Preview Newsletter
SFCE Oct 22
-
Mexico Planning Coast-to-Coast Wind-Energy Push
Oct 22, 2015 | BNA Daily Environment Report
By Vanessa Dezem and Adam Williams
Mexico is planning to quadruple its wind-power capacity as part of President Enrique Pena Nieto's effort to transform the country's energy industry. The country expects to have about 10 gigawatts of turbines in operation within three years spread across almost every region, up from 2.5 gigawatts in 2014, part of a government... -
Apple just announced dramatic new solar plans in China
Oct 21, 2015 | The Washington Post
By Chris Mooney
Apple, the world’s largest public company by market capitalization, announced late Wednesday a suite new of renewable energy investments and partnerships in China — the world’s largest nation by greenhouse gas emissions. The iPhone and Apple Watch maker, which already powers its electricity hungry data centers and U.S. operations... -
Half of all Australian households could adopt solar by 2018, finds the Climate Council
Oct 22, 2015 | PV Magazine
By Ian Clover
Already boasting the world’s highest level of residential solar penetration, Australia could soon see 50% of its households adopting solar+storage and moving off the grid by 2018, finds a report released this week by the Climate Council. The non-profit Climate Council’s report found that storage capacity is set to grow ... -
SolarCity continues search for new markets as UK adventure comes to an end
Oct 22, 2015 | PV Tech
By Liam Stoker
US residential solar installer SolarCity has said global expansion remains on its agenda despite the premature demise of its exploratory foray into the UK market via subsidiary Zep Solar. Speaking to PV Tech’s sister site Solar Power Portal in the wake of the recent decision to withdraw Zep Solar from the UK, Marco Krapels, senior vice president... -
Sustainable Investing Is Booming. Is It Smart?
Oct 22, 2015 | BNA Daily Environment Report
By Ben Steverman
Want to invest in “high-quality, attractively priced companies making a positive impact on the world”? Of course you do. The question is, will you make money? On Sept. 30, Thornburg Investment Management launched the Better World International Fund, self-described above. For investments of less than $2.5 million, the fund will charge an...
Industry News
Full Text of Stories Below
-
Mexico Planning Coast-to-Coast Wind-Energy Push
Oct 22, 2015 | BNA Daily Environment Report
By Vanessa Dezem and Adam Williams
Mexico is planning to quadruple its wind-power capacity as part of President Enrique Pena Nieto's effort to transform the country's energy industry.
The country expects to have about 10 gigawatts of turbines in operation within three years spread across almost every region, up from 2.5 gigawatts in 2014, part of a government plan to add 20 gigawatts of clean energy by 2030, according to Mexico's Wind Energy Association.
A total of 22 gigawatts of wind power will be added over the next 25 years, requiring $46 billion in investment. The wind push is due to two converging trends: Mexico's historic shift from a state-controlled energy monopoly, and its efforts to transform a grid that relies on fossil fuels for three-fourths of the nation's electricity.
“We're already a new country,” Alejandro Peraza, general director of the energy regulator CRE, said in an interview in Mexico City. “Mexico is getting cleaner.”
Mexico is Latin America's largest crude producer and the world's No. 10 producer of greenhouse-gas emissions. It was the first developing country to submit its plan to reduce carbon emissions before a United Nations conference in Paris in December where almost 200 countries are expected to sign a deal to fight global warming.
Investors ‘Line Up Their Horses.'
Mexico pledged to reduce 22 percent of its greenhouse gas emissions by 2030. Wider use of renewable energy will reduce fossil-fuel based power generation to 45 percent.
“There is a clear national policy on climate change taking place,” said Peraza. “We are going in the direction of a low carbon economy.”
Mexico's economy will expand 2.4 percent this year, according to a Bloomberg News survey. The government expects energy demand to increase 4 percent annually over the next decade.
That growth will be fueled by the shift toward renewables, which will jump to 51 percent of total installed capacity by 2040, from 14 percent now, according to New Energy Finance. Most of that will come from wind, in part because import taxes drive up costs for solar power.
“Investors are starting to line up their horses,” said Lilian Alves, a New Energy Finance analyst in Sao Paulo.
20-Year Certificates
To facilitate that transition, the government plans to hold annual energy auctions, with the first set for March. Power producers will receive certificates for every megawatt-hour of clean energy they generate, and will sell 20-year certificates through the auctions to large electricity users.
Large consumers must get 5 percent of their power from clean sources by 2018. The government also set a mandate in 2012 to get 35 percent of the country's energy from non-fossil fuel sources by 2024, up from 21 percent now.
Those who don't meet the mandate may be fined as much as $200 per megawatt-hour used, according to Peraza. Large industrial users may be required to buy clean-power certificates on the spot market.
Power companies are keen to jump into Mexico's clean-energy market as soon as new rules for the auctions and certificates are finalized, according to Adrian Escofet, president of Mexico's Wind Energy Association. Those policies are expected to be issued this month.
‘An Important Moment.'
