Notes from GREEN TEACH MEDIA

» It notes that Grupo Enerpro, a privately held Spanish company, developed and connected the country´s first unsubsidizes 1 megawatt utility-scale solar proyect to the grid, and it plans to develop ten more projects in 2014.»

 

The difference in the cost of electricity generated using solar power and electricity generated through conventional sources such as coal or natural gas also varies across regions,”it notes.

“HSBC equity research analysts believe that without considering the favorable effects of policies and supportive
schemes, several states in the U.S. and markets in Europe have already reached retail grid parity.”

It notes that Grupo Enerpro, a privately held Spanish company, developed and connected the country’s first unsubsidized 1 megawatt utility-scale solar project to the grid, and it plans to develop ten more projects in 2014.

It also noted supportive policies in the world’s three biggest economies — the U.S., China, and Japan — and in some
key emerging markets such as Brazil, Peru and Chile.

Brazil recently conducted its first “solar auction” that allocated 123 MW of capacity at an average price of $97.80 per MWh; Peru has mandated solar for 500,000 off-grid homes by 2016; and Chile is the host of numerous largescale solar projects, including the world’s largest “merchant” solar plant — a project built to sell electricity into the open market.

Despite allthis, HSBC says solar stocks still look attractive and offers an upside potential of 61 percent based on long-  term relative price. In the graph below, the red line shows the potential upside on its trend-adjusted price earnings estimates, while the gray line shows the upside based on its price-to-book valuations. Both are key metrics in the world of financial analysts.

 

greentech1

 

HSBC says another key factor is that finance for the solar market and the deployment of modules are both being facilitated by the issue of “green bonds” and the floating of numerous YieldCos, which offer attractive rates of return for investment in solar projects.

The solar market is forecast to grow 16 percent a year, and the twelve-month forward consensus earnings growth forecast for Global Solar is 87 percent. HSBC notes that while in 2013, its climate change index was dominated by the energy efficiency and energy management subsectors, it is the low-carbon energy production index that has taken the lead in 2014.

Apart from solar, the wind index has delivered a return of 16.5 percent so far in 2014, while other renewables including the categories Diversified Renewables and

Hydro/Geothermal/Marine are up 9.9 percent and 8.9 percent, respectively.

 

greentech2

 

 

Spain´s first unsubsidized utility-scale 1Mw solar plant (ENERST&YOUNG)

«Grupo Enerpro has completed Spain´s first unsubsidized utility-scale 1Mw solar plant, and it plans a furhter 10 projects this year» That will also forgo any public subsidies. In another first, October saw the inauguration of Spain´s first offshore wind installation, a 5MW prototype installed by Spanish developer and manufacturer Gamesa off the island of Gran Canaria.

 

Competitive bidding programs, subsidy reductions and unsubsidized projects continue to signal a shift away from fixed tariff support , while energy policy reviews have started to move beyond Europe.

 

 

Captura2

 

 

Notes from NEW ECONOMY

» It notes that Grupo enerpro, a privately held Spanish company, developed and conected the country´s first unsubsidized 1MW utility-scale solar proyect to the grid and it plans to develop 10 further proyects in 2004.»

 

HSBC says there are a bunch of reasons for solar’s strong showing: a combination of favourable policy initiatives in key markets, increased investment flows (public market investment doubled to $US6.3 billion in 2013) , and stabilisation of prices of solar panels and attractive valuations. All of which have contributed to a supportive base for investors.

The over-riding theme – though – is that of grid parity. As HSBC notes, the price of solar continues to move further towards
grid parity – at utility scale, not just at the socket – in many regions, making the technology more affordable and viable with
less support from governments. That means it can continue to grow even when subsidies are finally removed.

 

 

cuadro

 

 

Despite all this, HSBC says solar stocks still look attractive – and offers an upside potential of 61 per cent based on long term relative price. In the graph to the right, the red line shows the potential upside on its trend adjusted price earnings estimates, while the grey line shows the upside based on its price-tobook valuations. Both are key metrics in the financial analysts world.
HSBC says another key factor is that finance for the solar market and the deployment of modules is being lubricated by the
issue of “green bonds” and the floating of numerous “yield companies”, which offer attractive rates of return for investment
in solar projects. The solar market is forecast to grow 16 per cent a year, and the 12-month forward consensus earnings growth forecast for Global Solar is 87 per cent; driven mainly by 247 per cent earnings growth forecast for Asia Pacific ex Japan and 153 percent for the Asia-Pacific.

