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July 2008 Archives
Never underestimate the ability of the marginal exciting stuff to generate PR ! Trina Solar, is supplying wing-loaded solar cells (I never thought I'd ever write that !), for a small 2 seater electrically powered aeroplane to be built by France-based Lisa Airplanes. See this French language site here - way better than the English one - for an idea of what it would be like. And here's a picture; It will be called the Hy-Bird. Basically, the same aircraft with solar panel wings. On a separate note, I've been experimenting with a plug in 1.5w solar panel on my, "ordinary-priced car" ! that connects straight into my cigarette lighter while sitting on the dashboard. The first observation is that the car starts much more quickly when I turn the key. The second is that when I remove the keys from the ignition, if the sun is still shining, the stereo keeps working ! That's why I suspect there's a lot more scope for small solar panels to become standard in vehicles tomorrow in much the same way that airbags are today, rather than an explosion of - albeit fascinating - aircraft like these.
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Quite a few media organisations around the world picked up this story in the New Scientist on the latest progress being made in LSCs - basically a newish way of trapping light photons and chanelling them using a waveguide to displace electrons on the cell and hence create direct current electricity. Some researchers at MIT however have come up with a couple of improvements; i) Getting rid of the plastic substrate and replacing it with a sprayed onto glass mixture of dyes combined with a substance called
tris(8-hydroxyquinoline) aluminium which is used as the waveguide. This typically captures high energy light like UV and leads to higher efficiency as less light escapes. ii) Adding a second sandwich of dye and glass over the first - this traps longer wavelengths that have passed unperturbed through the top level and any lower-energy light that has been re-emitted within
the top layer and somehow escaped. The Economist, uncharacteristically, gets pretty excited and says; The upshot is a device that, even as a prototype, converts ten times
more of the incident light into electricity than a conventional solar
cell. Meanwhile, the BBC, gets even more carried away, confusing light with (highly marginal) incidental light and says A new way of capturing the energy from the Sun could increase the power generated by solar panels tenfoldSo it falls to the New Scientist to fill in two crucial missing bits; Based on experiments, the team calculates that the power conversion
of the prototype would be about 6.8% efficient, about the same as
commerical cells made from amorphous silicon. But Baldo believes that
with various improvements, the technique could eventually reach an
efficiency of more than 20%. So in other words, they've moved from highly inefficient to very inefficient. The 20% figure we can write off because that's a bit like saying, theoretically, it will be possible to capture 57% of the sun's energy for solar power, one day. Some of us though, live in the present and have an eye on the near future and should resist grand futuristic visions.
The second point, the killer fact iny book is this; Although the new dyes are not as fragile as the ones used in the 1970s, they still have a lifetime of only about three monthsSo to get a return on this application, the value of the power it generates has to exceed its financial input in less than 3 months. I'd be staggered if this ever happens, anywhere, in the 21st Century ! It just goes to show, reading one source of information on one event will never give you the full picture. We can all so easily see what we want to see rather than how it really is. Optimism can work against you as well as for you. So don't hold your breath - this particular solar news story is interesting, but not a breakthrough.
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As I reported in my newsletter last week, Tanfield Group has had a pretty catastrophic decline of late. And yet clearly, there are plenty of people snapping up shares. Today so far, it is up 40% and yesterday it was up 45%. It has probably got a lot to do with the Chairman, Roy Stanley, buying 8 million shares.
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A recent report by NanoMarkets suggests that the growth rate of thin film solar pv, will continue to outshine the rest of the solar sector. They predict that the thin-film photovoltaics (TFPV) market will produce the equivalent of 26
gigawatts (GW) by 2015 and will generate well over $20 billion in
revenues in that same time frame. What's particularly interesting is that the report points to cadmium telluride as being the fastest growing part of this niche and will be the largest part of this niche - with $8.7 billion in sales. A few years ago, I was pretty dubious about the prospects for thin-film. Ok, it cost less, was flexible, often expensive polysilicon-lite or free, less weighty and easier to install. On the other hand, it worked at lower efficiency, typically half, so you'd need to buy twice as much of the stuff by surface area to get the same power output, which in my books made it a non-solution. Still, all of those factors can't be decisive if it continues to grow so fast. Having said that, if I was to put my sceptical hat on, the thin-film report writing business seems to be a very popular one right now - shades of the fuel cell report business in the late 90s or even the mobile phone WAP business technology market that somehow never, ever, appeared. This report published last month by EUPD Research concluded that " . . . less than 50 percent of the 60 companies that have announced their
intention to start commercial thin film production by 2010 will keep
the timeline". And they have a point. As with any forecast, the further it goes out into the future, the more likely it is to be wrong. Both demand and the pace of technological change are slippery customers. That's why one can justifiably have more confidence as a cautious investor in the near forecasts, out to 2 years, than the longer ones, 2- 10 years.
