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Bluefield Bets On UK Solar Potential With Market Debut Of Fund
By Christoph Steitz FRANKFURT | Tue Jun 25, 2013 (Reuters) – Asset management firm Bluefield Partners is betting that the solar industry has the potential to grow in Britain, while taking a beating elsewhere in Europe, benefiting from favourable laws and a relatively underdeveloped market. Bluefield, which specialises in buying and managing energy and infrastructure assets, plans to list the Bluefield Solar Income Fund ( IPO-BSI.L ) on the London Stock Exchange on July 12 to raise up to 150 million pounds for the acquisition of solar plants in Britain. “The UK is in its infancy compared to markets like Germany or Italy ,” James Armstrong, managing partner at Bluefield, said on Tuesday. “We’re just going into a market that has significant growth potential.” According to figures by European solar industry association EPIA, Britain’s cumulative solar installations more than doubled in 2012 to 1.83 gigawatts. This compared with 32.4 GW in Germany and 16.4 GW in Italy , where lavish incentives for solar power have led to soaring installations over the past few years. Demand in these markets is expected to drop sharply this year, however, as governments reduce the incentives and make investment in solar power less rewarding. Armstrong pointed to favourable legislation in Britain, which said in its updated renewable energy roadmap in late 2012 that its solar market had the potential for up to 20 GW by 2020. Bluefield’s fund aims to invest the proceeds from the initial public offering within 12 months to buy solar plants that it expects will provide stable annual levels of power generation with low operational costs. Armstrong said he expected the fund to grow to about 300 million to 400 million pounds in assets over the next two to three years. Bluefield has clinched deals with British power companies including British Gas Solar, the solar contracting unit of Centrica ( CNA.L ), for exclusive access to solar projects until April 2014. The Bluefield fund will finance solar projects but not build them, reducing its operational risk. Armstrong did not want to disclose plans for concrete investments after the IPO, saying only: “We have a deep and significant pipeline.” (editing by Jane Baird) Continue reading
Carbon Trading Boosters
The world’s largest carbon emitter kicked off a pilot emissions trading scheme in the south eastern city of Shenzhen last week even as the elusive search for a fix to Europe’s emissions system continued. This is the first of the seven test markets that China hopes to roll out soon, and the smallest, with covered emission estimated at 32MTCO2e/year from 635 entities. The buyers of allowances on June 18 – the day that trading officially began – included PetroChina and Hanergy Holding Group, at prices which were about a fifth less than European Union permits on the London’s ICE Futures Europe exchange. Trading is likely to be muted during the year, but some spurt in volumes and price could occur close to the compliance date, which, according to Bloomberg New Energy Finance analysts, would be in early 2014. There is also some talk of linkages of the Shenzhen scheme with other markets, but these discussions are at an early stage. Meanwhile, there was some straight talk about the European carbon market from the executive director of the International Energy Agency, Maria Van der Hoeven. In an interview in Russia, she said the EU carbon market “doesn’t work anymore.” The attempts to make it work moved another step ahead when the environment committee of the European Parliament supported the backloading proposal. There is now a higher likelihood of it being approved in the plenary vote on July 3. Back in China, there was an interesting proposal from the city of Shijiazhuang – the capital of steel-producing Hebei province surrounding Beijing – that would control some emissions immediately. It plans to restrict the number of new vehicles to 100,000 this year, and limit cars per household to two. This quota will be cut to 90,000 in 2015, with a lottery being used to determine who can buy the cars. The Chinese government was also in the news for promising support to its solar industry, urging lenders to ease financing and pushing for industry consolidation. In an online statement, the State Council said that China must aid the industry’s “healthy development” through the current sluggish global market and slow domestic demand. It will encourage mergers and acquisitions among solar companies and curb blind expansion of capacity. It will also control the expansion of energy-intensive production to curb pollution. Chinese solar companies like Trina Solar and JinkoSolar, singed