NewEnergyNews: TODAY’S STUDY: SOLAR WHEELING AND DEALING DOWN IN Q3

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Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The new challenge: To make every day Earth Day.

YESTERDAY

  • FRIDAY WORLD HEADLINE-A NEW WAY TO SEE CLIMATE CHANGE
  • FRIDAY WORLD HEADLINE-EU OCEAN WIND TO CUT COSTS, KEEP GROWING
  • FRIDAY WORLD HEADLINE-COST-COMPETIVE NEW ENERGY, GERMANY’S ‘GIFT TO THE WORLD’
  • FRIDAY WORLD HEADLINE-NEW ENERGY MATCHES COAL ON COST, CAPACITY IN TURKEY
  • THE DAY BEFORE

    THINGS-TO-THINK-ABOUT THURSDAY, November 20:

  • TTTA Thursday-TOP REPUBLICAN DROPS CLIMATE DENIAL
  • TTTA Thursday-FORD ELECTRIC CARS FOR ‘THE MASSES’
  • TTTA Thursday-MIDWEST SOLAR MAKES SENSE AND CENTS
  • TTTA Thursday-NEW ENERGY JOBS BY THE BAY
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    GET THE DAILY HEADLINES EMAIL: CLICK HERE TO SUBMIT YOUR EMAIL ADDRESS OR SEND YOUR EMAIL ADDRESS TO: herman@NewEnergyNews.net

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    THE DAY BEFORE THE DAY BEFORE

  • THE STUDY: THE MIDWEST GRID IS READY FOR 40% NEW ENERGY
  • QUICK NEWS, November 19: OHIO NEW ENERGY JOBS REPORT SUPPRESSED; SOLAR GIANT BUYS WIND DEVELOPER; BUSINESS TO MAKE IT BIG IN SMART CITIES
  • THE DAY BEFORE THAT

  • THE STUDY: THE NEW ENERGY LIFE-CYCLE CUTS EMISSIONS
  • QUICK NEWS, November 18: U.S. TAKES WORLD LEAD IN WIND; SOLAR TO SHOW MISSOURI JOBS; WAVE ENERGY ROLLING SLOWLY IN
  • AND THE DAY BEFORE THAT

  • THE STUDY: A NEW TAKE ON THE COSTS AND BENEFITS OF SOLAR
  • QUICK NEWS, November 17: BIG TEST FOR SOLAR ROADS KICKS OFF; FORD TURNS TO NEW ENERGY; ADVANCED BATTERY SUPPLY CHAIN TO TRIPLE
  • THE LAST DAY UP HERE

  • Weekend Video: Hearing From Idiotic Idiots And Others
  • Weekend Video: The Aussies Say It Plainly
  • Weekend Video: Living In The Wasteland Of The Free
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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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  • Monday, November 05, 2012

    TODAY’S STUDY: SOLAR WHEELING AND DEALING DOWN IN Q3

    Solar Funding and M&A Q3 2012 Report

    October 2012 (Mercom Capital Group)

    Introduction

    Venture capital (VC) funding in the solar sector in Q3 2012 was down to its lowest levels since 2008. VC funding amounted to only $72 million in Q3 2012 in 14 deals compared to $376 million in 32 deals in Q2 2012. VC deal size was also much smaller, the largest being just $15 million.

    The leading VC deal this quarter was concentrating photovoltaic company SolFocus with $15 million. At the end of Q3, most of the year-to-date VC funding went to solar downstream ($258 million) and thin film companies ($246 million).

    Only 26 investors participated in the 14 deals in Q3, and only New Enterprise Associates was involved in multiple deals.

    Underlying Trends: Global solar installations have been growing remarkably, from just 7 GW in 2009 to a forecasted 29 GW by the end of 2012, fueled by significant drops in polysilicon prices from around $200/kg in 2009 to approximately $19/kg currently, as well as drops in prices of Chinese c-Si PV modules from about $3.00/W in 2009 to current prices of approximately $0.65-0.70/W. Not to mention loans, credit facilities and frame work agreements of about $50 billion received by Chinese manufacturers from state owned Chinese banks, which has led to unbridled capacity expansion resulting in chronic oversupply, further fueling the drop in prices.

