratory signed an MOU to share research on PV generation technologies.

Upstream

Hoku (Nasdaq:HOKU) signed an HCI supply agreement with BHS Acquisitions which it says secures its key starting material to operation its plant into 2010. BHS will supply Hoku with guaranteed amounts of HCI for eight years beginning in 2009, which is expected to be enough to enable the production of about 4,000MT of polysilicon per year.

PV Crystalox said wafer shipment volume for 2008 will be in a range of 225 to 230MW, slightly higher than previous guidance of 220 to 225MW. Management indicated demand continues to be strong with shipments continuing as scheduled and 95% of its expected 2009 production has been secured with long-term contracts. It also said construction of its new 1800MT poly facility in German will be completed by 2008, with production commencing in April, 2009. Production for 2009 is targeted at 900MT.

Midstream

BP Solar and Wind said it is shutting down its 50MW Sydney, Australia production plant to cut costs. The company cited the trend that amongst the industry to increase capacity to a GW of capacity, and greater, acknowledging that its Sydney plant is small in comparison. Moreover, logistical challenges due to the plants' location and shipping in raw materials created an economic model that didn't make sense in an increasingly commoditizing industry. The production cut will leave BP with 250MW in solar manufacturing capacity.

JA Solar (Nasdaq:JASO) said it is going to partner with BP to contribute manufacturing and access to wafers, which makes sense in light of BP's decision to pull back from its manufacturing facility in Australia. BP also purchases wafers from LDK.

MEMC (NYSE:WFR) said its Q4 revenue will come in significantly below guidance, citing deteriorating economic conditions. It now expects revenue to come in a range of $475 to $525 million, compared with the previous guidance of $540 to $600 million.

Solyndra signed a long-term sales contract with Carlisle Energy Services to supply its cylindrical-tube-based CIGS solar panels for rooftop applications in a deal worth up to $320 million, bringing its order backlog to more than $1.5 billion.

Suzlon (SUZLON.NS) said it is considering extending its business into the solar markets, citing the Indian sector as an enormous opportunity. It has identified locations in Gujarat and Rajasthan as potential sites for solar plants. Suzlon's existing wind backlog consists of about 2,500MW.

Downstream

Carmanah Tech (TSX:CHM) announced a $700k  order to supply solar-powered portable airfield lights for Bariven S.A., in Venezuela.

A 185kw SunPower designed rooftop system was dedicated at the San Jose Tech Museum  (SJTM) this week. SJTM is buying electricity for the facility from Helio Micro Utility's Green Energy Community Investment Fund which Helio jointly owns with Citi Community Capital. The Fund will also own the associated renewable energy credits.

Emcore (Nasdaq:EMKR) announced its first deployment of a 50kw (test and evaluation) concentrator PV (CPV) system in China with the XinAo Group. The companies are in discussions regarding potential construction of a joint-owned plant in China to build CPV systems designed for its coal gasification project and the Chinese market.

Satcon (Nasdaq:SATC) entered a three-year 180MW agreement with Samsung C&T Corporation to supply it with its PowerGate(tm) Plus inverters. It has also provided Samsung the exclusive right to market and sell its solutions in the Korean energy market.

Earnings

Canadian Solar (Nasdaq:CSIQ) reported Q3 revenues of $252.4 million, up 160% Y/Y and up 18.7% Q/Q with gross margin of 15.5% Net income was $11.1 million, or $0.31 per diluted share compared to $0.5 million, or $0.02 per diluted share last year. Management guidance for FY08 is in a range of $650 to $750 million in revenue, and it is guiding down Q4 expectations for shipments, margins and earnings. It expects Q4 shipments of about 20 to 25MW which will result in revenues of about $70 to $85 million. It conditionally re-iterated 2009 shipment and margin guidance of 500 to 550MW with margins of 13% to 15%. It said it expects delays in capacity expansion pending more visibility on the economic environment.

LDK Solar (NYSE:LDK) reported Q3 revenues of $541.8 million, an increase of 241.4% Y/Y and net income of $88.4 million, or $0.77 per diluted ADS - $0.06 better than estimates. Management issued upside guidance for Q4 of revenues in a range of $555 to $565 million and upside guidance for FY09 of revenues of $2.9 to $3.1 billion with improving gross margin.

