Aspire Week in Review – Week Ended September 12, 2008

Sep 12, 2008
Author: Administrator

Aspire Week in Review – Week Ended September 12, 2008

Well, Congress is back and it shouldn’t surprise anyone that energy and oil drilling are on the top of the agenda for debate. As it turns out, the Dems appear to be caving on the issue of domestic drilling agreeing with the GOP on Monday to let the Senate move forward on legislation that would allow limited oil and gas drilling 40 miles off Florida’s Gulf coast, and another broader piece of drilling legislation. To be fair, the GOP was holding the Dems hostage on the matters by filibustering a defense bill which authorizes $612.5 billion in military spending and $70 billion for the wars in Iraq and Afghanistan. After Senate Majority Leader Reid acquiesced to let the drilling legislation move forward the Senate voted 83-0 to move ahead on the defense bill (see Politics below).

Nuclear operator British Energy is reporting that Scotland will come up far short in terms of energy supply by 2025 if it relies solely on renewables. The Scottish government, however, was unphased by the claim, reaffirming its opposition to nuclear as an alternative.

Here in the U.S. Federal Regulators on Monday moved toward allowing a license for the radioactive waste dump at Yucca, in Nevada. The Nuclear Regulatory Commission will take about four years to consider the Energy Department’s 8,600 page application. Waste is currently sitting at 121 temporary locations in 39 states – and meanwhile, we have advocates out there pushing for more nuclear. It seems that we should have a plan for longer-term storage and credible answers to related safety and environmental concerns answered before we start piling on waste. That this hasn’t become a more widely discussed and debated issue on Capitol Hill is remarkable. By the way, about $14 billion has already been spent on the Yucca Mountain repository and the total cost has recently been raised to $96.2 billion, with the best-case scenario for the opening date set at 2020.

The Energy Information Administration released its September International Energy Outlook for 2008, projecting that energy consumption will grow by 50% over the 2005 to 2030 period, with total world energy use rising from 462 quadrillion British thermal units (Btu) in 2005 to 563 quadrillion Btu in 1005, and then to 695 quadrillion Btu in 2030.

It further reported that world energy-related carbon dioxide emissions continue to increase, in its reference case, from 28.1 billion metric tons in 2005 to 34.3 billion metric tons in 2015 and 42.3 billion metric tons in 2030, an increase of 51% over this period. And worldwide, the consumption of hydroelectricity and other renewable energy sources increases 2.1% Y/Y from 35 quadrillion Btu in 2005 to 59 quadrillion Btu in 2030.

The Aspire Week in Review is brought to you by:

Abroad, the South Korean government announced this week that is has launched a green energy development strategy that involves $2.7 billion in investment over the next five years, and will include mandates for power companies to produce a percentage of their total output with clean energy, which could be as much as 10% by 2020.

We mentioned last week that the U.S. Commerce Department is leading a Clean Energy trade mission to China this week which consists of 19 U.S. companies. The U.S. government has projected that the market will reach $186 billion in 2010 and rise to $555 billion in 2020.

Biofuels and Biomass

The USDA cut its estimates this morning for U.S. corn production, to 12.1 billion bushels, from 12.3 billion bushels last month; while the soybean crop is projected to be slightly lower to 2.93 billion bushels, down from an earlier estimate of 2.97 billion. It increased its price estimates for corn to a range of $5 and 6 per bushel and for soybeans to a range of $11.60 and $13.10 per bushel.

In the latest round of controversy about biofuel vs. food and the implications of food prices, NBB CEO Joe Jobe fired a salvo at UN expert Olivier de Schutter, pointing out that “While the soaring price of oil is overwhelmingly recognized as the major factor driving food price increases, biofuels such as ethanol and biodiesel have had a marginal effect on the increase in food prices in the U.S. – about four to five percent – according to the U.S. Department of Energy and the USDA.”

Renewable Energy Group opened a 35 million gallon per year plant in Seabrook, Texas this week. This is the ninth biodiesel production site owned or managed by REG, which either produces or markets more than 300 million gallons of biodiesel per year – about half of U.S. total production.

VBV LLC announced its “first grind” at Bio-Energy’s ethanol plant in Indiana, which is expected to begin ethanol production, while its Tennessee plant is scheduled for completion later this fall. The company is expected to vote on a proposed merger with Green Plains Renewable (Nasdaq:GPRE), where the combined company will have four ethanol plants producing about 330 million gallons per year and grain storage capacity of 22 million bushels.

GreenHunter Energy (AMEX) said it has achieved 65% of nameplate production capacity (of 105 million gallons-per-year) at its refinery in Houston, which currently uses animal fats as its feedstock. Operations are being shut down through Monday, however, due to concerns about being in the strike path of Hurricane Ike.

Nova Biosource Fuels (AMEX:NBF) said it has received certification of substantial completion for its Seneca biodiesel refinery project, demonstrating in the test period throughput levels in excess of 5,760 gallons per hour of biodiesel production (80% of nameplate capacity). Since March 31, 2008 it has passed nine million gallons of production.

