Aspire Week in Review – Week Ended September 26, 2008
Sep 26, 2008
Author: Administrator
On Tuesday, the Senate proceeded to the consideration of H.R. 6049, an act to amend the Internal Revenue Code of
1986 to provide incentives for energy production and conservation, to extend certain expiring provisions, to provide
individual income tax relief, and for other purposes. And today, the House approved legislation to extend tax credits.
The House bill is similar to the Senate bill, but now they will need to work out the differences before everyone heads
out of town, so a lame-duck session may still be on tap until after the election.
At issue in the Senate bill was about $18 billion in incentives to develop and use renewable energy sources, and an
eight year extension of the investment credit for solar energy, and the credit for homeowners buying solar heating
equipment (which account for about $3.2 billion), as well as a credit for PHEVs (about $758 million). In addition to the
solar tax credit extension, the tax credit for wind will be extended for a year while wave and ocean tide projects will
get two year tax credit extensions. The measure passed by a 93-2 vote in the Senate. The House approved its
legislation by a 226-166 vote.
The legislation in the Senate bill raises money to pay for itself from the oil industry, putting a freeze on the tax
deduction oil and gas companies receive for domestic manufacturing operations at 6%, and through tightening rules
applying to oil and gas companies' taxes on income earned abroad. In addition, the bill raises further money by
increasing what producers pay to the Oil Spill Liability Trust Fund from 5 cents per barrel to 8 cents per barrel in
2009, and to 9 cents per barrel in 2017.
While the tax breaks in both bills are funded by limiting tax breaks for oil and gas companies, the House bill doesn't
provide tax incentives for refineries to process oil from shale and tar sands or for projects that turn coal into liquid
fuel. The White House has threatened to veto the House bill, and it favors the Senate bill, which has protections for
Americans from paying the higher alternative minimum tax.
Also this week, east coast power plants began bidding on CO2 allowances that can be used, saved or traded at
market prices. This is the first CO2 auction and first compliance market for carbon in the U.S. The Regional
Greenhouse Gas Initiative (RGGI) mandates that regional power plant emissions don't exceed 188 million tons of
CO2 annually for six years. The goal is that by 2018, power plant emissions will have dropped 10%. A key distinction
in this cap-and-trade program is that nearly all allowances will be auctioned, instead of given away free of charge.
In Canada, Ontario's energy minister has directed the Ontario Power Authority to re-examine part of its proposed
Integrated Power System Plan to maximize the long-term energy strategy's potential to provide clean, renewable
energy to the province.
Biofuels
The U.S. ethanol industry took more criticism this week - this time from Tyson Foods' international division president
Richard Greubel who blamed higher food prices on Congress' mandate for U.S. ethanol production. The issue had
quieted down recently after the EPA denied Texas Governor Rick Perry's request to cut the RFS by 50% in 2008. To
be fair, it would be good to see those blaming corn-based ethanol on higher food prices emote the same passion
against the U.S. fiscal policy that has ushered in a new era of dollar weakness and inflationary pressure.
Southeast Renewable Fuels announced plans to build three ethanol plants producing up to 100 million gallons of
ethanol in Florida, using locally growth sweet sorghum - a plant similar to sugarcane. Management said production
could begin by late 2010.
Iogen Corp. shipped its first 100,000 liters of cellulosic ethanol to Royal Dutch Shell, as part of a 180,000 order. The
fuel was produced from wheat straw at Iogen's demo facility.
The Wall Street Journal reported on Tata Chemicals' sweet sorghum-fed ethanol plant which will be commissioned in
Nanded, Maharashtra, next month, noting that this will be a validation of sorghum as the ideal bioethanol crop for
India. The plant will reach full capacity of 8 million liters (about 2.1 million gallons) per year by 2010. The Indian
government approved the national Policy on Biofuel earlier this month mandating a 20% blending of biofuel with other
fuel by 2017. Production of about 265 gallons of ethanol using sweet sorghum costs about $82, compared to about
$89 for corn and about $112 for sugarcane - according to the WSJ. Todd Neely, of DTN Ethanol, said, however, that
sweet sorghum is not without its issues.
Sweet sorghum is harvested just one time per year in North America and is difficult to transport. So it would hard for it
to become a primary ethanol feedstock at a large-scale ethanol plant. It is more likely a feedstock that would be used
in a rotation, according to Neely.
