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Strong Connection Between Economy & Environment – Investors Taking Action

Many of the world’s leading executives and investors believe in a strong connection between the economy and the environment. Talk of a “political battle” between the two major focal areas is mere “nonsense,” says Mark Vachon, Vice President of GE’s Ecomagination program.

In a recent interview, Vachon shot down the “false dichotomy” that some are trying to present between attaining profits and respecting our planet.  “There’s this theory that you have to pick one: economics or environmental performance.  That’s nonsense.  Innovation is the way you can have both.”

Over $5 billion has been invested in renewable energy, efficiency and smart grid technologies as part of GE’s Ecomagination program.  By 2015, GE plans to double investments in the sector to $10 billion.  These investments have paid off handsomely, noted Vachon.  With $85 billion in revenue, GE’s cleantech investments have doubled the performance of the rest of its portfolio.

“Companies that don’t get this, really risk becoming irrelevant to the marketplace. Whether you believe it for climate change or just the markets that are developing, it is our responsibility as businesses to be responsible to the design  signal that the world is telling us.”

The trend is undeniable.  Investments in clean energy and related technologies are accelerating. In 2011, investments in clean energy trumped those in fossil fuels for the first time.  In total, $260 billion was funneled into the clean energy sector.  Since 2004, cumulative investment numbers over $1 trillion dollars.

Based on our current path, Bloomberg New Energy Finance predicts $400 billion will be invested annually in proven renewable energy technologies such as solar PV, solar thermal, wind energy and geothermal by 2020.  Many sophisticated investors view clean energy as one of the greatest wealth creation opportunities in history.

For more information on how we invest in clean energy, please visit us here.

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State of the Union Address – Renewed Focus on Energy

Investing in clean energy, expanding energy efficiency programs and harnessing America’s vast natural gas resources received considerable emphasis in President Obama’s State of the Union Address.  Below are key excerpts from his speech:

Natural Gas

“…nowhere is the promise of innovation greater than in American-made energy. Over the last three years, we’ve opened millions of new acres for oil and gas exploration, and tonight, I’m directing my administration to open more than 75 percent of our potential offshore oil and gas resources.”

“This country needs an all-out, all-of-the-above strategy that develops every available source of American energy. A strategy that’s cleaner, cheaper, and full of new jobs. We have a supply of natural gas that can last America nearly 100 years.”

“The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy.”

Clean Energy

“Our partnership with the private sector has already positioned America to be the world’s leading manufacturer of high-tech batteries. Because of federal investments, renewable energy use has nearly doubled, and thousands of Americans have jobs because of it.”

“I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. We’ve subsidized oil companies for a century. That’s long enough”

“The Department of Defense…the world’s largest consumer of energy, will make one of the largest commitments to clean energy in history -– with the Navy purchasing enough capacity to power a quarter of a million homes a year.”

Energy Efficiency

“The easiest way to save money is to waste less energy. So here’s a proposal: Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings. Their energy bills will be $100 billion lower over the next decade, and America will have less pollution, more manufacturing, more jobs for construction workers who need them.”

Read the full transcript of the speech here

 

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Google, TransCanada & Warren Buffett: New Investors in Solar Power

Solar power installations in the United States have reached record highs this year.  As we reported previously, third quarter photovoltaic installations rose by 40%, bringing total installed capacity above 1GW for the first time in U.S. history.

As the year draws to a close, the North American sector is attracting notable new investments from high profile corporate and individual investors such as Google, TransCanada and Warren Buffett.

Google, in conjunction with private equity firm KKR & Co, is buying four solar power plants in California from solar developer Recurrent Energy (owned by Sharp Corp).  Together, these plants have a total capacity of 88MW.  Google’s latest purchase brings its total investment in solar to over $915 million.

Making its first investment in solar, TransCanada – in the news recently surrounding its Keystone XL pipeline to connect Canada’s Alberta tar sands region with refineries in the Gulf – will pay $470 million to Canadian Solar to develop nine plants across Ontario, Canada.  Canadian Solar will take advantage of Ontario’s generous feed-in-tariff program to incentivize the generation of electricity from renewable sources.

Last but certainly not least, we come to Warren Buffett.  The “Oracle of Omaha” has invested heavily into solar via MidAmerican Energy’s (a holding company of Berkshire Hathaway) plan to buy First Solar’s $2 billion Topaz solar photovoltaic plant in Southern California.

The plant is currently under construction, but upon completion by early 2015, will have the capacity to generate enough energy to meet the demands of approximately 160,000 homes.

“MidAmerican is the No. 1 owner of wind-powered energy generation among US rate-regulated utilities,” remarked Greg Abel, the Chairman, President & CEO.  “Adding solar energy to our generation portfolio is a strategic move to invest in yet another renewable energy source.”

Abel continued, “This project also demonstrates that solar energy is a commercially viable technology without the support of governmental loan guarantees and reflects the type of solar and other renewable generation that MidAmerican will continue to seek to add to its unregulated portfolio.”

Read about Google and TransCanada here

Read more about Warren Buffett and MidAmerican’s purchase here

Learn more about investing in solar and renewable energy

 
 

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China Increases Solar Power Development Target by 50%

China’s National Energy Administration announced ambitious new development targets for solar and wind energy.  By 2015, China aims for 15GW solar capacity and 100GW of wind capacity, according to data from the National Energy Administration.

China’s solar power target has increased 50% from its previous development plan.  Solar installations in China have notably increased after the government finalized grid feed-in-tariff programs in July, encouraging developers to put projects into operation before the end of the year.