Range Fuels said it is collaborating with Ceres to research, develop and commercialize purpose-grown herbaceous biomass feedstocks. It is looking for the ways to use non-food sources of biomass may play in producing cellulosic ethanol on a commercial basis.

POET is opening two 65 million gallon per year ethanol plants this month, in Indiana and Ohio. The opening for the $105 million ethanol facility in Indiana was yesterday, while the $130 million Ohio facility will be opened later this month.

Velcan Energy cancelled investments in four biomass power projects in India representing 35MW to pursue a number of significant hydro power projects, which it thinks better serve the interests of its shareholders.

This week India’s Cabinet approved implementation of the National Biofuel Policy that has set an indicative target of blending 20 per cent ethanol in petrol and non-edible oil from plants like Jatropha in diesel by 2017.

Brazil

Emerging Energy Research reported this week that “Following disappointing results under its previous renewable energy promotion policy PROINFA, Brazil’s latest biomass reserve auction held on 14 August 2008 produced more tangible results, with 2,379 MW of 15-year biomass PPAs finalized. The significant biomass gains—amounting to over 2% of Brazil’s total power generation—derive from the country’s burgeoning ethanol industry, which made a significant move into the electricity sector by securing 30 of 31 contracts awarded in the auction. With an additional two auctions containing biomass capacity set for September, biomass-based generation is positioned to play a prominent role in Brazil’s energy mix.”

Clean Tech and Carbon Capture Markets

URS Corporation (NYSE:URS) won a contract by We Energies to provide management, engineering and commissioning services for the upgrade of an air quality control systems at the Oak Creek Power Plant in Wisconsin, worth about $600 million. URS will be installing two wet limestone forced oxidation flue gas desulfurization systems and two selective catalytic reduction systems for the removal of nitrogen oxide (NOx).

We have been writing about the Schwarze Pumpe power station in East Germany lately, and it was inaugurated this week. The Vattenfall pilot project uses a CCS technology which is supposed to provide a cleaner method for burning coal, and this remains a contentious issue for those who think that moving down any path which supports a commitment to burning coal is the wrong direction to go. Vattenfall’s website says that "CCS will work as a temporary solution that buys us the time we need to develop a sustainable energy system in the future. We say that CCS is a way of 'bridging to the future'.”

IPSA Group said it is increasing the scale of its clean coal fired power plant development program in South Africa. It intends to increase its portfolio under development from 500MW to almost 1,000MW with the addition of steam turbine units.

Energy Storage

Maxwell Technologies (Nasdaq:MXWL) said LTiREEEnergy selected its BOOSTCAP® ultracapacitors to supply backup power for LTI’s blade pitch control system – which enhances the consistency of wind turbines’ electrical energy output.

Planar Energy Devised acquired the technology and manufacturing rights of Policell Technologies’ large format lithium ion batteries based on its nano-composite separator technology which prevents cells from triggering thermal runaway.

Earnings

• Quantum Technologies (Nasdaq:QTWW) reported Q1 results for FY09, with total revenue at $3.7 million compared to $3.5 million last year, a loss from continuing operations, as well as net loss of about $47.1 million (or $0.59 per share).

Geothermal

Ormat (NYSE:ORA) purchased geothermal energy exploration rights in Alaska for $3.3 million, in a lease sale conducted by Alaska’s Department of Natural Resources.

Raser (NYSE:RZ) management reaffirmed its business strategy and said it is confident about its near and long-term business outlook, in the midst of a broad market selloff on Wednesday.

Hybrid and PHEV

EDF Energy and Toyota are going to road trial the first PHV to the UK, which started this week and will continue for another year or so.

Tesla Motors said it has selected BorgWarner for the production of a single-speed gearbox for its Roadster, and that it is accelerating its production rate. The gearbox is part of Tesla’s new powertrain which delivers about 30% higher motor torque to 380 Newton-meters and a 10% higher EPA range of 221 miles.

Honda and Yamaha set launch dates this week for electric motorcycles. Yamaha will launch electric motorcycles in 2010 that have a range of 60 miles on a single charge, and Honda will launch lithium ion battery electric motorcycles in 2011.

Conceptual

Moller International (OTCBB:MLER) said it has completed design of a hybrid flying car, which will function on the road like a PHEV “until it gets stuck in traffic” and then it will be able to lift vertically off the ground and fly up to 150mph for a short distance. When it lands it can driver for another 40 miles using one of its eight Rotapower engines, which generate electrical power. It thinks that it can produce the car “in modest volumes” for $250,000.

Hydropower

Boise-Kuna Irrigation District has awarded contracts to advance construction of the 15-MW Arrowrock hydroelectric project at a Bureau of Reclamation dam on the Boise River.

India's Himachal Pradesh State is seeking bids for development of five hydroelectric projects, totaling 496 MW, on a build-own-operate-transfer basis.

Brazil is expected to conduct an auction by year end for a concession to build and operate transmission lines linking a 6,450-MW Madeira River hydroelectric complex in the Amazon to the national grid.