Suntech (NYSE:STP) reported Q3 revenues of $594.4 million, a 53.7% Y/Y increase with gross margin of 21.6% and net income of $55.9 million, or $0.33 per diluted ADS. PV cell production capacity was 750MW at the end of Q3. Management revised FY08 revenue guidance down to a range of $1.85 to $1.87 billion, citing depreciation of the euro against the dollar. It also revised FY08 PV product shipment down to about 490MW from 550MW.

Trina Solar (NYSE:TSL) reported Q3 revenues of $290.7 million, up 252.1% Y/Y and 42.4% sequentially. Gross margin was 22.4% and net income was $32.1 million, compared to $7.8 million in the prior year period. Earnings per fully diluted ADS were $1.17. Solar module shipments were 66.36MW , up 213.7% Y/Y. Management said it expects to ship between 55MW and 60MW of PV modules in Q4 with revenues in the range of $190 to $210 million, with gross margin to be between 13% to 15%, and operating margin to range between 5% and 7% of net revenues. For FY08 it expects revenues to be in the range of $800 to $850 million, compared to previous guidance of $850 to $900 million, with total PV module shipments between 200MW and 206MW, down from previous guidance of 210MW to 220MW.

Premier Power (OTCBB:PPRW) reported Q3 revenues of $9.2 million, up 105% Y/Y, with gross margin of 10.8%, and a net loss of $250,839, or $0.01 per diluted share, as opposed to net income of 582,522 , or $0.03 per diluted share in the same period last year.

Wind

The European Wind Energy Association (EWEA) sounded a call for the EU to get its act together and pass legislation that would keep it in the lead in the global wind energy market, warning it that under the new Obama administration the U.S. is readying its policies to propel it ahead of the EU in the same way that the U.S. become a leader in the Internet after it was developed by English scientist Timothy Berners-Lee.

Emerging Energy Research reported this week that it doesn't anticipate China's plans to reach 100GW of installed wind power generation capacity by 2020 to stall due to the global financial crisis. It said that "China's wind initiatives are so large in scale and so well supported by the government that the country's new renewable energy goals are likely to be met well before the 2020 target."

The Nebraska Public Power District issued an RFP for PPAs for 80MW of wind projects to be constructed by 2010.

American Superconductor (Nasdaq:AMSC) signed an agreement for co-development work with Shenyang Blower Works to begin manufacturing 2MW wind turbines for the Chinese market. AMSC Windtec(tm) will supply SBW with designs for its 2MW turbine and will help it localize the components for the turbines.

Wal-Mart made a deal with Duke Energy to supply up to 15% of its energy load in Texas with wind energy. Duke will provide the power from its farm under construction in Notrees Texas. 

GE Energy announced the shipment of its 10,000th 1.5MW wind turbine. In its announcement GE provided the following statistics: its 10,000 shipped turbines can power more than 5 million homes and produce more than 50 million megawatt-hours per year.

Vestas (VWS.DE) received an order for 2 projects totaling 29 units of the V90 2MW wind turbine. The projects will have a total installed capacity of 58MW and the turbines will be delivered in 2009. Management said that it has not noticed customers cancelling or renegotiating booked orders.

Transmission

CRA International contributed to a report prepared for Electric Transmission America LLC, outlining the benefits of building about 1,200 miles of extra-high voltage transmission in the Southwest Power Pool (SPP manages the transmission system in all of a part of Arkansas, Kansas, Louisiana, Missouri, New Mexico, Oklahoma and east Texas).

Earnings

A-Power (Nasdaq:APWR) reported Q3 revenue of $85.4 million, up 120% Y/Y and net income of $9.4 million, an increase of 124% Y/Y. Earnings per share for Q3 were $0.28. Management reiterated net income guidance of greater than $35 million and FY09 net income guidance of $70 million with EPS estimated at $2.00.

