Tag Archives: Investing in Alternative Energy
JEDDAH – Spurred by a buoyant economy and population growth, over $300 billion will be invested in the GCC water and desalination projects, between 2012 – 2022 periods, researchandmarkets.com reported Friday.
Subsequent to its revolutionary discovery of hydrocarbons about three decades back, the GCC economies have come a long way into establishing themselves as a fast developing region boasting modern amenities and facilitating high standards of living.
It said the GCC have increased spending on job creation and infrastructure expansion and are opening up utilities to greater private sector involvement.
While privatization occupies centre stage in the overhauling process of the power and water sector, the initiatives toward alternative energy sources in the form of solar and nuclear power, as alternatives to the heavy dependence on the hydrocarbons sector, particularly to replace natural gas as a primary fuel in power generation, has been considered a highlight of the regional power reforms
The emergence of alternative power sources will enable GCC nations to successfully diversify their economic growth from a predominantly oil based economy thus bracing themselves against future adversities arising from oil fluctuations, the report noted. Renewable energies are about to capture a considerable segment of the global energy mix. This segment is only likely to grow given rising demand for energy, supply worries with regard to fossil fuels and environmental concerns. In particular solar energy offer huge potential for the GCC countries.
Rising domestic energy needs for power generation and desalination, favorable conditions for solar energy production and interest in acquiring technological know-how make a perfect argument for renewable energy in the Gulf.
All six nations of the GCC have either embarked upon or committed to investments in solar projects, with projects split between solar photovoltaic and solar thermal applications.
The GCC region also has considerable wind resources, even though these vary widely across the countries and wind installations are at a less developed stage than their solar counterparts.
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.
The Chinese government’s “Second National Assessment Report on Climate Change” warns of significant risks to agriculture and water resources as a result of a changing climate.
Global warming may reduce crop yields, shrink rivers and increase the frequency of damaging droughts and floods, says the 700+ page report, recently released to the public. Chinese prosperity and economic growth may be hindered as a result.
If global warming trends continue unmitigated, Chinese grain output could fall between 5% and 20% by 2050. China is already the world’s largest consumer of grains and relies heavily on imports of key commodities. Any decrease in domestic production would be deeply felt.
Lin Erda, one of the chief authors of the report, remarked:
“Generally, the observed impacts of climate change on agriculture have been both positive and negative, but mainly negative. But steadily, as the temperatures continue to rise, the negative consequences will be increasingly serious. For a certain length of time, people will be able to adapt, but costs of adaptation will rise, including for agriculture.”
However, Lin points out that improved crop choice and more efficient use of irrigation and fertilizer could help the situation, suggesting that agri-science and new technologies will be crucial for China going forward.
The impact of climate change on China’s water resources may be sizable. Experts fear “severe imbalances in China’s water resources,” concentrated precipitation in the summer and autumn rainy seasons, and “increasingly frequent” floods and droughts.
“Without effective measures in response, by the latter part of the 21st century, climate change could still constitute a threat to our country’s food security.”
The report warns that 8 of mainland China’s provinces could face severe water shortages by 2050 (less than 500 cubic meters per resident), and 10 others could face lesser shortages. The continual retreat of glaciers in Tibet which feed many important rivers is also cause for concern, as is rising sea levels that could impact coastal cities like Shanghai.
Through it all, Chinese carbon emissions continue to rise. Rising by a predicted 10.4% a year, China’s emissions could grow to 9 or 9.5 billion tons by 2020. Achieving the Chinese government’s stated goal of a 40-45% reduction in economic carbon intensity by 2020 (the level of carbon pollution for each unit of growth) will be an expensive endeavor. China’s efforts to reduce carbon emissions will likely require 10 trillion yuan (USD $1.6 trillion) of investment, with half designated for energy-saving technology and clean energy.
The report emphasizes the importance of prompt action, noting that “many cost-effective and mature technologies for energy saving and new and renewable energy have already been widely applied. In the future, controlling greenhouse gas emissions will require more costly and less mature technologies.”
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:
“…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.”
“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.”
“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.”
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.”
Third quarter photovoltaic (PV) installations in the United States increased 40%, says a report released recently by the trade group Solar Energy Industries Association (SEIA) and research firm GTM Research.
Q3 2011 installations were 449.2MW, up from 324.3MW during the same quarter last year. Including these Q3 additions, over 1GW of solar energy capacity was installed this year in the United States – the first time that pinnacle level has been reached.
With a strong Q4 predicted as well, SEIA estimates this year’s PV installations will total 1.7GW, representing an annual growth rate of 89% over the last year.
This sharp increase in installations has been fueled by free-falling prices of solar panel components. Over the past year, a global supply glut has led to a near 40% drop in prices.
This trend has taken a toll on solar manufacturers, but at the same time has propelled increased installations. Projects that did not make economic sense at previous price points are now easier to justify. In addition, federal subsidies and state incentive programs have helped make solar energy cheaper for residential, commercial and municipal consumers.
Looking ahead to 2012, SEIA is expecting another year of growth for the U.S. PV market.