France-based developer Velcan Energy has signed a partnership agreement with Brazil utility CELG Geracao e Transmissao S/A to develop two hydroelectric projects in Brazil.

The Bureau of Reclamation has awarded contracts to four companies for repair, remanufacture, or new supply of turbine-generator components for 2,078-MW Hoover Dam, on the Colorado River in Arizona and Nevada.

Albania Prime Minister Sali Berisha said September 11 he expects Albania to conclude in the coming weeks a 1 billion euro (US$1.39 billion) deal with Austrian utility EVN to build four hydroelectric projects.

Solar

Solar stocks started out the week getting hammered on concerns that oversupply of panels next year is going to drive down prices and margins. JA Solar (Nasdaq:JASO) added to this underlying dynamic saying it expects average prices to decline by 8% to 10% next year.

Another related fear is that the solar tax credits in the U.S. are going to expire. In addition, with the recent pullback in oil prices, some investors are discounting the “pain” factor that has been helping to buoy alternative energy stocks. Solar companies with exposure to Spain have been under additional pressure, but this week Piper Jaffray’s Jesse Pichel said that the Spain Energy Ministry’s proposal for a 500MMW 2009 cap is a positive – and that the market in Spain next year may not be as weak as had been in expected.

LDK Solar (NYSE:LDK) signed an 11-year agreement for processing 20,000 metric tons solar-grade silicon for Q-Cells, and an MOU for up to 5GW (an additional 21,000 metric tons) in additional wafer supplies. Trina Solar (NYSE:TSL) entered into 2-year agreement with Invictus NV to supply 20MW and 30MW for 2009 and 2010, respectively – and an option to purchase an additional 10MW for each year. With this deal, Trina has secured 70% of its forecasted 450MW production levels for 2009.

MEMC (NYSE:WFR) said that it is shutting down operations at its Pasadena, Texas facility in preparation for heavy weather (“Hurricane Ike”). Operations are expected to resume early next week, which will result in a five day impact on polysilicon production. It added that the delay will not impact its previous guidance for financial targets provided last week, but the news is unwelcome in light of the fact that it has been developing a trend of anomalous breakdowns at its facilities. In Q2, a premature failure of a heat-exchanger at its Merano, Italy facility reduced its output by just under 5%, and a loose pipe fitting in Pasadena caused a fire at that facility resulting in a shut down in production.

Evergreen Solar (Nasdaq:ESLR) management said it is in talks to license its new solar thin-film technology, and could reach agreements in the next 12-18 months.

Solarig said this week it has connected all of its PV projects to the grid that have been scheduled for 2008, which amounts to about 22MW under the current Spanish feed-in tariff. The company has also started developing building integrated PV projects to integrate PV systems.

Solar Thin Films received a $3.6 million order from Grupo Unisolar S.A. against a $12.3 million contract to build a 5MW thin film PV manufacturing plant in Spain. Delivery and installation will commence later this year with completion in 2009.

Meyer Burger signed a deal worth CHF 30 million ($26.5 million) with Konca Solar to deliver advanced wire-saw equipment used in manufacturing high-quality solar wafers. The first shipment of tools is schedule for delivery in the first half of 2009.

Carmanah (TSX:CMH) received a $1 million order from Lyon to supply solar systems for a telecom project in North Africa. The project has an estimated value of up to $6 million over the next three years. Carmahah will equip the remote telecom towers will a fully-integrated solar power system including solar modules, controllers and batteries.

Solel Solar Systems announced the opening of a $9 million factory in Finland in a partnership with Glaston, which will have the capacity to produce 240,000 parabolic solar reflectors a year – enough to power a 50MW power plant.

Downstream and Installations

Standard Solar has completed installation of a 205kW system on the roof of the Department of Energy (DOE) in Washington D.C., using SunPower (Nasdaq:SPWR) to design the install and provide the panels. The install consists of 891 modules covering 14,000 square feet of roof space.

The city of Santa Barbara has selected EI Solutions and Tioga Energy to design, build and fund a 384-kw DC solar electric system which will be located on rooftop space in a municipal corporation in its downtown area.

Water

Reports from the IWA conference in Vienna are that investment in water infrastructure needs to more than double from $80 billion to $180 billion over the next 20 to 25 years to deal with population growth and climate change.

In 2000, thermal power stations accounted for 39% of all freshwater withdrawals in the U.S. Conventional thermal and nuclear power stations are typically major users of water in their “wet” cooling systems.

The U.N. World Water Development Report says 70% of all water is being used for agricultural irrigation, 22-23% is used for industry, and the remaining 7-8% is domestic use. According to the USGS, irrigation accounts for 40% of freshwater withdrawals and nearly 70% of groundwater withdrawals. And water usage in first generation biofuels has implications for water availability as well Coal accounts for approximately 52% of U.S. electricity generation and each kWh requires 25 gallons of water.