Maple Energy increased its budget for its ethanol project in Peru to $222 million, citing substantial increases in
agricultural input, construction expenses, design and engineering. In August, Maple completed the acquisition of
1,299 hectares of land near the main estate of the ethanol project.
E85
Recent announcements from Saab and GM on the E85 front - Saab will display an E85 concept car (Saab 9-X Air
BioHybrid) at the Paris auto show in October; and GM will make its E5 compatible Pontiac G3 in the spring of 2009.
Carbon Reduction and Clean Technology
The Oak Ridge National Laboratory released a study showing that annual CO2 emissions from burning fossil fuel and
manufacturing cement have grown 38% since 1992 from 6.1 billion metric tons of carbon to 8.5 billion metric tons in
2007.
Seven western U.S. states and four Canadian provinces this week proposed a carbon trading program intended to
reduce global warming by 15% from 2005 by 2020 dubbed the Western Climate Initiative ("WCI"). Each state will now
legislate in accordance with the framework of the WCI, which was spearheaded by California Governor
Schwarzenegger who is overtly critical of the Bush administration about its failure to set any carbon reduction
standards. The WCI includes California, Washington, Arizona, Oregon, Utah, New Mexico, Montana, Ontario,
Quebec, British Columbia and Manitoba.
Iowa has begun to measure the affect of GHG's in Iowa have on the environment, posting its first inventory of point
source-specific GHGs for 2007 on its web site, which shows that GHGs from 276 of the state's largest polluters
account for just less than half of all emissions.
Japan signed a deal this week to buy some of Czech Republic's unused carbon credits. Under the Kyoto Protocol,
Prague is committed to reducing its carbon emissions by 8% by 2012 and it has already reached a 24% reduction -
which gives them 150 million units of carbon credits worth about $1.47 billion dollars.
Energy Management
Comverge (Nasdaq:COMV) said that it has reached the milestone of managing 2,200 MW of electricity capacity and
in excess of $476 million in estimated future revenues. It said that since its IPO in April, 2007, its portfolio of clean
energy capacity has grown 508% measured by MW, and 137% measured by revenues under contract.
Power Integrations said that its four patents asserted in its infringement suit against Fairchild Semiconductor have
been ruled enforceable. Two separate juries had previously found that Fairchild had willfully infringed on Power
Integration's patents.
Energy Storage
Quantum Fuel Systems (QTWW) announced that its solar PV partner, Asola, signed an agreement to establish a JV
in southern Italy that will facilitate production and distribution of its solar modules. Asola will hold a controlling stake in
the JV with Eurobox Impianti s.r.l. Quantum holds a 25% stake in Asola.
Cannondale Sports Group has selected the Toshiba fast-charging SCiB (Super Charge ion Battery) lithium-ion
battery to provide the power battery module for a new electric bicycle for the North American and European markets.
Continental has begun series production on lithium-ion battery packs for use in PHEVs, that will installed as the
standard in the new Mercedes S400 BlueHYBRID which will be available in mid-2009. The cells from the battery pack
are from Johnson Controls (NYSE:JCI).
Geothermal
UTC Power (NYSE:UTX) said the first two production units of its PureCycle(r) geothermal power system installed at
the Burgett Greenhouse in Animas, New Mexico, are exceeding performance expectations. This is the first
geothermal power plant to come online in New Mexico. Raser Technologies (NYSE:RZ) has ordered 200 PureCycle
systems for various projects throughout the Western U.S.
Hybrid & PHEV
Windsor, Ontario said this week it will be the first municipality in Canada to have public charging stations available
when PHEVs come to the Canadian marketplace in 2011.
BMW is introducing a Concept 7 Series ActiveHybrid at the Paris auto show, which combines a V-8 gasoline engine
with a 15kW electric motor, eight-speed automatic transmission and a lithium-ion battery pack which reduces fuel
consumption by 15% compared to a conventional version of the car.
Caterpillar is introducing new electric-drive mining trucks at MINExpo 2008 in Las Vegas this week. And Volvo
introduced a hybrid version of its 7700 bus at the IAA Commercial Vehicles Show in Hanover, German. The bus
reportedly has 30% lower fuel consumption, and bus operators can earn a payback on the extra cost in five to seven
years.
Kenworth Truck Company introduced a new Kenworth T370 Class 7 diesel-electric hybrid tractor for long haul
applications, including beverage, general freight and grocery distribution.