Broadwind (BWEN.OB) reported Q3 revenues of $64.5 million , up from $40.8 million in the prior quarter and $3.1 million for the same period last year. It reported a net loss of $3.4 million, or 0.04 per diluted share, compared with net income of $683 thousand, or $0.01 per share for the same period last year. Management said it has retained Morgan Stanley for strategic advisory services including the situation with Tontine, the company's largest shareholder who recently indicating in a 13D it is liquidating its ownership position in BWEN.

Nordex (NDX1.F) reiterated its FY08 outlook for EBIT of €60-66 million and sales of €1.1 billion. It also issued FY09 guidance expecting growth of 10% to 15%.

DOE Watch

The DOE awarded $66.9 million to the Big Sky Regional Carbon Sequestration Partnership which will conduct a large-volume test in Wyoming's Nugget Sandstone formation "to demonstrate the ability of a geologic formation to safely, permanently and economically store more than two million tons of carbon dioxide (CO2)." The project is estimated to cost $130.6 million - subject to annual appropriations from Congress.

Politics, National and State-Driven News

In an important development on federal energy policy, the Democratic Caucus of the House voted to replace John Dingell (D-MI) with Henry Waxman (D-CA) as the Chairman of the Energy & Commerce Committee. The most will almost certainly result in a more progressive plan on cap-and-trade. Waxman favors short-term emissions reduction target while Dingel favored more relaxed targets which favored the auto industry. The question now is whether Waxman can get both sides of the aisle on board with his agenda.

California Governor Schwarzenegger signed an executive order Monday calling for utilities to provide 33% of their power from renewable sources by 2020. Current legislation calls for a 20% target by 2010.

On Tuesday, California, Illinois and Wisconsin signed a pact with Indonesia's Aceh province committing the three states to working toward accepting deforestation carbon credits into U.S. emissions trading schemes.

On Thursday Kentucky Governor Steve Beshear articulated an energy plan for the state calling for GHG reduction and the creation of jobs in the energy sector. The plan focuses on: improving energy efficiency in homes, industries and the transportation sector; increasing consumption of renewable energy; growing biofuel production; developing coal-to-liquids industry; implementing plan to increase gas; initiating aggressive CCS projects and examining the use of nuclear power. All told, the plan calls for a 20% reduction from 1990 GHG levels by 2025. The plan also includes an RPS of 25% by 2025.

Massachusetts Governor Deval Patrick is pushing malls and big-box retailers to increase efficiency through solar power. In a press release on Thursday, he set two goals: making all new malls and "big box" retail stores energy efficient and powered in part by solar energy by 2010 and offering a super-efficient building code as a local option for municipalities.

Oklahoma state House Speaker Chris Benge (R-Tulsa) announced a proposal for Oklahomans buying geothermal heat pumps to receive a 5% state tax credit.

And Eric Schmidt, Google CEO and advisor to Obama, said that the U.S. should begin investing heavily in wind and solar, the energy grid, and to slowing the growth of energy consumption through improvements in energy efficiency and differential tax treatment for more efficient cars.

Financing and M&A

ISE Corp, a provider of hybrid electric drive systems and components for heavy duty vehicles raised another $17.5 million through a D Series round of funding from Siemens Venture Capital, Macquarie Clean Technology Fund, DTE Energy Ventures, RockPort Capital Partners and NGP Energy Technology Partners. ISE will use the proceeds to further expand its sales efforts into the transit bus market and development of its energy storage systems.

Climate Change Capital said it is investing 5 billion yuan ($732 million) in environmental projects in China over the next couple of years.

Aviva is launching a €500 million cleantech investment fund which will be managed by Sachsen Funds Group.

SunEthanol raised $25 million in Series B financing and changed its name to Qteros. The round was led by Venrock and Battery Ventures with other investors including BP and Soros Fund Management LLC. Qteros has developed Q Microbe(tm) technology for producing sustainable liquid fuel from non-food plants and waste.

Independent Power Producer, Azure Power, has raised an undisclosed amount of capital in a Series A round from Helion Venture Partners and Foundation Capital. Azure is scaling its solar operations in India.