Wind

Duke Energy announced a long-term agreement for the sale of 99MW of electricity from its Wyoming wind farm, and will purchase 100 wind turbines from General Electric that will produce 150MW of power for projects scheduled for 2010. It plans to begin building of the Campbell Hill Windpower project early next year, which will be generating electricity by late 2009. Duke said by year end 2008, it will have more than 500MW of wind-powered projects in operations and an additional 5,000MW in development.

Siemens is supplying 500 wind turbines with a total capacity of 1,150 to E.ON for new projects in the U.S. and Europe, scheduled for delivery and installation in 2010 and 2011. The turbines have a capacity of 2.3MW each.

Nordex (NDXF.1) said it has added about 100MW on grid for Scan Energy A/S which will be followed by another 425MW. Scan Energy has ordered 170 Nordex turbines worth about EUR 500 million, including service for up to 10 years after install, which will be complete in 2012.

Suzlon (SUZLON.NS) said it has secured a major contract from Martifer for the delivery of 29 S88-2 turbines with a total capacity of 60.9MW to projects in Romania. It also signed a contract for wind power development in Portugal, supplying 9 S88 turbines to wind farms for a total of 18.9MW capacity.

A-Power (Nasdaq:APWR) said that Fuhrlander AG upgraded the specs on its largest wind turbine from 2.5MW to 2.7MW and will supply it with the components need to produce its first 10 units of the 2.7MW units.

Finerva Renewables (TSX-FVR) provided an update on 300MW of projects (four wind projects) it intends to submit into the upcoming BC Hydro Clean Power Call. The company said it is in project financing negotiations with “a potential corporate investor” and in the next sentence, with “a credible partner.” The company “is in negotiations with top tier turbine manufacturers” for the supply of turbines for the projects. The Clean Power RFP released by BC Hydro is targeting up to 5,000 GWh of clean, renewable energy per year.

Minnesota Power signed an agreement to purchase an interstate transmission line and phase out a long-term contract to buy coal-generated electricity. It is purchasing the DC transmission line from Square Butte Electric Cooperative for about $80 million. The state of Minnesota has a mandate requiring 25% renewable energy supply by 2025.

REpower Systems AG signed an MOU with GasTOPS Ltd. - a provider of control system and condition assessment products for the wind industry - for the supply of 2,000 oil particle sensors

Green Star Alternative Energy (Pinks:GSAE) said it is developing a new 20MW project in the Republic of Serbia, which will be the country’s first renewable energy project. The company expects the Belo Blato wind energy project to be online by Q2, 2009.

BooneWatch

T. Boone Pickens continues to capture headlines and media attention with the Pickens Plan, speaking this week to the Society of American Business Editors and Writers, Inc.

DOE Watch

The DOE announced up to $4.4 million investments in six advanced biofuels project – subject to annual appropriations - at several U.S. universities:

• University of Toledo – development of cost-effective biocatalysts capable of increasing product yield in the conversion of lignocellulosic biomass.

• Steven’s Institute of Technology – evaluation and demonstration of microchannel reactor to reform pyrolysis oil to syngas.

• Montana State University (partnering with Utah State Univ.) – evaluate the oil content of algae cultures and identification of populations with higher rates of oil production.

• University of Georgia – developing approaches to supply nutrients to oil-producing algae systems.

• University of Maine – determining the optimal yield and productivity of high potential bacteria at moderate to high temperatures

• Georgia Tech Research Corp. – evaluate and model the reaction kinetics in two experimental gasifiers using forest residues under different processing conditions.

Earlier in the week, the DOE announced awards of about $6.6 million in grants for state-level energy efficiency and renewable energy policies and projects. $4 million will go to nine projects for creating and implementing a policy and regulatory framework that would enable GW-scale clean energy capacity – either through renewable energy or demand side reductions. $2.6 million will go to six state-led projects to develop advance building codes to achieve a 30% improvement above code.

Politics

The national resources defense council said this week that an analysis of Congressional votes on clean tech and alternative energy legislation shows that Congressmen and women who have been consistently aligned with the oil industry have voted 61 times this year against these bills.

It shouldn’t be surprising to anyone that the Senate kicked off this week with more partisanship on energy policy. Senate Majority Leader Harry Reid (D-Nev) warned the GOP against forcing a shutdown in the government over the issue of domestic oil drilling. That being said, H.R. 1709, called the National Conservation, Environment and Energy Independence Act, and introduced by John Peterson (R-PA) is gaining traction in the House with 120 sponsors.

Pennsylvania Governor Ed Rendell promoted the states Wind Energy Supply Chain Initiative (WESCI) this week, whose initial goals are to identify “gaps” in the existing supply chain, identifying Pennsylvania companies that have capacity to meet production demands and working with manufacturers in the alternative energy sector to identify suppliers willing to relocate to Pennsylvania and to make capital investments there as well. WESCI is being introduced at the WindEnergy 2008 conference in Husum Germany this week.