    Meanwhile, billions of dollars in venture funding has gone into some very large thin film, CSP, and CPV companies over the last few years:

    • 2010 – BrightSource Energy $176M, Amonix $129M, Stion $70M, Abound Solar $110M;

    • 2011 – BrightSource Energy $201M, MiaSolé $106M, Alta Devices $72M, SoloPower $52M, Stion $130M;

    • 2012 – MiaSolé $55M, Nanosolar $70M and $20M.

    Over $1 billion in VC funding has gone into thin film (primarily CIGS) companies alone since 2010. While these deals may have made sense when c-Si panels were $3-4/W and polysilicon was in the $200-300/kg range, the quick and steep fall of c-Si prices have put crushing pressure on thin film companies as well as CSP and CPV companies. However, VCs saw CIGS as one of the last few areas with promise to compete for market share.

    Having already invested heavily in CIGS, and no near-term exits in sight, many VCs were doubling down and seeing their investments through commercialization in the hopes that they will be competitive once they start shipping.

    The recent MiaSolé acquisition for $30 million by Chinese renewable company Hanergy frames the current challenge faced by VCs and companies as well. After approximately $500M in funding, MiaSolé was acquired for $30M – a very bad result.

    Our Bankruptcy and Restructuring sections reflect the current market environment. This year alone, we have tracked approximately 22 solar bankruptcies and 42 restructuring and downsizing announcements so far.

    Solar Lease – A Bright Spot: Solar third party finance firms (solar lease/PPA firms) have been the bright spot this year. About $1 billion in solar residential and commercial lease funds have been raised just in Q3 2012, and almost $2 billion in 2012 YTD. Some of the notable third party finance firms include: SolarCity, SunRun, SunPower, Sungevity, OneRoof Energy, Clean Power Finance, and Enfinity among others. Active investors in these funds in 2012 include: Credit Suisse, Rabobank, Wells Fargo, Citi, and U.S. Bancorp. In a move that highlights this trend, SolarCity filed to raise more than $200 million in an IPO on October 5.

    There were 12 corporate M&A transactions in Q3 2012, totalling $393 million with only four of them disclosing amounts. Two of these transactions, Q.Cells and MiaSolé, were distressed sales. German solar cell and module manufacturer Q.Cells was acquired by Korean conglomerate Hanwha Group for $322 million ($50 million and $272 million debt assumption). Chinese vertically-integrated manufacturer JA Solar acquired a 65 percent stake in Hebei Ningjin Songgong Semiconductor Co, a wholly-owned subsidiary of the Japanese polysilicon and wafer manufacturer M.Setek, for $39 million, and CIGS thin film company MiaSolé was acquired by the Chinese renewables company Hanergy for $30 million.

    Hanergy also acquired CIGS company Solibro a few months ago. Other CIGS strategic transactions included the partnership between Heliovolt and Korea's SK Group, and Stion and Korea's Avaco.

    A notable M&A transaction this quarter was the acquisition of Vivint by Blackstone Group for $2 billion. Included in the transaction was the Vivint Solar division, a third party solar finance lease firm. The valuation of Vivint Solar on its own is unknown.

    With the current success of solar lease firms, it remains to be seen if more security/home automation companies who already have access to millions of homes will also jump into the solar lease business.

    VC Funding

    There were 14 VC funding deals in the third quarter of 2012, of which 13 disclosed funding amounts.

    VC Funding by quarter

    VC investment in Q3 2012 came to a paltry $72 million in 14 deals, compared to $376 million in 32 deals in Q2 2012.

    VC Funding by technology by quarter

    PV companies led VC funding this quarter with $25 million in four deals.

    VC Funding by technology 2011-12 (YTD)

    Solar downstream companies have received $258 million in 20 deals, closely followed by thin film companies with $246 million in 14 deals. BOS companies continue to lag in VC funding, although these could be strong drivers for cost reductions and improved efficiencies.

    VC Funding by stage

    In Q3 2012, the average VC deal size in solar was $5.1 million in 14 deals. In comparison, the average deal size was $6.7 million higher in Q2 2012 with an average of $11.8 million in 34 deals.