Hydropower
The government of Scotland announced it plans to significantly increase its financial support for wave and tidal
energy by increasing the number of Renewable Obligation Certificates offered to marine energy projects.
India's government-owned hydro developer has signed an agreement with the Myanmar government to develop the
1,200-MW Tamanthi and 600-MW Shwezaye hydroelectric projects on Myanmar's Chindwin River.
The Inter-American Development Bank is considering providing US$400 million in supplementary funding for
construction of the 2,320-MW Manuel Piar hydroelectric project on Venezuela's Caroni River. Suez Energy Peru, a
unit of GDF Suez of France, is conducting feasibility studies of three hydroelectric projects in southern Peru intended
to meet the demand of local mining companies for about 1,000 MW. Federal utility Centrais Eletricas Brasileiras S/A
has submitted an inventory to Brazilian regulators outlining five proposed hydroelectric projects on the Tapajos and
Jamanxim rivers totaling 10,682 MW.
A unit of the World Bank has signed a loan agreement, for US$100 million, to SN Aboitiz Power Benguet Inc. to aid in
rehabilitation of the 75-MW Ambuklao and 100-MW Binga hydroelectric projects in the Philippines.
Alstom signed two hydropower contracts in Portugal and Panama - winning a euro94 million contract with
Portuguese utility EDP - Gestão da Producão de Energia Sato extend the Alqueva power plant to a total power
output to 520MW and a euro 60 million contract with Suez Energy Central America to supply electromechanical
equipment to three new hydro power plants.
The Iraq Ministry of Electricity and Kurdistan Regional Government seek bids to perform detailed feasibility studies of
three hydropower projects in Kurdistan totaling 260 MW.
Bulgaria's Cabinet decided September 25 to revive communist-era plans to develop, with neighboring Romania, four
hydroelectric projects on the Danube River totaling 1,410 MW.
Voith Siemens Hydro Shanghai has received a 75 million euro (US$110.1 million) contract to supply generating
equipment to the 2,600-MW Dagangshan hydroelectric project on China's Dadu River. Finance Minister Baburam
Bhattarai presented the annual budget of the new republic of Nepal, establishing as a priority the development of
10,000 MW of new hydropower in the next ten years.
Ocean and Tidal Energy
Babcock & Brown, EDP-Energias de Portugal SA and Efacec Capital SGPS SA have formed a partnership to develop
experimental wave power projects. The partnership's first project along the northern Portuguese coast was
inaugurated this week, utilizing three Pelamis wave-energy converters. EDP has an option to double its stake in the
venture through an additional purchase from Babcock. Phase II will require 25 more semi-submerged converters to
boost installed capacity to 21MW.
Smart Grid
This week GridWeek was held in Washington D.C., a four-day conference examining the impact of the Smart Grid on
enabling new energy efficiencies, powering renewable energy, its role in the carbon economy, challenges for
securing the smart grid, and paths for implementing EISA 2007.
GE Energy and American Electric Power's Indiana Michigan Power subsidiary announced the deployment of 10,000
GE Energy smart meters in a pilot program in South Bend, Indiana set to begin on January 1, 2009. And S&C Electric
Company and Silver Spring Networks announced the successful completion of Phase 1 interoperability testing of
S&C's IntelliTEAM II Automatic Restoration System with Silver Spring's Smart Energy Network.
Landis +Gyr signed a three-year agreement to supply 450,000 advanced metering infrastructure residential Focus
meters to Idaho Power. The contract is worth about $10 million, and the system will begin deployment in early 2009.
Companies to Watch
We think that GridPoint is going to be a company to watch in the SmartGrid space, pioneering a smart grid platform
that provides utilities with an intelligent network of distributed energy resources that controls load, stores energy and
produces power. The platform aggregates distributed energy resources and provides utility control through a web-
based interface.
GridPoint recently raised another $120 million and purchased V2Green, a PHEV grid integration company whose
technology enables utilities to "smart charge" vehicles anywhere within a service territory. In March, GridPoint
announced a commercial test of smart charging with Duke Energy, and V2Green has deployed its technology in pilot
programs with Xcel Energy and Austin Energy as well. Xcel Energy selected the GridPoint Platform for its $100
million SmartGridCity initiative in Boulder, Co. Investors in GridPoint include Altira, Goldman Sachs, New Enterprise
Associates, Parella Weinberg Partners, Quercus Trust, Robeco and SIG. For more information, go to
http://www.gridpoint.com.
