NewEnergyNews: GUEST LEAD POST: WHY THE MARKET UNDER-VALUES NEW ENERGY AND OVER-VALUES ENERGY COMMODITIES

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YESTERDAY

  • Weekend Video: Bloomberg To Colbert – New Energy Is The Answer
  • Weekend Video: Global New Energy Keeps Coming On
  • Weekend Video: The Long Reach Of New Energy
  • THE DAY BEFORE

  • FRIDAY WORLD HEADLINE-Why Geoengineering Has Comes With Big Risks
  • FRIDAY WORLD HEADLINE-The Immense Potential Of Ocean Wind
  • FRIDAY WORLD HEADLINE-The Best Place To Build New Energy Is China – Survey
  • FRIDAY WORLD HEADLINE-Japan’s Mitsubishi Sees EV Price Beating Gas Cars
  • THE DAY BEFORE THE DAY BEFORE

    THINGS-TO-THINK-ABOUT THURSDAY, October 12:

  • TTTA Thursday-Big Work Now Ahead On Climate Change
  • TTTA Thursday-New Energy Ready To Take Over In The New South
  • TTTA Thursday-How The Ocean Can Store New Energy
  • TTTA Thursday-Indiana Nun Fights For Solar
  • THE DAY BEFORE THAT

  • ORIGINAL REPORTING: New Hampshire Makes A New Energy Compromise That was ‘Worth It’
  • ORIGINAL REPORTING: Survey Shows Utilities Expect New Energy Expansion
  • AND THE DAY BEFORE THAT

  • TODAY’S STUDY: Why Big Buyers Buy New Energy
  • QUICK NEWS, October 10: Why Tariffs On Solar Will Backfire On The President; Private Sector Seizes Wind Opportunity; The EV Boom Needs 1000s More Plugs
  • THE LAST DAY UP HERE

  • TODAY’S STUDY: An Alternative New Energy Plan For North Carolina
  • QUICK NEWS, October 9: Research Shows Feedback Loop Accelerating Climate Change; Solar Growth Leads The World; The Big Opportunity In Wind
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    Founding Editor Herman K. Trabish

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    Research Associate and Contributing Editor Jessica R. Wunder

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  • TODAY AT NewEnergyNews, October 16:

  • TODAY’S STUDY: How Get The Stacked Values Of Battery Storage
  • QUICK NEWS, October 16: Worse Than ‘The New Normal’; New Energy To The Rescue; How Rooftop Solar Cuts Everybody’s Power Bills

    Monday, January 26, 2015

    GUEST LEAD POST: WHY THE MARKET UNDER-VALUES NEW ENERGY AND OVER-VALUES ENERGY COMMODITIES

    Fossilized Asset Allocation Still Mis-Pricing Energy And Risk

    Hazel Henderson, January 22, 2015 (Ethical Markets via Seeking Alpha)

    Summary

    -All energy sectors are still treated alike, dominated by fossil fuels. Energy assets based on commodities: coal, oil, gas, uranium are confused and conflated with energy technology stocks.

    -Energy technology stocks in solar, wind, batteries, efficiency, hydro, ocean-based and other emerging technologies are drowned out in this oil-dominated model.

    -Oil price volatility will continue as a wild card and presents an opportunity to address today’s massive mispricing of energy and risk.

    -Disaggregation and granulation of data is needed while splitting fossilized asset allocation buckets into newer energy commodities and energy technology classifications.

    As I wrote in 2008 in Updating Fossilized Asset-Allocation Classes, all energy sectors are still treated alike, dominated by fossil fuels. This means that energy assets based on commodities: coal, oil, gas, uranium are confused and conflated with energy technology stocks in solar, wind, batteries, efficiency, hydro, ocean-based and other emerging technologies which are drowned out in this oil-dominated model. Even as oil prices fluctuate wildly, dipping below $50 in January 2015, this commodity price volatility affects both other commodities' asset values as well as highly leveraged producers and refiners, since 16% of junk bonds are energy-related. While macroeconomic effects are very real and wildly divergent between countries and sectors, this focus is on data, models and metrics. Oil prices primarily affect and misprice the energy technology players whose sunk or securitized capital costs are now producing fuel from the sun's daily photons which are free.

    Oil price volatility will continue as a wild card in 2015 and presents an opportunity to address today's massive mispricing of energy and risk. Confusion and misallocation of investments in the energy sector now can only be clarified by further disaggregation and granulation of data while splitting fossilized asset allocation buckets into newer energy commodities andenergy technology classifications while including subsidies across all energy sectors.

    ● Energy commodities should be split from other commodities - particularly food affected by unsustainable land-based biofuels. Separate "buckets" are needed for fossil-based fuels: coal, oil, gas, uranium and mining with fossil fuel-producing equipment and refining companies also treated separately. Photon-based energy captured by solar, thermal, photovoltaics, wind, ocean turbines, wave power, all of which are free after sunk or securitized capital investment, are covered by Ethical Markets and in Bloomberg New Energy Finance. These sources should be broken out for comparison with fossilized fuels and nuclear fuel (uranium).

    ● Energy capital requirements for non-renewable fossil fuel production, refining and marketing should be broken out such as by Carbon Tracker. Photon-based renewable energy should be separately tracked and accounted for - so actual comparisons can be calculated.

    ● External costs of production of all energy sources should be calculated, such as by Trucost, and stated in shadow pricing: e.g., water use comparisons between nuclear, coal, oil and gas electricity versus solar thermal, PV, wind, hydro and low-head hydro. Safety costs should also be calculated.

    ● Energy efficiency and storage technologies need separate classification to capture the real price of waste and inefficiencies. These and subsidies, calculated by energy and exergy experts, waste up to 40% of possible productivity across entire economies in the USA, China, India, Canada, Russia and Eastern European countries.

    ● Sustainability Sector - Lastly, we need a new asset allocation bucket for the burgeoning green sectors and technologies we cover in our Green Transition Scoreboard®: solar, wind, geothermal, efficiency, storage, wave power, hydro, biofuels from seawater-grown algae, electric vehicles, green infrastructure, green bonds, yieldcos and fossil-free portfolios. Such private investments since 2007 currently total $5.7 trillion worldwide. We project that these current levels of $1 trillion or more annually can leave the fossil fuel era behind by 2020 as humanity enters the knowledge richer, cleaner, greener, more equitable societies of the Solar Age.

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