HSBC notes that while in 2013, its climate change index was dominated by the energy efficiency and energy management
sub-sectors, it is the low carbon energy production index that has taken the helm in 2014.
Apart from solar, the wind index has delivered a return of 16.5 per cent so far in 2014, while other renewables including
Diversified Renewables and Hydro/Geothermal/Marine are up 9.9 per cent and 8.9 per cent, respectively.

 

 

 

Finally, Australian readers might be wondering, where is the opportunity for investors in Australian stocks? Well, good luck with that. No Australian stock marked the HSBC solar index. In fact, no Australian stock makes the HSBC climate change index – despite the fact that the Asia-Pacific region is the fastest growing, and best returning geographical region of its global index. As an investment slogan it might best be described as “Missed the Boat.”

 

recorte3

Unsubsidized solar power gives it a go in spain (EARTH TEACHLING)

Unsubsidized solar power gives it a go in spain

Spain’s recent history with solar power has been nothing if not tumultuous. Generous subsidies created a booming market in2008(http://online.wsj.com/news/articles/SB125193815050081615), but the economic crisis brought a quick end to that. And nowthe country is pulling the rug out (http://nytimes.com/2014/01/06/world/europe/spains-solar-pullback-threatenspocketbooks.html) from under thousands of solar producers, many of them small, whose financing depended on the promise of those generous subsidies.

So is it a completely hopeless mess? Greenpeace says it might not be. The organization is pointing to a new utility-scale plant in Seville
that is going into service “getting the same reward as any conventional power plant,” with “no subsidy, no feed-in tariff.”

 

solar_0

 

Jose Luis Garcia, who focuses on climate and energy for Greenpeace Spain, said in a recentpiece(http://www.greenpeace.org/newzealand/en/blog/subsidy-free-solar-takes-off-in-spain/blog/48113/) that the economics of solar power have indeed shifted – in a good way.

“Solar energy is running through its learning curve much quicker than anyone could have anticipated,” Garcia wrote. “Andsubsequently, the need for new plants to get economic support has become lower and lower. Today a solar panel costs some 80 percent less than just five years ago to yield the same power. And costs are projected to lower by another 50 percent by 2020.”

According to data from Red Electrica de Espana [PDF(http://www.ree.es/sites/default/files/downloadable/preliminary_report_2013.pdf)], there
was 4,681 MW of solar PV capacity in Spain as of the end of 2013, and it generated 8,937 gigawatt-hours of electricity, or 3.2 percent of total electrical demand. Another 2,300 MW of solar thermal provided 4,554 GWh, or 1.8 percent of the total demand. Wind made up 20.8 percent of total demand, so a boost in solar PV would help Spain balance its renewable portfolio.

The Seville plant is big but not huge – 2.5 megawatts. But the company behind it, Enerpro (http://english.grupoenerpro.es/), has a roster of 1-MW projects lined up in the near term that will total another 12 MW , along with more ambitious projects planned for further down the road.

Meanwhile, Greenpeace says the Spanish grid operator is sitting on 40,000 MW of planned PV plants that “are waiting or procedural green light to access the grid, while their investors are valuing the fact that electricity from the new PV plants can now compete in the market without any support system to make the investment profitable.”

Whether that will come to pass or not in the topsy-turvy Spanish solar market, well, we’ll be watching closely to see. If it does, it will be
a strong, positive signal for solar’s long-term future, in Spain and elsewhere in Europe.

Notes from FORBES

 «In Spain, for example,  Project developer Grupo Enerpro, has just connected to the grid the conuntry´s first utility-scale solar farm to be built without public subsides.»

 

Last week in New York, the information provider Bloomberg (/companies/bloomberg/) unveiled a new product, a tool to allow investors to calculate how much of their money is tied up in assets that are “stranded” because they are carbon-intensive and therefore likely to be hit by tighter regulations, carbon prices or other constraints.