Solar
SolFocus' SF-1000P concentrator PV panels have been approved by the California Energy Commission, and can
now be placed on the Eligible California Solar Initiative (CSI) PV Modules Renewables Equipment List, making it the
first CPV manufacturer on the list, and eligible for state incentives.
Renewable Energy Corp. (REC.OL) won an order worth about $2.6 billion Norwegian crowns ($463.6 million) from
Neo Solar for a wafer supply deal which is scheduled to begin in the second half of 2009 through 2015.
Ascent Solar (Nasdaq:ASTI) signed a cooperation agreement with Texsa S.A. to collaborate on developing building
integrated PV (BIPV) roofing materials. Ascent will supply product to Texas to develop, test and certify.
China Sunergy (Nasdaq:CSUN) entered into a 7-year agreement with Wuxi Guofei Green Energy Source, wherein it
will supply Wuxi Guofei with 10MW of monocrystalline cells each year starting in 2009 and extending through 2015.
China Sunergy will receive an advance payment after the signing of the Agreement.
Sanyo Electric (6764.T) said its solar cell operations will likely post larger profits in the year to March 2009 that it had
previously guided. It plans also to start commercial production of thin-film solar cells as early as April, 2010.
Trina Solar (NYSE:TSL) said it is supplying more than 13,400 PV modules to the Atlantic City Convention Center,
which comes as part of a signed agreement with American Capital Energy, who is managing project integration and
installation for Pepco Energy Services and the Atlantic City Convention & Visitors Authority. The 2.4MW system is
expected to generate more than 2.8 million kWh per year, and is being developed under a 20-year PPA with Pepco
Energy Services. It is expected to provide the ACCC with energy savings of $4.4 million over 20 years.
Yingli (NYSE:YGE) signed a $10 million supply contract with SunDurance for 1.4MW of PV modules from December
2008 to January 2009. The project is being financed by Rutgers University and the Clean Energy Program of the New
Jersey Board of Public Utilities. This morning, Yingli's management announced that it signed a 36.8MW PV module
sales contract with S.A.G. Solarstorm and has completed the installation and trial production of an additional 200MW
of annual manufacturing capacity of each of PV polysilicon ingots and wafers. It further said that it has reached
400MW of annual manufacturing capacity ahead of schedule, and has contracted substantially all of its estimated PV
module output for the remainder of 2008 and has secured more than 90% of its estimated polysilicon requirements
for this production.
Downstream
Bella Energy completed an install of a roof-mounted 100kw solar system on Kent Denver School, producing more
than 135,000kWh per year.
SunPower (Nasdaq:SPWR) completed the largest single-roof solar power installation in North America at Toyota's
North American Parts Center in Ontario, California. The 2.3MW project covers more than 242,000 square feet and
consists of 10,417 SunPower modules.
Open Energy (OTCBB:OEGY) completed its largest solar electric installation for the new California Academy of
Sciences in Golden Gate Park, San Francisco, CA. The project features 720 4x6 foot glass panels embedded with
PV cells and modules, generating 213,000 kWh o energy per year, providing up to 10% of the Academy's electricity
need.
Sharp Solar Energy and Borrego Solar are partnering to donate and install solar systems at firehouses in areas most
severely impacted by the 2007 fires in Southern California. Sharp donated three 4.5 kw systems to stations in Irvine,
Poway and San Miguel.
Tokyo Electric Power is partnering with Mitsui & Co. on a solar project at Tokyo's Haneda Airport. The companies are
building a 2MW roof top system which will generate about 2 million kWh per year, accounting for 10% of the
terminal's power needs.
Legal
This past week, more law firms are piling on MEMC (NYSE:WFR), with Brower Piven, Brian M. Felgoise P.C. and
Lockridge Grindal Nauen P. L.L.P. calling out for investors who have lost money to jump onto their Securities Fraud
Class Action suits.
Wind
The Long Island Power Authority (LIPA) said it is forming a working group with Con Ed to study the feasibility of a
wind farm 10 miles off the Rockaways. The proposed wind farm would have about 300MW of capacity, and the cost,
which would be split between LIPA and Con Ed would be about $1.5 billion.