Nebraska Governor Dave Heineman declared September Renewable Fuels Month at Husker Harvest Days on Wednesday. Missouri Secretary of State Robin Carnahan said on Tuesday that the Renewable Energy initiative will be on the November 2008 ballot – which will require investor-owned electric utilities to generate and purchase electricity from renewable energy sources equal to at least 2% of retail sales by 2011 increasing to at least 15% by 2021, including at least 2% from solar. Prior to this Missouri had stated a voluntary goal to reach 11% by 2020.

In Michigan, Governor Granholm was rebuffed before a trip to Japan but continues to push for a mandate requiring utilities to generate 10% of their energy from renewable sources by 2015 and 25% of their energy from renewable sources of energy by 2025. The push is part of her plan to attract investment into the state from Japanese investors.

A complete list of states with renewable standards and targets can be found here.

Today, the Senate Energy Committee is hosting an energy summit featuring two panels of witnesses to offer recommendations on how the U.S. can achieve a more secure, reliable, sustainable and affordable energy future. The panels will include Dan Reicher, Dan Yergin, John Deutch, John Krenicki, John Rowe, James Roberts, Frank Verrastro, Douglas Steenland, Gary Cohn, Richard Wagoner and Marvin Odum.

The Senate is expected to approve S. 3001, which will authorize $612.5 billion in budget for defense programs in 2009. About $100 million is authorized for advanced energy and power technologies, including programs to develop hybrid engines and biofuels for military systems. In addition, the bill includes a provision “Energy Considerations in Weapons Systems Development” which will require the DOD to develop a plan that will require program managers to incorporate energy efficiency in the acquisition of military systems.

Subsidies Data

The Energy Information Administration reported this week that the Federal Government spent about $16.6 billion in energy-specific subsidies in FY2007, and that subsidies have more than doubled since 1999. Subsidies to renewable energy are growing the fastest, from $1.4 billion in 1999 to $4.9 billion in 2007. Ethanol production received $3.0 in 2007 billion in blender’s credits. Refined coal received $2.4 billion.

Legislation Introduced

A new effort has been made by the leaders of the Senate Finance Committee to reintroduce legislation designed to extend the expiring federal tax breaks for renewable energy:

S.3478 - Title: A bill to amend the Internal Revenue Code of 1986 to provide incentives for the production of energy, to provide transportation and domestic fuel security, and to provide incentives for energy conservation and energy efficiency, and for other purposes.

In response to the bill, The American Wind Energy Association (AWEA) said:

“On behalf of the American Wind Energy Association and the millions of Americans who support clean renewable energy, I want to thank Senators Max Baucus (D-MT) and Charles Grassley (R-IA) for their leadership in developing this important bipartisan proposal.  We join a long list of organizations from across the political spectrum in supporting this long term extension for clean energy tax credits.  We look forward to working closely with the Senate Finance Committee, and Senate colleagues on both sides of the aisle, in the effort to move this critically important measure forward into law before Congress leaves for the election.” 

M&A & Finance

Solar EnerTech (OTCBB:SOEN) acquired 2 million shares of 21-Century Silicon for $1 million in cash, constituting a 7.8% stake in the company. Solar EnerTech will also acquire an additional 2 million shares at the same share price on the first polysilicon shipment meeting the quality specifications, and it is signed an MOU for a four year supply framework agreement for shipments.

Electro Energy (Nasdaq:EEEI) filed an 8-K announcing, based on hitting certain milestones, it has issued a 10% Senior Convertible Purchase Agreement and a warrant for the purchase of 1,562,500 shares in exchange for $625,000, from the Quercus Trust. The warrants are exercisable at $1.00 (unless Electro Energy issues stock at a lesser price subsequently), with a floor at $0.45 per share.

Enphase Energy raised $15 million to expand manufacturing of its solar microinveter products in a round led by RockPort Capital, including Third Point Ventures and Applied Ventures LLC.

Gilatz Investments bought a 3MW PV power plant in Spain for €30 million from Soltec.

Iberdrola SA accepted the Public Service Commission’s conditions and is moving ahead with its $4.5 billion purchase of Energy East Corp., parent of Rochester Gas and NY State Electric and Gas. The conditions include $275 million in rate relief for RG&E and NYSEG customers, and an agreement to distribute to ratepayers 90% of the profits from the sale of fossil-fuel plants. It is considering investing up to $2 billion in new wind energy projects in NY, and will spend $200 million on new wind parks in the state. It has plans to double its 2,400MW of wind power capacity in the U.S. by the end of 2010 and already has the turbines needed for this planned expansion.

LG Electronics signed a preliminary deal on a solar cell production JV with Conergy. Conergy also said it sold its wind turbine generator business to Warbug Pincus, so that it can focus more on becoming a downstream provider of PV products and services. The purchase price details weren’t disclosed.

US Renewables Group Novo Energy LLC have partnered to form Novo Development Co., a developer, owner and operator of waste-to-energy projects. No financial terms were disclosed.

Nebraska Energy Cooperative is selling its 21% share of a plant producing about 40 million gallons of ethanol per year to Aventine (NYSE:AVR) in exchange for 1 million shares of stock. This will give Aventine full ownership of the plant and is subject to NEC’s stockholder approval.

