Green Time

Friday, April 20, 2012

The 5 Investing Realms Of Renewable Energy - Seeking Alpha

The 5 Investing Realms Of Renewable Energy - Seeking Alpha
This article is presented here as a good synopsis of the 'players' in the public company realm of enterprises managing renewable energy projects.

The future must entail clean, renewable energy. Drilling for oil isn't sustainable and is increasingly getting dangerous as companies move offshore. Natural gas prolongs the inevitable and requires significant infrastructure changes. Nuclear energy has always been a double-edged sword from both a political and environmental standpoint. Coal remains a cigarette in the mouth of the world. As a result, there are only a few alternatives, all of which have their advantages and their setbacks. Solar energy, Biofuels, Geothermal energy, Hydropower, and Wind energy stand as the known core alternatives to the hydrocarbon-based energy standard we have today.
Investors of today may be disappointed by much of their choices when it comes to direct investment in sustainable energy. The most stable and profitable companies remain the conglomerates who derive a small portion of their profits from such sources. As for the direct players, nearly all have been victim to the latest struggles of their respective industries. Yet in each sector, there remain viable direct investments that prospective investors may wish to look into.
Solar Power. The solar industry has practically collapsed under the weight of falling subsidies and inventory dumping. The ongoing European Debt crisis casted a shadow of uncertainty in the largest market for solar. Yet renewed hope came in the form of Warren Buffett's investment into two utility-scale solar projects supplied by First Solar (FSLR). Falling solar panel prices also bode well for consumers as widespread acceptance and increasing affordability have increased the industry's demand and long-term future. First Solar remains one of the few viable investments in this sector, with its industry-leading margins that have kept the company profitable throughout the crisis.
Biofuels. The industry is trying to shake off its negative connotation to unsustainable ethanol in light of innovative and proven second generation technology. The struggle remains to be the ability to raise capital and public acceptance in order to bring online production capacity to work on a commercial scale. One of the bright shining lights in this industry remains Solazyme (SZYM), which utilizes algae-based technology to convert non-food sources into renewable oil equivalents, chemicals, food and even cosmetics. Out of companies that provide sustainable ethanol, investors may want to consider Cosan (CZZ), a Brazilian-based sugar company with leading ethanol production capacity and distribution capabilities. Especially as American ethanol subsidies have come to an end, Brazilian-based ethanol companies may continue to outshine their ethanol counterparts in America with access to cheaper input materials.
Geothermal Energy. Geothermal is practically non-existent from the public trading realm and is much smaller in size. Yet it also remains one of the more stable prospects. One of the most direct plays on the industry remains Ormat Technologies (ORA). The company was founded 1965 and remains the only vertically integrated provider of geothermal and recovered energy-based equipment.
Hydropower. Another stable industry, hydropower companies tend be utility companies governed by municipalities in light of the high capital expenditures necessary to build a dam. Brazil remains one of the greatest developers of hydropower with its vast river resources, abundant rains, and lack of alternatives when it comes to energy sources. Centrais Electricas Brasileiras (EBR), more commonly known as Electrobras, operates 29 hydroelectric plants throughout Brazil. The company remains diversified into thermal, coal and oil power generation units, however, and therefore is a far stretch from being a pure play on hydropower.
Wind Energy. The wind industry has been dominated by the Chinese market, which dethroned the United States in 2010 as the largest wind power installer. Yet publicly traded Chinese companies in America came under increased scrutiny in early 2011 that resulted in a lack of viable wind investments. The most viable investments may continue to be General Electric (GE) or Siemens (SI), neither of which are pure plays on the industry. American Superconductor Corp (AMSC) would have been a solid company to consider had the company not been victimized by China's Sinovel through corporate espionage. One of the more direct plays to consider is China Ming Yang Power Group (MY), which IPO'd on the NYSE in 2010, and stands as the largest non-state owned wind turbine manufacturer in China. The company has encountered rising expenses and difficulties including weather that interrupted installations. Yet management has initiated a share repurchase program for $50 million, which is impressive for a company currently trading with a market capitalization of $359 million as of January 23, 2012.
Disclosure: I am long FSLR, SZYM.