The move reflects the increasing concern of investors that climate change, and in particular the measures that governments will take to tackle it, could create a whole new class of stranded assets. The danger is that the coal, oil or gas reserves that make up the bulk of some companies’ valuations are not as valuable as companies or investors think because they will not be allowed to exploit them.

 

At the macro level, the International (http://www.forbes.com/international/) Energy (http://www.forbes.com/energy/) Agency’s World Energy Outlook 2013 (http://www.worldenergyoutlook.org/) highlighted the danger – current energy consumption puts the world on course for an increase in average temperatures of 3.6°C, far in excess of the 2°C the international community is aiming for. To have any hope of meeting the 2°C, we need to leave two thirds of current fossil (/companies/fossil/ FOSL +1.26%) (/companies/fossil/) fuel reserves underground, the IEA says.
[dt_gap height=»10″]

 

The organisation also continues to highlight the unsustainability of the world spending half a trillion dollars a year to subsidise fossil fuel use, mostly in the Middle East, Africa and Asia. These subsidies lead to fossil fuels being used wastefully. At the Brussels launch of the WEO, Fatih Birol, chief economist of the IEA, berated countries in the Middle East that burn oil to generateelectricity, calling the practice “an economic crime” because it is such a waste of money. “It is like using Chanel (/companies/chanel/) perfume to fuel your car,” he pointed out

A pledge by the G20 nations to phase out these payments has had little impact so far, but pressure is building as the true cost to economies and government finances becomes apparent. The growing focus on the costs of subsidising renewable energy also, somewhat paradoxically, heaps more pressure on coal, oil and gas subsidies (and nuclear subsidies, for that matter). Renewables subsidies are doing their job – the cost of the technology is falling and levels of support are decreasing along with it, raising some difficult questions for those that insist that support is still needed for fossil fuels.

While the total cost of renewables support is set to increase as more capacityis rolled out, the cost per unit of energy is falling rapidly and already in some places, wind and solar energy are approaching cost competititiveness with more traditional forms of fuel. In Spain, for example, project developer Grupo Enerpro, has just connected to the grid the country’s first utility-scale solar
farm to be built without public subsidies, while it was reported earlier this year that it is cheaper to build new wind energy capacity than new coal-fired power stations in Australia.

Meanwhile, in Shanghai, a more immediate threat became obvious as officials warned children and the elderly to stay indoors for seven of the first nine days of December because of the dangers to health of the choking smog enveloping the city. Neither the Chinese people nor their government are going to stand for such conditions for any length of time, meaning a clampdown on coal-fired power stations in the world’s biggest coal user is all but inevitable.

The main crutch for traditional sources of energy is that only they can provide the continuous baseload power that is
needed to keep the lights on. While that is true today, more or less, power stations are built to last three or four decades.
Think back 30 years to 1983. The first mobile phone commercial mobile phone had just been introduced. There
was no internet and no electric vehicles except for milk floats (in Europe) and golf buggies (the US). Technologies
that are now obsolete, such as DVDs, were still more than a decade away from being invented. The Berlin Wall was still
going strong and Nelson Mandela would have to wait more than a decade before tasting freedom. Go back a further 10 years and the world was only just getting to grips with the first oil crisis.

A lot can change in 30 years. Look at the technologies and policies that we have now and that could be perfected in years to come that could render coalfired power or petroleum-fuelled cars obsolete. It’s not just renewable
technologies such as wind and solar – there’s smart grids, buildings and appliances, electric (and maybe hydrogen fuel cell) vehicles, energy storage and any number of energy efficiency options.

On the policy and regulation side, there’s carbon markets, renewable portfoliostandards, carbon taxes, emissions limits and green bonds.

It is no surprise that a number of the world’s largest companies – including the world’s biggest oil companies – are already factoring in a carbon price of up to $60 per tonne when they consider their future investment plans.

And it is understandable that some investors are nervous about the prospects for fossil fuel assets being able to continue to provide a return in 2040 and beyond. Bloomberg’s move reflects the fact that investors increasingly want to know the carbon exposure of their portfolios – according to the Asset Owners.