Fisker Automotive raised $65 million to build the Fisker Karma, an $80,000 plug-in hybrid sports car. The C round funding was led by Qatar Investment Authority and joined by Kleiner Perkins Caulfield & Byers. It plans to deliver the Karma in Q4 next year.

Upgrades and Downgrades

September 11 – Collins Steward analyst Dan Ries cut revenue and EPS targets for Canadian Solar (Nasdaq:CSIQ) to $2.60 from $2.81 for 2008 and to $4.14 from $4.46 for 2009; for First Solar (Nasdaq;FSLR) to $3.94 for 2008 from $4.12, and to $7.96 in 2009 from $8.26. He also cut revenue and EPS targets for Solarfun (Nasdaq:SOLF), Suntech (NYSE:STP) and Yingli Green Energy (NYSE:YGE).

September 11 – Calyon Securities analyst George Kotzias cut his price targets on Energy Conversion Devices (Nasdaq:ENER), Evergreen Solar (Nasdaq:ESLR), First Solar (Nasdaq:FSLR), SunPower (Nasdaq:SPWR) and MEMC (NYSE:WFR).

September 11 – Echelon (Nasdaq:ELON) was initiated at a NEUTRAL at Piper Jaffray.

September 11 – Itron (Nasdaq:ITRI) was initiated at a BUY at Piper Jaffray.

September 11 – Quantum Fuel (Nasdaq:QTWW) was downgraded to ACCUMULATE from a BUY by Ardour Capital with a price target of $2.

September 12 – Power Integrations (Nasdaq:POWI) was downgraded to SELL from NEUTRAL by AmTech Research, and a price target of $21.

September 12 – Kyocera (NYSE:KYO) was initiated at HOLD at Duetsche Securities

September 12 – Solar Power (OTCBB:SOPW) initiated at BUY at Merriman Curhan Ford with $4 to $5 price target.

September 12 – Ormat (NYSE:ORA) upgraded to BUY from NEUTRAL at Piper Jaffray with a price target of $49.

Reports and Research

Green Recovery – A Program to Create Jobs and Start Building a Low-Carbon Economy

This report outlines a green economic recovery program to strengthen the U.S. econ­omy over the next two years and leave it in a better position for sustainable prosperity. It details how to expand job opportunities by stimulating eco­nomic growth, stabilizing the price of oil, and making significant strides toward fight­ing global warming and building a green, low-carbon economy. This green economic recovery program would be a down payment on a 10-year policy program recom­mended by the Center for American Progress in its 2007 “Progressive Growth” series, which lays out an economic strategy for the next administration and includes the report, “Capturing the Energy Opportunity: Creating a Low-Carbon Economy,” by John D. Podesta, Todd Stern, and Kit Batten. That report details how the transformation to a low-carbon economy would result in sustainable economic growth.

The Impact of Increased Use of Hydrogen on Petroleum Consumption and Carbon Dioxide Emissions

This report responds to a request from Senator Byron L. Dorgan for an analysis of the impacts on U.S. energy import dependence and emission reductions resulting from the commercialization of advanced hydrogen and fuel cell technologies in the transportation and distributed generation markets.

CSP & CPV Finance and Investment summit USA (October 2-3 San Francisco) www.csptoday.com/usafinance

The world's premier investment and finance event for concentrated solar power.

Secure the Investment and finance you need to get your CSP or CPV project off the ground.

Over 150 leading solar executives confirmed to attend including: JP Morgan, HSH Nordbank, Union Bank of California, Ausra, ACORE, Sopogy, Worley Parsons, GE Energy, Solar Reserve, Rockport Capital 

And fantastic speaker line up including:

The Honorable Bill Lockyer , California State Treasurer, State of California

•    Vinod Khosla, Founder & CEO, Khosla Ventures

•    Issam Dairanieh, Venturing Team, BP Alternative Energy

•    Edward Levin, Vice President, Morgan Stanley

•    Geoff Sharples, Business Development, Google

•    Asier Aya, Financial Director, Abengoa Solar

Exclusive $200 discount for smallcappulse readers, simply use the promo code “1425” when booking online here https://secure.firstconf.com/csptoday/usafinance/register.htm

For more information please visit www.csptoday.com/usafinance  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aspire Clean Tech Sector Performance for the Week Ended September 12, and Year-to-Date

Alternative energy and clean tech stocks weren’t immune this week to the broader market selloff. In the heat of the selloff, Jesup & Lamont’s Brian Yerger published a morning note outlining 5 factors he thought were weighing on the group. We expanded on the points further:

1. So with oil prices pulling back, there is invariably a contingent of investment dollars and speculative dollars that has reduced its weighting in alternative energy stocks until it becomes clearer about what the commitments of our politicians and businesses will actually be to supporting a move to alternative energy.