ReGen Power Systems raised $5 million from 21 Ventures LLC and the Quercus Trust, to further development of its low temperature differential engine for waste industrial heat to power.

enXco closed project financing for the 150MW Shiloh II wind energy project which is under construction in Solano County, California. Lenders on the project are Dexia and Credit Industriel et Commercial. JP Morgan arranged the equity as lead investor with Wells Fargo and New York Life participating. The project consists of 75 2MW REpower wind turbines. PG&E will purchase the power under a 20-year PPA. enXco will operate and maintain the project.

Tendril Inc. is seeking to raise $20 million to roll out its technology which links utility power systems to consumer-controlled equipment. Its software enables consumers to program the "smart meters" in their homes to reduce consumption from appliances and air conditions during peak hours of power consumption.

EDC said it completed the acquisition of 60% of First Gen Hydro Power Corp. for about $105 million, marking the entrance of the geothermal company into the hydro power space.

Ultracapacitor startup EnerG2, Inc. raised $8.5 million in its first round led by OVP Venture Partners and Firelake Capital Management. WRF Capital, the Sustainability Investment Fund and members of Northwest Energy Angels also participated.

Danotek Motion Technologies raised $14.5 million from CMEA Ventures, StatoHydro Ventures and GE Energy Financial Services to expand manufacturing and support for its entry into the wind turbine OEM market with generators up to 3MW.

Phoenix Solar (PS4.DE) received a syndicated loan with a three-year term for €150 million in a round led by BayernLB. Senior lead managers include Dresdner Bank and Hypo Vereinsbank, and co-arrangers include LfA Foederbank Bayern and the Fuerstenfeldbruck Savings Bank.

Suzlon (SUZLON.NS) is buying the 22.48% stake in REpower Systems AG from Martifer SGPS SA which is expected to be completed in May next year.

Upgrades & Downgrades

November 17 - MEMC (NYSE:WFR) rated HOLD at Collins Stewart. Collins Stewart had previously rated WFR at BUY with a price target of $27 (11/12/2008).

November 17 - Suntech Power (NYSE:STP) rated BUY at Jefferies & Company with price target of $25.Jefferies had previously rated STP BUY with a price target of $67 (5/23/2008).

November 17 - Enerr1 (AMEX:HEV) rated BUY at MDB Capital Group with price target of $10. MDB had previously rated HEV at a HOLD (11/10/2008).

November 18 - Evergreen Solar (Nasdaq:ESLR) rated SELL at JP Morgan. JP Morgan had previously rated ESLR a HOLD (11/5/2007).

November 18 - MEMC (NYSE:WFR) rated OUTPERFORM at Friedman Billings with a price target of $30. Friedman Billings had previously rated WFR a BUY with a price target of $80 (7/24/2008).

November 18 - MEMC (NYSE:WFR) rated AVERAGE at Caris & Company with price target of $13. Caris had previously rated WFR at BUY with a price target of $50 (7/24/2008) and $60 (7/11/2008).

November 19 - Suntech Power (NYSE:STP) rated OUTPERFORM at Cowen & Company.

November 19 - Trina Solar (NYSE:TSL) rated OUTPERFORM at Cowen & Company.

November 19 - First Solar (Nasdaq:FSLR) rated MARKET PERFORM at Friedman Billings with price target of $120. Friedman had previously rated FSLR at HOLD with a price target of $210 (10/14/2008), SELL (7/31/2008) and SELL with a price target of $200 (5/21/2008).

November 19 - American Superconductor (Nasdaq:AMSC) rated BUY at Kaufman Brothers with price target of $25. Kaufman had previously rated AMSC at BUY with price target of $53 (6/10/2008) and $37 (5/28/2008).

November 19 - ReneSola (NYSE:SOL) rated HOLD at Credit Suisse with price target of $5.

November 19 - Trina Solar (NYSE:TSL) rated BUY at Jesup & Lamont with price target of $11. Jesup & Lamont had previously rated TSL at BUY with a price target of $54.

November 20 - Ener1 (AMEX:HEV) rated BUY at JMP Securities.

November 20 - A-Power (Nasdaq:APWR) rated BUY at Dougherty & Company with price target of $10. Dougherty had previously rated APWR BUY with a price target of $33 (8/22/2008).