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Not the least bit put off by quality control issues of its wind turbines in America, Suzlon continues to be on a mission to gain market share through acquisition and foreign expansion. The latest news is that the firm has just bought a $500 m stake in the Chinese wind development company, Honiton Energy Holdings. They also plan to develop wind farms on five separate areas in China, representing a
total of 2,244 square kilometres to develop 1,650 MW by 2012. Indeed, according to the same article, Suzlon's financial partners will spend another $2 billion by 2012 to develop a 1,650 megawatt
portfolio of wind farms in the Inner Mongolia region of China. This strikes me as shrewd for three reasons; i) Chinese assets when priced in dollars are going to look a lot more valuable before long because an upwards revaluation of the renminbi has to be on the cardsii) China is now the world's second biggest wind market - at 17% - and the targets for wind energy if anything, are increasing. According to the same article, a staggering 38.5 GW is to be added between 2008 and 2012. A couple of years ago, approx. 40 GW was the target for 2020. The Chinese government would much rather see this business go to a home company, or at least a joint venture than a totally foreign one. iii) Mongolia. Because it is such a windy place, Mongolia, or more specifically, inner Mongolia, accounts for 40% of China's wind potential. And it's a lot more exploitable than the 40% figure usually bandied about for the UK. The oft-repeated claim that the UK has two-fifths of Europe's wind potential usually comes with the omission to mention that it is mostly offshore. Suzlon with this purchase is getting in to the onshore Mongolian market - arguably, the ultimate sweetspot of the nascent Asian wind boom.
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Some of my confrères in the alternative energy business will tell you that the high oil price is a great thing for the industry. Of course, they're largely right. If the oil price had instead fallen from $10 per barrel to $2 today from 1999, I doubt this and many other websites would exist. No question, higher oil prices do mean people do tend to look more closely at what the alternatives are and whether they can save money using them. Although we should not overlook completely that the oil business is even more motivated to keep drilling because in the face of excess demand and limited supply, the margins have never been higher. Yet there's another much darker consequence of unaffordable energy - increased criminal temptation and activity. Which brings me the most novel alternative energy story of the week. Apparently, in the UK, the price of used cooking oil has risen 10 times in the last 5 years to £550 per tonne. That's because make your own biodiesel kits - see here - are increasingly available and making it cheap to run your vehicle on used cooking oil. Time was when restaurants couldn't even give the grease away. No more. In fact, now restaurants and fast food joints are having their used cooking oil drums stolen from them ! There just isn't enough used cooking oil to go around and to recoup the investment on your £1000 home biodiesel kit, you would presumably need quite a lot of the stuff. Added to that the reforming zeal of various green-minded middle-class campaigners railing and largely getting their way against blue collar fast food chains and you get a classic and complicated unintended consequence from oil at over $140 per barrel - increased waste and CO2 emissions !
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See here for details and sign up if you haven't already, it's free. No question, this has been one of the toughest months for alternative energy stocks since I began this site - we do seem to be in some kind of a global bear market. I thought it would be interesting to contrast the prices with my earliest newsletter from the start of 2007; - Oil was less than $60 which seems a world away now when we are clearly over $140 a barrel.
- The Wilderhill Clean Energy Index was at 182, not so different to now, just over 200
- Ethanol was at 2.080 compared to 2.917 now
- Corn was at just over 400 compared with 754 now
June and the year to date has also seen spectacular winners and losers. Notably Quantum Fuel Systems Technologies Worldwide (up 510.42% ytd) and Tanfield Group currently down about 80%. Read more in our latest newsletter, here.
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I was quite disturbed the other day to learn from the FT Energy Survey the other day, that the price per megawatt of wind turbines is continuing to climb. As the article says;
Shai Hill, division director of climate change at Macquarie Capital
Securities, predicts that the price of turbines - which
has risen by more than a third in the past two years to about £1.5m -
will rise by 10 per cent this year and with a rise of the same amount
expected next year. This is even without taking into account
rising steel prices - most turbine manufacturers build a clause into
their supply contracts stipulating that steel price rises can be passed
on to customers.Steel prices by the way, have risen six times since 2000. To get some idea of how big a jump in the installation per megawatt cost of wind turbines we've had over the last few years, take a look at this paper " European Wind Power: Thar she blows !" published by Augusta Finance in April 2003. Back then, the price was EUR 1 million per megawatt - which was itself a big fall from EUR 1.7m per megawatt in 1996. For those of you who think more readily in dollars, it's even worse. In April 2003, the EUR:USD exchange rate was around 1.04 rather than the 0.63 you get now. So you could say since 1996, we've followed a V-shaped curve - wrongly assuming it would continue - and have had a rough ride on the way up. The big question is though, when will prices come down again? Well, on the face of it, if Mr Hill's forecast is correct, you'd have to say, not for a few years. All of this makes me think that the wind farms erected in 2003 at 2003 costs, now selling into record highly priced electricity markets, must be the most profitable wind assets out there.
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