Minnesota, Iowa, North and South Dakota and Wisconsin have joined in a 12-month study to determine the cost and
logistics for investing in a network of transmission lines which could reach $3 billion. The group supporting the study
is being called the Upper Midwest Transmission Development Initiative.
A-Power (Nasdaq:APWR) has signed its first sales contract for the sale of five 2.7MW wind turbines, with China
National Automation Control System Corp ("CACS"). Management said it is in late-stage discussions to sign
additional contracts with CACS and other parties which signed an LOI with it in Q1, 2008 for an additional 375 wind
turbines. It also announced a new distributed power generation contract with $195 million, with the Jilin Glad Group.
The two-phased project is expected to begin this month with the installation of a 24MW power station valued at $54
million. Completion of the first phase is estimated for October 2009. The second phase includes a 100MW distributed
power generation system valued at $141 million and will begin in January with the completion date not yet
announced. APWR's distributed power generation backlog is now higher than $800 million, up from $650 million in
August.
Acciona (ANA.MC) said it wants its windpower division to be producing 10% of the world's turbines by 2011, up from
4.5% at present. It also introduced its AW-3000 machine at PowerExpo this week in Spain, with a 3MW rated
capacity.
Composite Technology (OTCBB:CPTC) completed an ACCC installation in Spain boosting capacity of an existing
transmission line carrying power from a wind farm to the grid. The contract was executed by NEO Energia of Sevilla,
Spain, addressing requirements for capacity increases due to an expansion at an 80 turbine wind farm to 160.
Gamesa (GAM.MC), the world's 3rd largest manufacturer with a market share of more than 15%, is reiterating its
target to increase annual production capacity of wind turbines from 3.6 GW to about 6 GW in 2010. It has targeted
20% market share by 2010.
Nordex AG (NDXGk.DE) won its first order from Belgium, to supply up to 22 turbines from the N100/2500 series for
Air Energy. The value of the agreement is about EUR 73 million. Nordex and Air Energy also signed 10-year
Premium Service Agreements.
Rhode Island Governor announced that Deepwater Wind has been selected to develop an offshore wind project that
will provide 1.3 million MWh per year of energy - about 15% of all electricity used in the state. The project is expected
to cost more than $1 billion to construct and will be paid for through private investment.
And a plan has been unveiled in Utah for a $400 million, 159 wind turbine, 300MW project that would span 40 square
miles of public and private land. The project would power about 250 thousand Southern California homes. First Wind
LLC is the builder of the proposed project.
The Kurdistan Regional Government (KRG) announced that Iraq Ministry of Electricity intends to carry out a wind
energy detailed feasibility study in the three governorates of the Kurdistan Region in Iraq.
BooneWatch
T. Boone Pickens, Monday at the National Press Club called on Obama and McCain to come up with a plan to
reduce U.S. dependence on foreign oil. In particular - his plan, which he argues would reduce our foreign oil by 30%
in 10 years.
He told the National Press Club that he expects crude oil prices to hit $150 a barrel in 2009. He said supply forecasts
show a shortfall that will drive prices up.
DOE Watch
The DOE announced a solicitation of $8 billion in federal loan guarantees for projects that employ advanced
technologies that avoid, reduce or sequester emissions of GHGs in the area of coal-power generation, industrial
gasification, and advanced coal gasification facilities.
Politics
Prop Watch
Opposition to Prop 7 continues to build in California. The legislation would require California utilities to procure half of
their power from renewable resources by 2025; electricity providers would have to meet targets of 40% of their
electricity from renewable sources by 2020 and 50% by 2025 (the current RPS calls for 33% by 2020); makes
municipal utilities comply with the RPS that apply to investor-owned utilities; expands the energy commission's
permitting authority for power plants; and lowers the monetary penalty rate, but removes the cap on the total penalty
that a utility can be fined for failing to procure enough renewable energy:
- California Public Utilities Commission - opposes it because "it would establish an excessively rigid, and potentially unworkable, structure for the further development of renewable energy in California"
Proposition 10, dubbed "Big Natural Gas" calls for a $5 billion bond with most of the money earmarked for rebates to
customers that purchase natural gas and other fuel-efficient cars.
Committee Meetings This Week
Committee on Environment and Public Works hold hearings to examine regulation of greenhouse gases under the
Clean Air Act (Public Law 101-549), 10 a.m., SD-406.
