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Trends In The Renewable Energy Landscape
June 6, 2013 By Gil Forer Gil Forer Global Leader, Global Cleantech Center, Ernst & Young A new era is dawning in the renewable energy industry. Energy demand, natural resource, technology costs, access to finance and global competitiveness are identified as the key influences for investors. According to the tenth anniversary edition of the Renewable Energy Country Attractiveness Index (RECAI), which was recently released by Ernst & Young, global annual clean energy investment totaled US$269b in 2012, representing a five-fold increase on 2004. The sector now competes for investment with more traditional energy sources, and new technologies — such as solar panels, biomass boilers and mini wind turbines — are enabling energy users to run their own small power plants, changing the way businesses and consumers think about energy. The renewable energy landscape today is truly global. From Japan and Southeast Asia to Africa and South America, renewable energy is a viable energy source that is gaining a solid and growing share in the energy mix. But, the renewables industry is facing growing pains. Not only is the future a place with less government support, but industry players also have to fight for market share across all corners of the globe and with some worrying signs of trade barriers emerging. For an industry that is still relatively new, this is a seriously challenging time; leaders need to be conversant in international business, conscious of global politics, and clever in innovating new business models and business relationships to win in an increasingly global competitive world. South America and Asia Pac continue to rise as Europe and the Middle East stall Our index sees the US regain the top spot, as high barriers to entry for external investors realign China into second place. However, growth prospects for the sector in China remain strong with continued GDP growth, increasing energy demand, and the ongoing strategic importance of the sector to the local economy providing solid foundations for the future. South America continues to grow in prominence, thanks in part to its growing energy demand. Chile’s project pipeline includes 300MW-400MW concentrated solar power (CSP) plants, while Peru has entered the index for the first time due to good resources and a strong investment climate. However, new policy measures and tender cancelations in Brazil are likely to temper the rapid growth seen in the region over the last 18 months. High levels of project activity and investment interest in Japan and Australia give the Asia Pacific region a stronger presence at the top of the index. Thailand also joins the index in this issue, boasting strong solar resource and a healthy project pipeline, as well as stable fiscal and regulatory support measures. In Europe, Romania became the latest to slash its subsidies, reinforcing the relatively somber mood in Eastern Europe as policy makers try to find the balance between growth and sustainability. A number of the Middle East and North Africa countries, including Egypt, Tunisia and the UAE, have fallen out of the top 40 due to a slow recovery from the Arab Spring and an absence of clear policy frameworks delaying capacity deployment. Transaction market – the continuing squeeze Recent deal activity in the sector has been characterized by incumbents and new entrants driving industry consolidation. There is also a strong appetite from Far East construction groups and original equipment manufacturers (OEMs) seeking development pipelines of solar and wind assets to provide a distribution channel for their products. Factors driving the levels of investment in renewable energy include divestment needs, market restructuring and the entry of new investors into the sector. Utilities and financial buyers are finding greater value in buying operational plants than investing in plant construction. The mismatch between project sponsors’ capital expenditure plans and the corporate capacity to finance this investment will continue to drive more asset disposals. Both financial investors and OEMs under pressure from overcapacity are likely to remain the most active buyers of operational assets and development assets respectively. Further consolidation can be expected in the supply chain. New markets are gaining momentum. Countries and corporations are increasing their focus on changing their energy mix to ensure it provides financial, reputational, operational and social benefits. We’re also seeing the development and implementation of national renewable energy program best practices. In summary, with the shift in the democratization of the energy sector and the increasing power of the customer, the future of renewable energy in the energy mix is bright. For more information about the report, including a discussion of our evolved methodology, please visit www.ey.com/recai . Gil Forer is global leader of the Global Cleantech Center for Ernst & Young. Continue reading