The nuclear power crisis at Japan’s Fukushima Plant has spurred Chinese interest in solar.  Although the nation boasts the world’s top spot in photovoltaic production and exports, thus far its domestic installations have been lagging behind other nations, such as the United States and Germany.

If China is successful in its development agenda, the country will experience a remarkable increase in solar capacity – 15GW by 2015 up from just 1GW at the end of 2010 – which could ensure its place as one of the world’s major market forces.

Read the full article here…

 
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Posted by on December 19, 2011 in Clean Energy, Policy, Solar

 

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Clean Energy, Efficiency and Smart Energy Technologies Achieve Trillion Dollar Global Investment Mark

As we come to the close of what has been a challenging year for the global economy, we are pleased to report positive news in the clean energy investment sector.

Bloomberg New Energy Finance (BNEF) data shows that for the first time ever, investments in clean energy are surpassing investments in new fossil fuel power.  The clean energy sector recently received its trillionth investment dollar since BNEF record-keeping began in 2004.

2010 saw $187 billion of investment capital funneled into wind, solar, wave and biomass projects, compared with $157 billion for natural gas, coal and oil.

Since 2004, annual clean energy investment has increased nearly five times over, from $52 billion in 2004 to $243 billion in 2010; achieving a compound annual growth rate (CAGR) of 29%.  Over the next eight years, BNEF predicts that figure will double, reaching $395 billion a year by 2020.

“The trillionth-dollar milestone shows that the world is not waiting for a deal on climate in order to start turning the super-tanker away from fossil fuels,” said BNEF chief executive Michael Liebreich, referring to the recent climate conference in Durban, South Africa.

“It should serve as a message to the UN and all those in Durban to stop obsessing about a binding deal to cap carbon emissions, and to think much harder about how to speed up investment in the solutions. Another five years of investment growth at the same compound rates, and the world will have broken the back of emissions growth.”

Despite the general economic malaise and continued sovereign debt problems in the European Union, spending in clean energy has been resilient.  Falling costs and favorable government policies have sped up the pace of wind and solar power installments in places such as China, South Korea, Germany, Italy and the Middle East.

Year after year, actual annual investment levels in clean energy have consistently been higher than predicted investment levels.  Last year was no exception.  Despite somewhat lowered expectations early on, a record $243 billion was invested  in clean energy around the world in 2010.

Read more here…

 

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Brazil: Wind Could Be Second Largest Power Generation Source by 2015

Brazil is making a serious entrance into the global wind power market.  Based on new government energy plans, in a few short years, wind could become the second largest power generation source in the country.

The Brazilian government plans to boost installed wind capacity to 11.5GW by 2020 – a significant increase from the 1.5GW installed today.  A series of auctions will open 6GW worth of wind farm opportunities to the global marketplace by 2015.

To encourage sector growth, the government will offer tax breaks and cheaper financing rates to wind developers, a fact which has not been lost on global wind giants Gamesa, Iberdrola, Vestas and Alstom, all of whom have professed a strong interest in Brazilian wind investments.  Brazil’s plans are so aggressive that wind may very well leap ahead of natural gas to become the country’s second largest source of power generation, following hydroelectric power, by 2015.

Cost reductions as a result of technology developments have made wind’s future particularly rosy in Brazil.  Data shows it is now 70% cheaper to build a wind farm in Brazil than it was 7 years ago. Brazil is now able to invest in the industry at a level which did not make economic sense in the past.

“In Brazil we have large renewable resources, first hydro and then wind and biomass so we prefer to invest in sources that bring good power prices to consumers,” remarked Elbia Melo, CEO of the Brazilian Windpower Association. “The government wants consumers to get the best power price, and they can definitely do this with wind now.”

Brazil has become the “world’s most coveted wind power market,” says Melo.  “China purchases everything it needs to build its own farms domestically while India buys from China, so European and U.S. developers are left with Brazil as the only real viable market.”

Read the full article here

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Posted by on November 29, 2011 in Clean Energy, Policy, Wind

 

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A 'Turning Point' for Solar Energy in the United States

Solar energy is reaching a “turning point” in the United States.  As component prices fall and installations expand, the industry has experienced significant growth over the past few years and is set to continue the trend.  

Solar power installations in the United States doubled last year and are expected to double again this year.  More solar energy is being planned in the country than any other power source, including nuclear, coal, natural gas and wind.  Across the country, solar power installations grew 102% from 2009 to 2010 – the fastest rate of growth seen in the past five years.

Costs have been, and will continue to be, a major factor influencing the deployment of solar energy.  According to EIA estimates, the cost of power generated from solar panels is approximately three times as expensive as natural gas.

However, the cost barrier may be easing, due to the falling price of polycrystalline silicon and a global glut of solar panels as a result of increased manufacturing in Asia.  Since 2008, the price of solar panels have dropped by 2/3.

These price reductions have led to a more attractive environment for both commercial and residential solar customers.  Some predict that if costs continue to fall this quickly, solar power will be competitive with fossil fuels even when current federal subsidies shrink by 2/3 in 2016.

The growth trends in the United States have not gone unnoticed by the rest of the world.  “Every manufacturer globally is looking around for the next major growth market, and the U.S. is the first one everyone points to,” writes GTM Research.

Utilities are entering the solar market in a big way.  Last month, Exelon and NextEra Enegy – two of the nation’s largest utilities – acquired an early stage solar power farm in California.  In another notable deal, NRG Energy and Bank of America announced plans to spend $1.4 billion on solar installations atop 750 commercial building rooftops.

“We’re going in the direction the planet and the industry needs to go,” remarks Arno Harris, CEO of solar developer Recurrent Energy, a subsidiary of Sharp Corp.

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