November 20 - A-Power (Nasdaq:APWR) rated HOLD at Roth with a price target of $10. Roth had previously rated APWR at BUY with a price target of $35 (8/26/2008) and $30 (6/10/2008).

November 20 - Trina Solar (Nasdaq:TSL) rated HOLD at Ardour Capital with a price target of $9. Ardour had previously rated TSL at BUY with a price target of $64 (7/18/2008).

November 20 - A-Power (Nasdaq:APWR) rated BUY at Jesup & Lamont with price target of $19. Jesup & Lamont had previously rated APWR at BUY with a price target of $39 (7/24/2008) and a price target of $25 (2/6/2008).

November 20 - Suntech Power (NYSE:STP) rated SELL at Collins Stewart. Collins Stewart had previously rated STP at HOLD (10/22/2008), at BUY with a price target of $50 (2/21/2008) and $65 (2/14/2008).

November 20 - HOKU (Nasdaq:HOKU) rated HOLD at Ardour Capital with a price target of $3.

November 21 - ReneSola (NYSE:SOL) rated HOLD at Deutsche Securities. Deutsche had previously rated SOL at BUY with a price target of $24 (5/15/2008).

November 21 - Suntech Power (NYSE:STP) rated BUY at Jesup & Lamont with a price target of $9. Jesup & Lamont had previously rated STP at BUY with a price target of $60 (8/21/2008) and $64 (5/5/2008).

November 21 - Pacific Ethanol (Nasdaq:PEIX) rated HOLD at Matrix Research.

Research & Reports

National Action Plan for Energy Efficiency Vision for 2025 - A Framework for Change

This Vision for the National Action Plan for Energy Efficiency establishes a goal of achieving all cost effective energy efficiency by 2025; presents ten implementation goals for states, utilities, and other stakeholders to consider to achieve this goal; describes what 2025 might look like if the goal is achieved; and provides a means for measuring progress. It is a framework for implementing the five policy recommendations of the Action Plan, announced in July 2006, which can be modified and improved over time.

Wind Energy for a New Era - An Agenda for the New President and Congress

The American Wind Energy Association presents an overview of the key national policies that are needed to support the growth of wind energy consistent with the vision of 20% wind energy by 2030.

- 20% Wind Power Point Presentation

Wind Vision 2025 - Powering Canada's Future

CanWEA believes that Canada must start thinking big about wind energy so that we can capture our fair share of the benefits that are coming from the explosive world-wide growth in this industry. In order to join the global leaders in wind energy, Canada should seek to produce 20 percent or more of its electricity from wind by 2025. This exciting vision is not only practical from a technical perspective, there is also a very strong business and environmental case for making wind power a priority in our country. This document will tell you more about our WindVision 2025 and how thinking big about wind energy will pay off for Canadians. Canadian Wind Energy Association.

Cap and Trade Contributions to the Design of A U.S. Greenhouse Program

The specific purpose of this paper is to draw lessons for the design of a U.S. cap-and-trade system for greenhouse gas (GHG) emissions from the four years of experience with the EU ETS. Drawing lessons has its dangers, of course: what worked in one situation may not apply for the problem at hand. Therefore, an important theme here is the institutional and historical circumstances that affected the design and creation of the EU ETS. While these circumstances, different from those in the United States, do not make lessons from the EU ETS inapplicable in an American context, they must always be kept in mind.

Smart 2020: Enabling the low carbon economy in the information age

Some of the policy recommendations contained in this report may result in greater ICT deployment. Efficiency improvements will continue to be an important industry focus as ICT use increases. Much has been written about the potential environmental impacts of ICT use. ICT is currently responsible for approximately 2.5% of national CO2 emissions in the U.S. This impact is predicted to grow under the business-as- usual scenario to 2.8% by 2020. The ICT sector is committed to reducing these impacts as individual companies and through industry
initiatives such as GeSI. The Climate Group.

The U.S. biofuels is that the industry continues to face headwinds of falling gas prices, declining consumption and a lot of cleaning up in legislation aimed at stimulating production and consumption, not to mention the fact that feedstock inputs in the U.S. markets are either too expensive and volatile (corn) or too nascent to produce and commercialize with any scale (algae, switch grass, Jatropha, etc.). Against this backdrop, U.S. distillers continue to face extreme margin pressure and over-capacity issues. 