by duties on solar exports to Europe and the US, are moving production overseas. The target countries include South Africa, Turkey and Portugal. There is also another reason for production to move out of China: rising costs. US-based solar manufacturer Silevo, which produces cells at a 32MW factory in China, is in the process of financing a 200MW cell and module plant in the US. “Water and electricity in China are much more expensive than in the US, and the labour cost is very close. In terms of production cost, it’s very comparable to North America,” said chief executive officer Zheng Xu. There were two important financing announcements last week. PensionDanmark pledged $US200 million in funding for a wind farm in Nantucket Sound, in the first committed investment in Cape Wind Associates’ proposed 468MW offshore park. This will be the first offshore wind park in the US and has been 12-years in the making. The investment is conditional on a final decision this year to construct the farm. In addition to pension funds, the renewable energy sector could also see some Islamic financing. Activ Solar is tapping into that source to expand into markets in the Middle East. The company’s CEO said the predictable and steady revenue streams of solar plants could be a good fit for the growing Islamic financing market. EU carbon European carbon slipped last week after lawmakers voted – by only a small majority – in favour of a compromise plan to fix the region’s oversupplied market. European Union allowances (EUAs) for December 2013 lost 8.2 per cent over the week to close at €4.38/tonne on Friday, compared with €4.77/t at the end of the previous week. EUAs were trading as high as €4.90/t as the market opened last week. They dropped on Wednesday to close at €4.39/t after the Environment Committee of the European Parliament (ENVI) passed an amended version of the European Commission’s proposal to delay auctions of some carbon permits. The committee carried the main compromise amendments with 38 out of 69 votes. This was the same result as in an ENVI vote in February on the original backloading proposal. The bearish price reaction on Wednesday may imply that market participants required a more clear-cut signal from ENVI to justify bullish bets. UN Certified Emission Reduction credits (CERs) for December 2013 gained just €0.01/t last week to close at €0.47/t. This article was originally published by Bloomberg New Energy Finance. Read more: http://www.businesss…s#ixzz2XJdVSgQo Continue reading
BP Backs Texas Carbon Capture as Skyonic Gets $128 Million Funds
By Sally Bakewell – Jun 25, 2013 2:00 PM GMT BP Plc (BP/) part-funded an emissions project at a Texas cement plant, betting that plans to turn the gases into chemicals for sale will succeed where traditional carbon-capture proposals have failed. BP, Cenovus Energy Inc. (CVE) and other investors in developer Skyonic Corp. pledged a total of $128 million, Skyonic Chief Executive Officer Joe Jones said in Austin, where the company is based. It plans to trap 83,000 metric tons of carbon dioxide a year from Capitol Aggregates Inc.’s plant in San Antonio . Skyonic expects to profit from global efforts to curb industrial emissions by trapping and “mineralizing” CO2 into byproducts such as hydrochloric acid and baking soda. While countries including the U.S. and Britain have sought to capture carbon from power plants for burial underground, such projects are yet to operate on a commercial scale. “It signals to the whole world that we have another alternative for carbon capture besides the pipeline-it-and-pump-it-in-the-ground solutions that have failed to take off,” Jones said in a telephone interview. BP is supporting the venture even after scrapping a carbon-capture project in Scotland. It has developed a “portfolio of investments that could yield valuable innovations in carbon capture and storage, carbon conversion and solutions for carbon markets,” the London-based company said on its website. The Skyonic funding includes $80 million of loans from Apollo Investment Corp. (AINV) and Maxus Capital Group LLC, according to Jones. It also won financing from new investors Bluecap Partners, Toyo-Thai Corp. PCL and Energy Technology Ventures. PVS Chemicals Inc., the Detroit-based chemicals maker that will buy the hydrochloric acid, contributed funds too, he said. Skyonic plans to start production next year. The facility will capture CO2, acid gases and metals from the flue gas and turn them into products for sale that will generate profit at the plant within three years, according to the company. To contact the reporter on this story: Sally Bakewell in London at sbakewell1@bloomberg.net To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net Continue reading