Gauss Energia, a Mexico City-based company that owns Mexico's largest solar farm, is planning to register 100 megawatts of power projects for the March auction.
“I am optimist,” said Chief Executive Officer Hector Olea. “The certificates can't be included in project finance papers now, as we don't know their prices.”
New government policies may not be enough to stimulate renewable energy in the short term, according to Luis Alberto Salomon Arguedas, clean energy specialist at International Finance Corp.
“Developers are waiting for more benefits, such as possible tax cuts for renewable energy or different ceiling prices for each energy source,” said Arguedas. “If the game rules don't change a lot, I think the government's target is going to be difficult to be reached.”
“This is an important moment to prompt wind-energy development,” in Mexico, said Angelica Ruiz Celis, Vestas Wind Systems A/S's general manager for the country, where the biggest turbine supplier has 1 gigawatt of capacity installed or under construction. “Mexico is a key market for Vestas.”
Link (subscription needed): http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=78011570&vname=dennotallissues&fn=78011570&jd=78011570
-
Apple just announced dramatic new solar plans in China
Oct 21, 2015 | The Washington Post
By Chris Mooney
Apple, the world’s largest public company by market capitalization, announced late Wednesday a suite new of renewable energy investments and partnerships in China — the world’s largest nation by greenhouse gas emissions.
The iPhone and Apple Watch maker, which already powers its electricity hungry data centers and U.S. operations generally with 100 percent renewable energy, will now also seek to green its supply chain in the vast country, chief executive Tim Cook announced in China Wednesday.
“Climate change is one of the great challenges of our time, and the time for action is now,” said Cook in a statement released to press.
Apple’s 19 offices and 24 stores in China are now carbon neutral, the company announced, thanks to the completion of 40 megawatts worth of solar capacity in Sichuan Province.
But that’s just the start — the company also said that it plans to build 200 additional megawatts worth of solar projects across country, so as to begin to offset the greenhouse gas emissions of the companies in its supply chain. A megawatt is equivalent to a million watts, and the company calculates that this is enough electricity to power 265,000 Chinese homes for a year.
Most ambitious of all, the company is also joining with its business and manufacturing partners in China to install still more solar and other renewables — a total of 2 gigawatts worth of planned capacity. That will be led by 400 megawatts of solar installations by Foxconn, whose factory in Zhengzhou manufactures iPhones.
The investments, said the company, will prevent 20 million metric tons of greenhouse gas emissions between now and the year 2020.
The announcements come shortly before the intensely anticipated United Nations meeting in Paris, where nations of the globe will seek to forge a first-ever binding global agreement to reduce emissions. In advance of the meeting, many major companies have also pledged emissions reductions and clean energy investments, but Apple and some other tech firms, like Google, have been among the most ambitious of very large corporations.
Google just announced that it would invest in the largest planned wind farm in Africa, at Kenya’s Lake Turkana.
“To see Apple really putting commitments that are at scale to their energy demand in China, it’s a significant signal to the sector, and a signal that we hope other companies will follow,” said Gary Cook, a senior information technology analyst with Greenpeace who has been analyzing energy use in the sector, and how renewable it is.
Link: http://www.washingtonpost.com/news/energy-environment/wp/2015/10/21/apple-just-announced-dramatic-new-solar-plans-in-china/
-
Half of all Australian households could adopt solar by 2018, finds the Climate Council
Oct 22, 2015 | PV Magazine
By Ian Clover
Already boasting the world’s highest level of residential solar penetration, Australia could soon see 50% of its households adopting solar+storage and moving off the grid by 2018, finds a report released this week by the Climate Council.
The non-profit Climate Council’s report found that storage capacity is set to grow 50-fold within a decade, and dramatic cost reductions –which have fallen at a rate of 14% every year between 2007 and 2014 – will accelerate, particularly as lithium-ion producers scale up production.
This perfect storm of affordable storage and cheaper solar will strike Australia first, where the nation already has solar penetration among 15% of homeowners. The Climate Council believes that rate can rise to 50% within three years.
The Climate Council report predicts that half of Australian households will adopt a AU$10,000 battery system with a payback on initial outlay of 10 years. The phasing out of FITs across Australia is convincing more and more homeowners to invest in battery storage technology in order to maximize the value of their solar array.
"Anyone who has PV on their roof knows they’re paid a fraction – maybe a tenth – of what it costs them to buy power off the grid," said Andrew Stock of the Climate Council. "If they have a tool, a battery, that can allow them to store the surplus power during the day and use it at night, it means they’re going to get greater control than they already have over their power bill."
This disruption to Australia’s traditional energy mix has already spooked some of the existing network operators, the report found, with some companies actively altering how they price power in an attempt to discourage the uptake of solar+storage – a move Stock called "perverse".
"Battery systems, coupled with PV, can actually help networks get much better use out of their assets by smoothing out the demand on the grid. That should mean that network companies don’t need to invest anywhere near as much at adding capacity in the future, and they get better use out of their existing capacity."
