Tag Archives: press-releases
Brazil To Triple Funding For Renewable Energy
6/11/2013 3:22:10 PM | Joao Peixe, Oilprice.com As well as biofuel research Brazil has one of the largest, fastest growing economies in the world, and also some of the largest offshore oil reserves in the word. However, rather than relying on that oil to fuel its economic growth it has decided to focus on renewable energies and biofuel. The Brazilian government has announced that it will spend $2.85 billion on renewable energy and biofuel research and development, hoping that the new energy sources and technology will bring its energy industry into the modern age, and help it cut its carbon emissions. Alexandre Tanaka, from Financiadora de Estudos e Projetos (FINEP) a Brazilian research and finance agency, told Bloomberg that the President Dilma Rouseff wants to triple the funds available to innovative technology companies, as the country attempts to become a supplier of quality energy technology and processes, as opposed to purchasing from other countries. Under a new government program aimed at encouraging development in innovative technology, FINEP and the Brazilian Development Bank (BNDES) will provide loans to any companies working on renewable energy or biofuel research at rates as low as 3.5%. Mark Kenber, CEO of The Climate Group, said that the “government investment to support innovation in clean energy technology will drive job creation and offer green investors incentives and stability, which will help Brazil compete with in the fast expanding clean energy markets around the world. Brazil has huge potential to lead the global clean revolution, and with plans like these it looks like the nation is now ready to kick-start such efforts.” http://oilprice.com/…l-Research.html Read more at http://www.stockhous…QSCZO5VQWQzM.99 Continue reading
How to Attract Private Investment in Clean Energy
By the Editors Jun 10, 2013 Like a fresh wind setting in motion the blades of a giant turbine, a new idea for encouraging the development of clean energy has blown into the U.S. Congress. It is to allow renewable-energy companies to form master limited partnerships, a business structure that has long worked to attract investment capital to the oil and gas industry. Legislation in the Senate has support from Republicans and Democrats alike, not to mention the White House. We think it’s a neat idea, too. A master limited partnership offers the tax advantages of a partnership (the partners pay the taxes, not the corporation) even as its shares are publicly traded like ordinary corporate stock. The limited partners receive quarterly dividends, and these are typically higher than those paid to corporate shareholders because the business itself pays no taxes. This means the company can raise money from small investors at relatively low cost. Master limited partnerships would open a huge new pool of affordable capital for renewable energy, an industry that needs a lot of upfront investment and takes years to bring a big return. As things stand, clean-energy businesses have trouble attracting affordable financing. A large wind-energy company can turn to the “tax-equity” market to leverage its federal production tax credits. However, this market consists of just a handful of enormous companies (think of Google Inc., Chevron Corp., Honda Motor Co.) whose giant tax bills make it possible for them to take advantage of the wind company’s tax credits. Such investors get returns averaging 8 percent to 9 percent, according to data compiled by Bloomberg New Energy Finance. By tapping into cheaper money from individual investors, renewable-energy companies could raise $3 billion to $6 billion in financing by 2021, according to an analysis by Southern Methodist University. And the companies would pay less for the financing; average dividends paid by master limited partnerships amount to about 6 percent. MLPs have, since 1981, helped the oil and gas industry raise capital for refineries, pipelines and drilling operations. This market now includes about 120 master limited partnerships, and has a total capitalization of more than $440 billion, according to the National Association of Publicly Traded Partnerships. Renewable energy has been left out so far because federal tax law specifies that master limited partnerships must derive their revenue from depletable natural resources. (The law was written in the days before renewable-energy enterprises sought such large amounts of capital.) Expanding the MLP Parity Act to bring renewables into the game is only fair, and could bring new financing to nuclear power, energy storage, carbon capture and other initiatives that less obviously are considered renewable energy. The U.S. government has in the past subsidized clean energy directly. In 2011, some $48 billion went to various projects. This was stimulus spending, though, and stimulus money is drying up — even as the global market for clean energy keeps expanding. Although the government spending was useful, we much prefer a mechanism that makes private investment possible and appealing. According to a Bloomberg New Energy Finance report, by 2030 renewables will generate 50 percent of power globally. And between now and then, clean energy will attract $8.2 trillion in financing. To remain competitive in this growing market, the U.S. clean-energy industry needs the investment that MLPs would allow. To contact the Bloomberg View editorial board: view@bloomberg.net. Continue reading
US Farmland Appears Dangerously Overpriced, Analysts Say, And Small Community Banks Could Suffer In Any Abrupt Downturn
By Mike Obel | June 11 2013 5:53 AM The decade-long surge in the price of corn and wheat has finally trickled down to U.S. farmland prices, lifting the value of agricultural land that grows the two grains to dangerously high levels, analysts say. peckumn.com Farmland in Greene County, Iowa There has been a massive geographical disparity, however, with the price of prime Midwest cropland surging, while the Southeast has actually seen prices fall, said economist Paul Ashworth of Capital Economics. Between 2009 and 2012, only 11 states saw price gains above the national average. Most worryingly, Nebraska has seen farmland prices nearly double over the past three years, while prices have increased by more than 80 percent in Iowa. Land in that state may now be overvalued by 40 percent to 100 percent. “The states with the biggest gains in farmland values are notable for also being the nation’s largest producers of corn and wheat. To some extent, the rise in farmland values in the Corn Belt and across the Northern Plains is a natural response to the prolonged rise in agricultural selling prices,” said Ashworth. The Federal Reserve Bank of Chicago said last month that its survey of 219 bankers revealed that the price of farmland in its area, which includes Wisconsin, Michigan and northern Indiana and Illinois plus nearly all of Iowa, jumped 15 percent in the first quarter of this year from a year earlier. And the Agriculture Department estimates that the value of U.S. farmland will top $2.4 trillion this year. “Between 2009 and 2012, corn prices nearly doubled while wheat prices increased by one-third. The increase in prices and rising yields have together resulted in a sustained period of strong growth in the annual value of farm production. Between 2009 and 2012, the overall value of national crop production increased by 25 percent,” said Ashworth. He said near-zero interest rates have undoubtedly played some role in this, but the bigger factor has been the surge in corn and wheat prices over the past decade. If the bubble in farmland values in the Corn Belt were to burst, it could hit small community banks hard as well as devastate the farmers involved. Continue reading