Measures Reported This Week
S.1007 - A bill to direct the Secretary of State to work with the Government of Brazil and other foreign governments
to develop partnerships that will strengthen diplomatic relations and energy security by accelerating the development
of biofuels production, research, and infrastructure to alleviate poverty, create jobs, and increase income, while
improving energy security and protecting the environment. Sponsor: Sen Lugar, Richard G. [IN] (introduced
3/28/2007)
M&A and Financing
Concentrating PV developer GreenVolts (http://www.greenvolts.com) has secured $30 million in Series B funding from Oak
Investment Partners.
Masdar has purchased an equity stake in WinWinD, a Helsinki-based wind turbine manufacturer for euro 120 million
($177 million).
Moser Baer raised about $93 million from Nomura, CDC Group, Credit Suisse, Morgan Stanley, IDFC PE and IDFC,
to expand production of crystalline solar wafer and thin film operations.
GridPoint announced a $120 million financing that will be used to fund its acquisition strategy. To date, the company
has raised $220 million. In conjunction with the financing, GridPoint announced it has acquired V2Green, a Seattle-
based provider of PHEV grid integration technology.
Confluence Solar raised $12.7 million in a Series A round led by Convexa Capital, and investments from DC
Chemical, Scatec Adventure AS and Oceanshore Ventures.
LDK Solar (NYSE:SOL) closed a follow-on offering of 4.8 million American depository shares at $41.75 netting
$192.4 million. The proceeds will used 60% to fund the construction of its polysilicon manufacturing plant, 30% to
fund the capacity expansion of its wafer production facilities and 10% to go toward general corporate activities.
Otter Tail (Nasdaq:OTTR) announced the closing of an offering of 4,500,000 newly issued shares of common stock at
$30, and the issuance of an additional 675,000 shares at the same price pursuant to an exercise in full by the
offering's underwriters. The next proceeds are about $149 million and will be used to finance construction of the
Ashtabula Wind Center in North Dakota.
Covanta (NYSE:CVA) authorized the repurchase of up to $30 million of the Company's common stock.
Fuel Tech (Nasdaq;FTEK) is purchasing substantially all of the assets of Tacticks LLC and FlowTack LLC for a total
cash consideration of $ 4 million. Tackticks produces products and services for the air pollution control industry,
focusing on Selective Catalytic Reduction (SCR) systems for NOx control and FlowTack specializes in technology
development to help clients optimize performance in flow critical equipment such as reactor vessels in SCR systems.
The companies had combined revenue in 2007 of about $3 million.
Upgrades & Downgrades
September 22 - VeraSun (NYSE:VSE) was upgraded from SELL to HOLD at Citi Investment Research, with a target
reduction to $1.85 from 3.
September 22 - Otter Tail (Nasdaq:OTTR) upgraded from NEUTRAL to OUTPERFORM
September 24 - Evergreen Solar (Nadaq:ESLR) upgraded to SECTOR PERFORM from HOLD at RBC Capital
Markets.
September 24 - MEMC (NYSE:WFR) upgraded to OUTPERFORM at RBC Capital Markets.
September 24 - Ormat (NYSE:ORA) upgraded to BUY at Jesup & Lamont with price target of $49.50.
September 25 - MEMC Electronics (NYSE:WFR) upgraded to MARKET OUTPERFORM at JMP Securities with price
target of $48.
September 26 - Vestas (VWS.CO) was downgraded to UNDERWEIGHT at Morgan Stanley from EQUAL WEIGHT.
Research and Reports
Analysis of Federal Expenditures for Energy Development
To gain insight into the history of energy incentives, the Nuclear Energy Institute (NEI) asked Management
Information Services Inc. (MISI) to prepare an independent assessment. The findings provide a quantitative
compilation of the amounts and types of incentives provided from 1950 to 2006 and the energy sources targeted with
each type of incentive. The findings indicate that the largest beneficiaries of federal energy incentives have been oil
and gas, receiving more than half of all incentives provided since 1950. The federal government's primary support for
nuclear energy development has been in the form of research and development (R&D) programs, one of the more
visible types of incentives identified. Over the last decade (since 1997), federal spending on R&D for coal and
renewables has exceeded spending on nuclear energy R&D.
The oil and natural gas industries together garnered 60 percent of federal incentives between 1950 and 2006, with 46
percent of the roughly $725 billion in federal support going to the oil sector, according to the report by the consulting
firm Management Information Services Inc (MISI).