2. Spain’s current feed-in regulations for PV plants will expire at the end of September, and incentives are expected to be cut substantially, from a current cap of 1GW to about 300MW. To be sure, this adds to the uncertain of Spain’s growth in the near term for its solar business. Since the end of July, when Spain’s energy commission voted to reduce its incentives, the solar sector has increase in volatility and has faced increased downward pressure.  

3. The 2008 tax credit for alternative energy in the U.S. is about to expire in December. Congress is going to have to vote on whether to extend that tax credit later this month. The Democrats tried to push this agenda heading into the break in August but the GOP held back, waiting for concessions from the Dems on domestic drilling. This dynamic exacerbates tension and uncertainty being felt by alternative energy companies and investors alike, and as added to the downward pressure we have seen lately.  

4. As technologies mature, volume expands, manufacturing prices decrease and businesses become more commoditized. This is true of solar modules as well, and expectations are that module pricing is going to decline substantially next year, which could hurt corporate profits for solar companies. In addition, Spain’s decision to reduce its subsidies, where modules have enjoyed higher pricing, will also have an impact.  

5. The broader markets have been volatile, and will continue to be so for the foreseeable future. With the financial services sector in disarray and broadening credit tightness, the meltdown in the housing markets, the poor health of the U.S. consumer which is faced with inflationary pressures, holds negative personal savings and is burdened with record credit debt, is a corrosive mix for the economy and is the underpinning for a lot of uncertainty. The government continues to throw fix after fix at the economy, from rate cuts, to stimulus checks to bailouts of financial institutions. It is far from clear whether these fixes will achieve their desired ends, or whether they will just shift risk and create new problems. In any case, the trend for the broader markets has been distinctly negative.

So all of these factors have added up to strong headwinds for the alternative energy sector, but we see the pullbacks in alternative energy and clean tech stocks as a huge opportunity. Here are some additional considerations that support our opinion.

Whether oil prices retreat to $70 or $80 in the near term, we don’t believe that the bull market in oil is anywhere close to being over. Jim Rogers points out that the oil bull market started in 1999, and three times it has pulled back 40% to 50%, only to bounce and set new highs. He says that the end of the bull market won’t be over until we find more oil or until we have a worldwide economic collapse.

In the U.S. 70 out of every 100 eligible drivers own automobiles. In China, the fastest growing world economy of 1.3 billion, about only about 5 people own cars for every 100 people. This is going to change.

Toyota Motor Corp. said in a new report that by 2020 there may be 1.5 billion vehicles on global highways, 600 million more than there are today, a situation the automaker warned “increases both the possibility of supply shortages and resource exhaustion.”

We could cite report after report and statistic after statistic that point to the conclusion that, left unchecked without alternative sources, demand for oil is going to continue to boom. What about supply? The Energy Information Administration reports that there was no growth in production between 2005 and 2007.

Even oil insiders recognize that all of the easy oil and gas in the world has basically been found by now. Of the 21 largest oil fields, at least 9 are now in decline. In 2008, CERA released a study of the 811 largest oilfields showing an average annual rate of decline of 4.5%. All of this supports Rogers’ point that the bull market for oil is nowhere close to being over.

What about world energy consumption? The International Energy Agency said yesterday that world energy consumption is expected to grow by 50% from 2005 to 2030, from 462 quadrillion Btu to 695 quadrillion Btu. And world net electricity generation is expected to increase from 17.3 trillion kWh in 2005 to 33.3 trillion kWh in 2030. Meanwhile, carbon dioxide emissions, under current conditions, are expected to increase from 28.1 billion metric tons in 2005 to 42.3 billion tons in 2030.

Massive growth in energy consumption and correlative expansion of greenhouse gas emissions will continue to levy heavy pressure on governments throughout the world to make adjustments and commitments to investing in alternative sources of energy that are substantially friendlier in terms of their carbon footprints. This is conventional wisdom which, here in the U.S. crosses party lines. Abroad, commitments by nation and state leaders to reduce their carbon footprints are generally stronger than here in the U.S., with countries like Japan and Germany leading the way. Even the Middle East is on to it - last week a poll conducted by Leaders Presents reported that 92% of regional business leaders in the UAE think that it should invest in research and development of renewable energies including solar and wind power.

Sure, the alternative energy industry relies heavily on subsidies at present, and will continue to do so for the next number of years. But, we are still subsidizing the oil industry on a global scale by about $300 billion, or 0.7% of global GDP. Subsidizing alternative sources of fuel - to get us beyond dependence on foreign oil and towards energy independence, readying our grid to supply surging demand for electricity in an age of electronification of everything, while addressing climate change - hardly seems controversial.

Our politicians see the writing on the wall, and so do our businesses. New Energy Finance reports that about $150 billion was invested in clean energy technologies in 2007. Earlier this year, a group of institutional investors controlling $1.5 trillion called on the U.S. Congress to introduce a mandatory policy to reduce emissions. Currently, there are 24 states plus the District of Columbia that have renewable portfolio standards in place, up from 13 in 2003, and certainly this number will continue to grow. At the federal level, Congress will renew the tax incentives. They will have to. At the end of the day these are politicians and there are just too many voices demanding further support for alternative and cleaner sources of energy to ignore.