The biofuels segment declined 21% this week, with only MGP Ingredients (Nasdaq:MGPI) and Green Plains Renewable (Nasdaq:GPRE) managing to stay in positive territory, up 16%. We saw Green Plains present at Imperial Capital's Global Opportunities Conference and were impressed. To put it in the words of a Bunge employee in the audience, GPRE is 'best in class' in the U.S. markets with a diversified business model, strong balance sheet, and an opportunistic stance on the market. Meanwhile, Aventine (NYSE:AVR), which closed down 75% looks like it is going to be the next to follow VeraSun into bankruptcy. Year-to-date, the group is down 78%. 

The energy management group closed down 9% which, in a week like we just had, is actually impressive. Comverge (Nasdaq:COMV) and EnerNOC (Nasdaq:ENOC) both led the group downward, each shedding 24% in market cap. Orion Energy (Nasdaq:OESX) which showed progress in a couple press releases, bucked the trend and gained 9%. Year-to-date, the group is down 75%. 

The energy storage group closed down 13% on the week, led by Active Power (Nasdaq:ACPW) which was down 35%. On the other side, Ultralife Batteries (Nasdaq:ULBI) has been holding up in recent weeks remarkably well, managing to post a 1% gain. We are starting to see announcements in the sector coming from the electric vehicle markets, which is a good sign that conditions are setting up for growth for companies in energy storage providing solutions for EVs. Altair Nano (Nasdaq:ALTI) got much needed validation in the utility grid market and also with further federal funding for its project with the Navy. 

Geothermal had another tough week, closing down 22%, led by US Geothermal, which closed down 38% to $0.44. Meanwhile. Calpine (NYSE:CPN) is trading at 0.66x book, which has to be getting close to being oversold at this point. As a comparable, Ormat (NYSE:ORA) is trading at 1.24x book. We had a chance to sit in on Raser Technologies (NYSE:RZ) presentation at the Imperial Capital conference as well, and were impressed with the progress the business is making. The 11MW Thermo I facility is online which is a huge milestone for the business. According to management's presentation, the company is going to build 100MW of plants this next year, which, based on the model for the Thermo facility, represents about $1 billion in revenues over the next 10 years. It plans to roll out another 129MW in 2010  and 129MW in 2011. So at some point, at a market cap of less than $200 million, the stock has got to begin looking more attractive.

The upstream solar group closed down 18% on the week, led by Hoku (Nasdaq:HOKU) which closed down 32% and REC (REC.OL) which lost 30%. Concerns about project delays and oversupply continue to plague the upstream group, as well as MEMC's (NYSE:WFR) poor performance. Its announced negative outlook earlier this week sent the group sharply lower. Year-to-date, the group is down 59%. 

The solar equipment and systems group was buoyed by Satcon (Nasdaq:SATC) which gained 12% on the week, and BTU (Nasdaq:BTUI) which only lost 1%. Negative outlook on project financing and expectations that companies are putting expansion plans on hold are the major contributors to lackluster performance in this group, which is down 65% on the year-to-date. 

The midstream sector took another hit this week, closing down 23%. Most of these stocks are now trading at close to book or below. They took a hit on Tuesday on comments from J.P. Morgan's Christopher Blansett about the potential for reduced subsidies for solar in Europe. Blansett said that 2008 may he thinks 2008 was a peak for solar energy subsidization and recommended First Solar (Nasdaq:FSLR) as a "safe haven." Blansett clearly isn't impressed by Governor Schwarzenegger's mandate for 33% renewable energy contribution in California, the potential impact and long-term stability in the U.S. market provided by the eight-year solar tax credit extension, and the expectation that Obama's administration will likely accelerate the passage in Congress of a federal RPS.

We think these dynamics alone, in the U.S. can more than offset any instability in European subsidies.