House For Sale By Owner on Gold Coast
House For Sale By Owner Marketing Service, Gold Coast, Australia. Ph: Terry (07) 5534 8322 or email terry.aust@gmail.com. http://www.goldcoastrealestateonlin… Continue reading
Give Credit Where Carbon Credit’s Due
CRITERION From:The Australian June 06, 2013 AS the two listed providers of carbon sinks — growing trees to generate carbon credits — Carbon Conscious (CCF, 2.8c) and CO2 (COZ, 9.5c) have endured the pall of political uncertainty around the abatement issue. But they may be in a better than anticipated position when (barring a Ruddy miracle) Tony Abbott and his climate sceptics storm the frontbenches in September. It’s widely assumed that given the Coalition has pledged to abolish the carbon tax — Senate willing — there’s no incentive for companies to invest in carbon-soaking schemes. Indeed, Carbon Conscious client Origin Energy last year declined to extend a tree-planting deal. But there’s bipartisan agreement to reduce Australia’s emissions by 5 per cent by 2020, with the Coalition pledging to set aside $1.5 billion over three years to buy credits generated by polluters. This equates to a somewhat theoretical price of $15 a tonne, compared with the current temporary floor price of $23/t. Given the slowdown in sequestration investment, CO2’s Andrew Grant says the government may struggle to obtain local credits, in which case the market will push up the price. And, no, dirt-cheap European credits can’t be imported. CO2 yesterday announced the first issue of Australian Carbon Credit Units (ACCUs) from a reforestation project, on behalf of goldminer Newmont. In other words, Newmont can now offset any carbon tax liability from its two Australian mines and avoid paying the carbon tax. Carbon Conscious also announced its method for measuring the carbon-soaking abilities of its 18,000ha of forests had been approved by the clean energy regulator. Carbon Conscious chief executive Andrew McBain expects this acreage to generate 300,000 ACCUs over the next 10 to 15 years, with 10 per cent owned by the company and the rest by clients. “The revenue potential is substantial, especially for a smaller company like ourselves,” McBain says. CO2’s tapestry is more complex as it derives revenue from eco investments and advice and is building a low-cost tiger prawn hatchery in Western Australia. Grant is unfazed by the abysmal listed history of aquaculture plays.”Collingwood doesn’t benchmark itself against Melbourne,” he says. Like the hapless Demons, both stocks are chalking up nasty losses, but we give them credit for being years ahead of sequestration rivals. We’ll avoid Carbon Conscious (market cap $2.9m) in favour of the bigger CO2 ($43m). ISS Group (ISS) 32c MICROEQUITIES’ Carlos Gil has a sense of deja vu as he saddles up to ward off a US takeover attempt at a local mining-focused house. P2ES Holdings is offering 33c a share for ISS, which boasts a proprietary IT system for the oil and gas sector called BabelFish. Microequities owns 9 per cent of ISS and Gil reckons the offer price (a 50 per cent premium on Tuesday’s close) doesn’t reflect the value of the “great little software”. In 2011 Microequities fought in vain to prevent Triple Point from taking over QMastor, but not before the suitor improved its offer. This time around it’s trickier because the offer is board-endorsed, but Gil reckons he can still get the 25.1 per cent support to stymie the scheme of arrangement. We had ISS as a spec buy at 17c and now call the stock a hold. For the record, Gil would accept 40c a share. Given the Hitchhiker’s Guide to the Galaxy allusion to BabelFish, let’s make it 42. Macmahon Holdings (MAH) 16c THE mining contractor yesterday had no idea why Swiss giant Glencore had dumped it from a $110m project — and by sunset was still as bemused as a lost puppy. Investors won’t give mining-service plays the benefit of the doubt and Macmahon’s already trashed shares lost another 2c (11 per cent). The terminated assignment — extending the main shaft of the CSA copper mine near Cobar — was minor in the scheme of Macmahon’s $1.4bn revenues and $3.9bn job book. On a brokers’ trip to the Pilbara last month, Fortescue reps waxed lyrical about Macmahon’s prosecution of the $1.8bn Christmas Creek expansion. Macmahon has guided to a full-year loss of up to $20m. CSA won’t be the last shafted mining project, but we believe the Macmahon sell-off has been overdone and rate the stock a buy. borehamt@theaustralian.com.au The Australian accepts no responsibility for stock recommendations. Readers should contact a licensed financial adviser. The author does not own shares in any of the companies mentioned. Continue reading
