QUICK NEWS, February 23: NEW ENERGY COULD CONSOLIDATE; MONEY FOR NEW ENERGY, THE OUTLOOK; GERMANY SPEEDS F-I-T CUT

NEW ENERGY COULD CONSOLIDATE
Clean energy set for consolidation says E&Y
Nina Chestney (w/Jason Neely), February 16, 2012 (Reuters)

"The clean energy sector is unlikely to sustain its frenzied rate of investment growth and looks set for consolidation led by Asian players [according to an Ernst & Young renewables authority]… …[The global clean energy sector drew a record $260 billion in investment in the face of the financial crisis…Driving growth are countries keen to replace fossil fuel energy with cleaner sources, but the rate of growth faces challenges]…"

[Gil Forer, head of global cleantech, Ernst & Young:] "The (renewables) space has grown dramatically in the last seven to eight years. No industry can continue to grow indefinitely at such rates, there is always a point of correction…You cannot anticipate 40 to 50 percent growth rates year-on-year indefinitely…"

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[Gil Forer, head of global cleantech, Ernst & Young:] "In developed markets you see continuous growth, although its more pressured…On the other hand, many markets in the developing world have seen increases in government commitments such as in South America, Africa and the Middle East…[I] t takes several quarters for industry to synchronize…[and] stabilize…We will see consolidation for sure and big players doing acquisitions, particularly the Chinese, Japanese and South Koreans…"

"Uncertainty about governments' renewables policies and support is having an impact on financing projects in the sector…When investors do not have a stabilized long-term horizon they do not invest…Capital is scarce right now across the board, from venture capital to project finance…[and leaders are] looking at ways to move pension money into the industry because….[for] renewable energy projects…[with] power purchasing agreements, there is not that much risk…Venture capital firms are having difficulties raising cash…[but] there are still lots of opportunities in smart grid technology, electric car technology, solar components and wind turbine niche markets..."


MONEY FOR NEW ENERGY, THE OUTLOOK
Project Finance Lawyer Offers Financing Outlook
22 February 2012 (North American Windpower)

"…[I]n the wake of some dramatic pullback by European lenders, along with continued debate in Congress whether to extend tax credits for wind farms and other alternative fuel sources…the Obama administration, hoping to reinvigorate the sector, is planning a major meeting on March 13 to deliver a pitch to the country’s largest companies about the benefits of tax-equity deals for renewable projects.

"Allan Marks, partner at Milbank, Tweed Hadley & McCloy, says now might be a good time for a renewables reality check…[but] there are some near-term bright spots…[M]ore strategic investors and other sources of funding will commit to renewable projects in coming months…Although European banks continue to step back, Marks believes that American, Canadian, and Japanese banks and funds will be stepping up financing for renewable deals…[as will] insurance companies, pension funds and other institutional investors…[and] capital markets activity in general, including private placements and other securities offerings such as project bonds…"

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"Marks agrees that tax-equity partnerships being pushed by the White House and U.S. Department of Energy could be a key factor in attracting new capital, thereby boosting the value of existing renewable tax credits, which otherwise could be squandered…He also expects more financing to come from industry vendors, especially equipment manufacturers with ample balance sheets looking to enhance their competitive share of a given market - say, solar panels. That lowers the cost of the project…

"…[T]he global market for renewable energy investment remains extremely strong…[with] still-expanding demand for power in China, Latin America, India and…Japan, which had previously put so much faith in nuclear, is now taking a more serious look at renewable energy sources in the wake of last year’s Fukushima disaster…In the U.S., renewable energy demand will actually be a boon to the gas industry…[U]tilities will turn to clean gas [to back up] renewable sources…"


GERMANY SPEEDS F-I-T CUT
Report: Germany To Accelerate Scheduled Solar Feed-In-Tariff Reductions
22 February 2012 (Solar Industry)

"Germany's environment ministry and economy ministry have developed a plan that calls for accelerating the next round of PV feed-in-tariff (FIT) reductions. Under the plan, the government will now slash FITs earlier and more deeply than was originally planned.

"…[T]he next FIT reduction will now take place on April 1 (rather than July 1 as initially scheduled) and will reduce the FIT by 20% for small roof-mounted projects and up to 30% for larger installations. The July FIT cut was scheduled to be just 15%."

This decision could impact the world solar market. (click to enlarge)

"The plan also imposes a 90% limit on the proportion of solar power that can be fed into the grid from a given plant…[T]he accelerated FIT reductions [may] threaten thousands of solar jobs and hurt installation growth in Germany.

"…[This follows the release of a new report] projecting that Germany will produce 36% of its electricity from renewable energy by 2020."