If we are right about all of this, then the current volatility in the markets of late should be seen as an opportunity to accumulate leading contributors to tomorrow’s energy economy before they reach their potential.

The biofuels segment fell 10% on the week, as concerns persist about margin pressure due to higher feedstock prices, as well as the continued political backlash in against the corn-fed ethanol companies. Year-to-date the group is down 53%, and only the Andersons (Nasdaq:ANDE) who have one of the more diversified business models in the group, is anywhere close to break-even.

The energy management group is down 10% this week, led by a selloff of 22% in EnerNOC. That the group continues to soften is a bit surprising in light of the fact that it has been so beaten up year to date (down 50%) and in light of the fact that the secular trends pointing to growth and demand for energy management (higher energy costs, aging grid, etc.) are so compelling. Only Itron (Nasdaq:ITRI) has managed to stay in positive territory this year, and it was helped by a BUY recommendation yesterday by Piper.

The energy storage group sold off 12% this week, and only Fuel Cell Energy (Nasdaq:FCEL) managed to stay in positive territory. YTD, the group is down only 4% but that is deceiving in light of the fact that there are a couple companies up 66% and 127% (MKTY and QTWW, respectively).

The geothermal segment sold off 11% this week, led by Raser (NYSE:RZ), which has been under pressure recently, and not helped by a SELL recommendation a couple weeks back over at Piper. RZ closed down 19% on the week, and management issued a release to reaffirm that business is on track and the outlook is positive. Even Ormat (NYES:ORA) took a beating, trading down to $38.54 in intraday this week. The stock got cheap enough that Piper issued a BUY and posted a target of $48 on it, which should be easily achievable when (and if) the markets ever firm up. Year-to-date the group is down 32%, led by Raser. We understand the rationale for Piper’s take on Raser, and it is still early in its proving out its “well to wheels” strategy, but we think at current levels the risk has been priced into the stock.

The upstream solar segment closed down 8%, led by MEMC (NYSE:WFR) and Hoku (Nasdaq:HOKU). Other than the broader factors we glossed above, we really can’t point to any reasons in particular that Hoku had such a tough week. MEMC is a bit more understandable in light of the fact it is going to have to lose some production time in the face of Hurricane Ike. Year-to-date, the group is down 32%.

The midstream segment closed down 8% this week, again, due primarily to the reasons cited above. Evergreen Solar (Nasdaq:ESLR) got hit the hardest, which is reasonable in light of the fact that expectations for Q3 performance and margins are pretty subdued. Year-to-date, the group is down 33%. Energy Conversion Devices (Nasdaq:ENER) is still the leader, up 87%.

The downstream segment continues to struggle, posting a loss for the week of 9%. Only Solar Power (OTCBB:SOPW) managed to close in positive territory, up 1%, helped by an initiation of coverage this morning at a BUY over at Merriman Curhan Ford, and a price target in the range of $4 to $5 over the next 12 months. Year to date, the group is down 48%.

 

The equipment/systems segment shed 10% this week, led by Emcore (Nasdaq:EMKR) which had been trading pretty well over the past couple weeks – just gave it all back to close down 21%. YTD, the group is down 21%, with only Xantrex (XTX.TO) and Satcon (Nasdaq:SATC) posting in positive territory, up 54% and 21% respectively.

Well, the wind energy segment outperformed all of our other groups this week, and is outperforming on the year, down 7% and 18%, respectively. This shouldn’t be a surprise given the acceleration that we continue to see with wind farm projects both in the U.S. and abroad. A-Power (Nasdaq:APWR) has been getting the most selling pressure lately, but we can’t really figure out why, unless some hedge funds are getting squeezed out of positions. As far as we can tell, the fundamentals for the business look compelling.

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.

 

 

Disclaimer: Information has been obtained from sources considered to be reliable, but we do not warrantee that it is accurate or complete. This material is not an offer to sell or a solicitation of an offer to buy any securities. While we believe all sources of information to be factual and reliable, in no way do we represent or warrantee the accuracy thereof, nor the statements made herein. THE READER SHOULD VERIFY ALL CLAIMS AND DO HIS OR HER OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. COMMON STOCKS INVOLVE SUBSTANTIAL RISK AND IT IS POSSIBLE TO LOSE YOUR ENTIRE INVESTMENT.   This information is not an endorsement of the Company by SCP. SCP is not responsible for any claims made by the Company. You should independently investigate and fully understand all risks before investing. Statements included in this email or fax may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks and uncertainties such as competitive factors, technological development, market demand and the Company's ability to obtain new contracts and accurately estimate net revenues due to variability in size, scope and duration of projects, and internal issues in the sponsoring client. Further information on potential factors that could affect the Company's financial results, can be found in the Company's Registration Statement and in its Reports on Forms 10-K and 10Q filed with the Securities and Exchange Commission (SEC).