    Looking beyond the spikes created from some very large deals (Q2 2010 - BrightSource Energy, $176M; Solyndra, $175M; Amonix, $129M, Stion, $70M, Fonroche $66M, Enphase $63M, SunRun $50M; Q1 2011 - BrightSource Energy, $201M; MiaSolé $106M; Alta Devices $72M; SoloPower $52M; Q4 2011 - Stion $130M; Kiran Energy $50M; Sunpreme $50M; Q2 2012 - NanoSolar $70M, SunRun $60M), the average deal size has trended downward to $5.1 million from $15.2 million since 2010.

    VC Activity by country

    The United States continued to be the leader in venture capital funding, accounting for $62 million out of $72 million in Q3 2012. The United States also led in the number of deals with 12 out of 14.

    Large-Scale Project Activity

    Large-scale project funding announced in Q3 2012 amounted to $1.1 billion in 15 deals compared to $1.4 billion in Q2 2012.

    Large-Scale Project Funding by technology

    There were 15 large-scale project funding announcements in Q3 2012, 13 of them were PV for a combined $1.1 billion. Thin film accounted for $57 million.

    Top 5 Large-Scale Project Funding Deals

    The top announced large-scale project funding deals included $500 million raised by LS Power for its 170 MW Centinela Solar PV Project in California, $227 million raised by Northland Power for the six Ontario projects totaling 60 MW in Canada, and $116 million raised by Sonnedix for the 24 MW Toul 3 Solar Plant. Other significant projects funded were Borrego Solar Systems’ eight solar projects totaling 18 MW with $64.4 million, and Welspun Energy’s Rajasthan 50 MW PV Project with $60.6 million raised.

    Residential/Commercial Solar Project Funds

    The solar lease model has continued to be popular especially in the United States, and has attracted over $1 billion in this quarter alone, helped by a falling solar risk profile. It has been one of the primary drivers of residential installations in California and is now spreading to other states.

    Debt Funding

    Announced debt funding for solar in Q3 2012 amounted to $225 million in six deals compared to $2.3 billion in 15 deals in Q2 2012.

    Debt Funding Transactions

    China Development Bank (CDB) continues to be active in providing debt to solar companies. This quarter CDB deals included $93.8 million to Canadian Solar which will be used to partially finance a previously announced $187 million acquisition of a majority interest in 16 solar projects in Ontario. CDB also announced a loan of $32 million for Chinese solar manufacturer Suntech.

    Mergers and Acquisitions

    There were 12 M&A transactions in Q3 2012 amounting to $393 million with only four disclosing transaction amounts.

    The largest disclosed M&A transaction was the acquisition of Q-Cells, a manufacturer of solar cells and modules, for $322 million by Hanwha. Hanwha will only pay $50 million in cash to Q.Cells, but it will also assume about $272 million of debt. Other disclosed transactions involved the acquisition of a 65 percent stake in Hebei Ningjin Songgong Semiconductor Co, a wholly-owned subsidiary of the Japanese polysilicon and wafer manufacturer M.SETEK (controlled by AU Optronics) for $39 million by Chinese vertically-integrated manufacturer JA Solar; the acquisition of CIGS thin film company MiaSolé by Chinese renewable energy company Hanergy for $30 million; and acquisition of a 56 percent stake in solar installer Premier Power Renewable Energy for $1.8 million by Gascom Renew.

    Project M&A

    Solar project M&A activity came to $777 million in 17 transactions in Q3 2012, compared to $437 million in 19 transactions in Q2 2012. Only eight transactions disclosed amounts.

    Top 5 Project M&A Transactions

    Top solar project M&A transactions included the two PV plants (92 MW total) acquired from GCL-Poly Energy by Consolidated Edison for $266 million, followed by Aviva’s acquisition of the HomeSun’s solar rooftop systems portfolio (23 MW total) for $156 million. Other top transactions were EDP-Energias de Portugal’s acquisition of 60 MW of Romanian solar projects for $154 million, Avelos’ acquisition of 30 PV (30MW) plants from Aion Renewables for $61 million, and Stonepeak Infrastructure Partners’ acquisition of the Canadian Solar 1 Project from Canadian Solar for $48.4 million.

    1 Comments:

    At 1:50 AM, Blogger Logan J. Skew said...

    the info is showing that sales are going down in Q3 as compared to Q2 of 2012

    Buy Solar Panels in Ontario

     

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