Moreover, new government incentives in Japan will also have an impact next year. Japan has seen strong legislative support for solar and its government is re-implementing incentives, targeting 70% of newly built houses to have solar panels by 2020.  Japan has earmarked 9 billion yen ($92 million) for solar panels for households in this year to March 2009. Japan's Ministry of Economy,

Trade and Industry is seeking 24 billion yen ($246 million) for subsidies in the year starting April 2009, and estimates that about 100,000 homes would install solar panels next year, with the subsidy. We mentioned above that Japanese solar manufacturer, PV Crystalox is ramping guidance, not cutting it. Sino-American Silicon Products (5483.TW0) said it is boosting capacity 40-50% next year and it expects 2009 sales to increase next year to T$16 billion ($481 million) from T$11 billion. And Kyocera (NYSE:KYO) last week announced it is building its second solar plant to double its output in three years to meet growing demand.

While France is proposing a plan to double the amount of energy provided by solar power and other renewables by 2020. The French government said it would seek tender offers by the end of this year to build at least one solar power plant for each of its regions by 2011 with aggregate capacity of 300MW. The current incentive program in France includes € 30c/kWh feed-in-tariff for residential rooftop applications and € 55c/kWh for BIPV applications. The government is now planning to provide € 45c/kWh for large commercial installations, and intends to raise solar power output to 5,400MW by 2020 from less than 50MW in 2007. Its previous targets were for 3000MW of solar power by 2020. France's target for renewable energy consumption by 2020 is 20%. And the EU has increased its target to 23% by 2020.

So we have to ask what Blansett is thinking when he makes such dour comments in the midst of what appears to us to be pretty remarkable legislative support in the U.S., Japan, France and the EU.

Add to this the dynamic in the industry which is expected in the midstream (module oversupply) and upstream (more polysilicon production coming online) in the next year and it seem to us that prices are going to come down, making solar a more attractive solution to the end customer. Meanwhile, efficiencies will only get better. 

Regardless, the mood in solar on the Street remains remarkably negative and, adding to the negative mood - MEMC (NYSE:WFR) lowered its guidance. The lowered guidance from MEMC exacerbated concerns that the solar industry will face stronger headwinds amidst a weak economic environment, with tighter financing conditions slowing down projects, or halting them altogether.

But again, there is plenty of good news out there, which, unfortunately just keeps getting overlooked. Pace PV Crystalox increasing its guidance; LDK (NYSE:LDK) affirming its guidance and announcing another impressive supply deal; and Suzlon considering entering the solar business because the India opportunity looks so attractive.

The wind sector closed down 18% this week, led by A-Power (Nasdaq:APWR), which, in our opinion is remarkably oversold. It is trading below book value, at about 3.2x this year's forecasted income of $35 million, and 1.6x next year's forecasted income of $70 million. It has about $60 million in cash, or $1.89 per share. It announced results this week for the Q3, with revenue growth of 120% and net income growth of 124% Y/Y. The fact that it shed another 32% of its market cap on the heels of these results is a signal that it has got some serious credibility issues. Vestas (VWS.DE) made a contrarian announcement this week that it isn't seeing any delays, cancellations or attempts to renegotiate contracts, which is a positive signal.

About Aspire Clean Tech Communications, Inc.

Based in San Diego, Aspire Clean Tech Communications is dedicated to providing strategic consulting and communications services to businesses operating in the alternative energy and clean tech industries. Our commentary and outlook on the public markets and the alternative energy can be found on a daily basis at www.smallcappulse.com.

For more information about Aspire Clean Tech Communications, Inc., contact Todd M. Pitcher at 858-518-1387.

This Aspire Week in Review was sponsored by Comanche Clean Energy, Inc., a leading Brazilian ethanol and biofuel firm bringing the lowest cost and most efficient alternative energy solutions to the world, and Hayden Communications, Inc., Wall Street's leading corporate communications firm. For more information about Hayden Communications, call 646-536-7331, for more information about Comanche Clean Energy; contact Todd M. Pitcher at 858-518-1387.

The Aspire Week in Review is brought to you by Small Cap Pulse the best source on the web for financial and economic commentary, stock recommendations, and a fresh idea. To learn more about Small Cap Pulse, call 858-509-9900.

 

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