The report shows that the oil industry has benefited from $335 billion in combined incentives, with natural gas
receiving $100 billion.
Side-by-Side Comparison of Energy Tax Provisions of H.R. 6899 and S. 3478
Commissioned by Congress, this is a side-by-side comparison of energy tax bills H.R. 6899 and S. 3478.
The biofuels group closed down 6% this week as companies continue to struggle with high costs and increasingly
tight credit markets which make it tougher to capitalize their businesses. The only bright spot in the group, in our
opinion, is Brazil and with certain cellulosic businesses. But even Cosan (NYSE:CZZ) pulled back this week, down
17%. This is probably a short-term trade opportunity. Other companies continue to lose ground for good reason, like
Pacific Ethanol (Nasdaq;PEIX). VeraSun (NYSE:VSE) got a bounce, up 18%, but it is likely to announce substantial
dilution in the near term as it explores strategic alternatives with Morgan Stanley. Year-to-date, the group is down
57%.
The energy management group closed down 9%, with only Power Integrations (Nasdaq:POWI) in positive territory
after announcing its patent infringement case against Fairchild has been upheld. Year-to-date, the group is down
48%, with no companies in positive territory. We see the decline in this group as a great opportunity for accumulation.
Demand side energy management is only going to become a more critical issue, and generally speaking, the
companies in this group listed above have only been making positive announcements.
The energy storage group closed down 2% this week, led by Plug Power (Nasdaq:PLUG) which closed down 19%.
Hydrogenics (Nasdaq:HYGS) was the bright spot, rallying on Friday to close up 34%. We have written about the
company at Small Cap Pulse regularly and think the stock is timely anywhere below a dollar. Year-to-date, the group
is up 8%, buoyed by Quantum Fuel Systems (Nasdaq:QTWW) another company we are bullish on at current levels,
which is up 129%, and Mechanical Technology (Nasdaq:MKTY) which is up 115%.
The geothermal group closed down 2%, but Raser Technologies (NYSE:RZ) closed out the week with strength, up
15% (up 38%, or $1.78 on Friday, on a volume breakout). Ormat (NYSE:RZ) closed down 1% although it did get an
upgrade from Jesup & Lamont. Year-to-date, the group is down 38% with no companies in positive territory.
In another volatile week in the markets, the upstream solar segment shed 6%, with only DC Chemical (010060.KS)
managing to close in positive territory, up 9%. Year-to-date, the group is down 33%, led by MEMC (NYSE:WFR)
which has been hit lately by a string of class action suits from shareholders and opportunistic legal firms. Adding to
overall pressure for the upstream segment is a growing consensus that prices of polysilicon will decline this year as
supplies catch up with demand. Prices over the last few years were driven up by tight supply, from $10 to $20/kg in
2002 to $450/kg lately. But plans for production plants in China have been fast and furious, with expected production
capacity (aggregate) of about 88,000 tons.
The midstream solar segment closed down 2% this week, buoyed by a 69% gain from Powerfilm (PFLM.L). Stocks
listed abroad tended to fair much better than U.S. listed stocks, as a whole this week in the group. Year-to-date, the
group is down 35%, with Energy Conversion Devices (Nasdaq:ENER) leading the winners, up 80%.
The downstream solar segment closed up 2.81% this week, buoyed to a certain extent by the Senate passage of the
tax credit extensions. Real Goods Solar (Nasdaq:RSOL) led the group in positive territory, up 34%. Year-to-date, the
group is down 44%, with only Phoenix Solar (PS4.DE) and Premier Power (OTCBB:PPRW) in positive territory, up
8% and 4%, respectively.
The solar equipment group closed down 5% on the week, led by GT Solar (Nasdaq:SOLR), which shed 17%. Spire
(Nasdaq:SPIR) bucked the trend, closing up 6%, and Xantrex (XTX.TO) did as well, gaining 1%. Year to date, the
group closed down 17%.
The wind segment closed down 6%, led by A-Power (Nasdaq:APWR), which shed 23%. That it had such a tough
week, after announcing strong developments on each side of its business (wind and distributed power) was
surprising, and we think the stock is oversold at current levels. Stocks closing in positive territory on the week were
Keewatin (OTCBB:KWPW), Nordex (NDX1.F) and Otter Tail (Nasdaq;OTTR). YTD, the group is down 29%.
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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). |
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