Monday, April 9, 2012

We Need An Aurthentic Measure of Wealth

 “Earth provides enough to satisfy every man’s need, but not every man’s greed.”
- Mahatma Gandhi

The Mismeasure of Wealth | NationofChange

Anatha Duraiappah and Partha Dasgupta

 "As a whole, humanity has achieved unparalleled prosperity; great strides are being made to reduce global poverty; and technological advances are revolutionizing our lives, stamping out diseases, and transforming communication.”

The Measure of Wealth
Despite many successes in creating a more integrated and stable global economy, a new report by the United Nations Secretary-General’s High-Level Panel on Global Sustainability 

 Resilient People, Resilient Planet: A Future Worth Choosing

 recognizes the current global order’s failure, even inability, to implement the drastic changes needed for true “sustainability.”

The Panel’s report presents a vision for a “sustainable planet, just society, and growing economy,” as well as 56 policy recommendations for realizing that goal. It is arguably the most prominent international call for a radical redesign of the global economy ever issued.

But, for all of its rich content, Resilient People, Resilient Planet is short on concrete, practical solutions.

 Its most valuable short-term recommendation – the replacement of current development indicators (GDP or variants thereof) with more comprehensive, inclusive metrics for wealth – seems tacked on almost as an afterthought.

Without quick, decisive international action to prioritize sustainability over the status quo, the report risks suffering the fate of its 1987 predecessor, the pioneering Brundtland Report, which introduced the concept of sustainability, similarly called for a paradigm shift, and was then ignored.

Resilient People, Resilient Planet opens by paraphrasing Charles Dickens: the world today is 

“experiencing the best of times, and the worst of times.” 

As a whole, humanity has achieved unparalleled prosperity; great strides are being made to reduce global poverty; and technological advances are revolutionizing our lives, stamping out diseases, and transforming communication.

On the other hand, inequality remains stubbornly high, and is increasing in many countries.  

Short-term political and economic strategies are driving consumerism and debt, which, together with global population growth – set to reach nearly nine billion by 2040 – is subjecting the natural environment to growing stress. 

By 2030, notes the Panel, “the world will need at least 50% more food, 45% more energy, and 30% more water – all at a time when environmental limits are threatening supply.”

Despite significant advances in the past 25 years, humanity has failed to conserve resources, safeguard natural ecosystems, or otherwise ensure its own long-term viability.
Can a bureaucratic report – however powerful – create change?
Will the world now rally, unlike in 1987, to the Panel’s call to “transform the global economy”?
In fact, perhaps real action is born of crisis itself. As the Panel points out,it has never been clearer that

 we need a paradigm shift to achieve truly sustainable global development.

The 2010 Report by the Commission on the Measurement of Economic Performance and Social Progress echoed the current consensus among social scientists that 
we are mismeasuring our lives by using  per capita GDP as a yardstick for progress. 

We need new indicators that tell us if we are destroying the productive base that supports our well-being.

...working to find these indicators for its “Inclusive Wealth Report” (IWR), which proposes an approach to sustainability based on natural, manufactured, human, and social capital. provide a comprehensive analysis of the different components of wealth by country, their links to economic development and human well-being, and policies that are based on social management of these assets.

The first IWR, which focuses on 20 countries worldwide, will be officially launched at the upcoming Rio+20 Conference in Rio de Janeiro.

Preliminary findings will be presented during the Planet under Pressure Conference in London in late March.

The IWR represents a crucial first step in transforming the global economic paradigm, by ensuring that we have the correct information with which to assess our economic development and well-being – and to reassess our needs and goals. 

While it is not intended as a universal indicator for sustainability, it does offer a framework for dialogue with multiple constituencies from the environmental, social, and economic fields.

The situation is critical. 

As Resilient People, Resilient Planet aptly puts it, “tinkering around the margins” will no longer suffice – a warning to those counting on renewable-energy technologies and a green economy to solve our problems. 

The Panel has revived the call for a far-reaching change in the global economic system.


ABOUT Partha Dasgupta

Partha Dasgupta is Professor of Economics at the University of Cambridge and Fellow of St. John's College, Cambridge. His most recent book is

"Human Well-Being and the Natural Environment".