Compelling network operators to view solar+storage as an opportunity rather than as a threat is the biggest looming challenge ahead for solar and storage in Australia, Stock added. "If they see it only as a threat, that will put back Australia from potentially being a leader in the uptake for up to a decade."
Currently some 1.4 million homes in Australia have a solar array fitted, but the number of households with a supportive storage battery fitted is far lower, estimated at around just 500. However, as costs for batteries fall – the completion of Tesla’s gigafactory in Nevada is expected to accelerate cost reduction – this rate will rise dramatically, the report found, serving to boost solar deployment and the wider adoption of electric vehicles.
At the recent All Energy exhibition in Australia, the nation's Minister for the Environment Greg Hunt hinted at the possible introduction of storage subsidies to help grease the wheels of what many are certain will become a multi-billion dollar industry in Australia.
Link: http://www.pv-magazine.com/news/details/beitrag/half-of-all-australian-households-could-adopt-solar-by-2018--finds-the-climate-council_100021644/#axzz3pIUJ3300
-
SolarCity continues search for new markets as UK adventure comes to an end
Oct 22, 2015 | PV Tech
By Liam Stoker
US residential solar installer SolarCity has said global expansion remains on its agenda despite the premature demise of its exploratory foray into the UK market via subsidiary Zep Solar.
Speaking to PV Tech’s sister site Solar Power Portal in the wake of the recent decision to withdraw Zep Solar from the UK, Marco Krapels, senior vice president of strategy at SolarCity, said the company was eyeing opportunities in a number of other European markets as well as Latin America.
Last week it emerged that SolarCity had decided to shelve plans to build a presence in the UK through Zep Solar, the mounting specialist it bought two years ago.
Zep Solar entered the UK market earlier this year, establishing a base in Milton Keynes from where it hired a team of six people as it looked into launching its offering in the UK as part of a global expansion. Given its status in the US and backing from Tesla founder and renowned entrepreneur Elon Musk, SolarCity would have been a strong contender to be a dominant player in a future UK market.
But those plans have since fallen foul of UK government proposals to cut the feed-in tariff for residential and small commercial rooftop PV arrays. Of the six staff employed at the firm, it is understood four have been made redundant and two have been found positions elsewhere.
Speaking of the decision to close Zep Solar’s UK operation, Krapels, said the company had evaluated the UK and come to the conclusion that in the wake of a reduced feed-in tariff, the UK “just doesn’t economically make sense”.
“We can achieve much better IRRs for our investors in other countries where solar intuitively makes a lot of sense,” Krapels said. “In the absence of feed-in tariffs and a net metering policy, I think it’s very difficult when you have a country that doesn’t have a lot of sun hours. It’s just very hard, economically, to make it work.”
But Krapels was quick to point that the withdrawal of Zep Solar from the UK market did not spell the end of SolarCity’s overseas ambitions, which so far only encompass Mexico where the company has acquired local installer Ilioss.
“Latin America overall is an attractive market; they have the conditions of high irradiation, structurally high and rising utility rates, increase in per-capita use of electricity – so Latin America is definitely on the radar,” he said.
“There are certainly a couple of European countries that we'll be looking at as well. Europe is somewhere in my top ten, and there are other parts of the world where even in the absence of net metering or feed-in tariff rates, you have such high irradiation rates that it economically works. I'm very pleased having scoped out the world in the last few months where we see tremendous opportunity for us to expand our core competencies – being rooftop solar – into key international markets.
“For us, what's really important to enter a market is to understand the regulatory framework that allows solar to thrive, and allows for the economics to exist where I'm able to convince my board to take a dollar out of the US and put it into another country.”
While Zep Solar has now shuttered its UK operations, Krapels lauded the work the unit had achieved in researching new installation techniques and technology on UK rooftops, which he noted were now being used in other international markets.
“The beautiful thing about the UK is that you have all these different rooftops, such as town roofs. We can do two to three homes a day now with the same crew, and we can do a large commercial building in less than two days. That's unparalleled,” he said.
He also said the UK generally had done a “great job” in expanding solar in the past, and hinted at a possible return in the future.
“[Solar] is good for the economy, it’s created thousands of jobs and I think it’s good for energy price stability…I really do hope the UK continues to expand and create a regulatory runway where it is attractive for companies like ourselves or others to enter the UK market,” he added.
SolarCity became the second big international solar installer to back away from the UK market in the wake of proposed cuts to the feed-in tariff after SunEdison announced it was to “de-emphasise” the UK, prompting the sale and subsequent administration of its UK installer subsidiary Mark Group.
Investor confidence in the UK’s clean energy sector has taken a battering against the backdrop of numerous cuts to support frameworks since the Conservative Party’s general election victory in May. EY demoted the UK to outside the top 10 in its Renewable Energy Country Attractiveness Index for the first time in its history in September.
Link: http://www.pv-tech.org/news/solarcity_continues_search_for_new_markets_as_uk_adventure_comes_to_an_end
-
Sustainable Investing Is Booming. Is It Smart?
Oct 22, 2015 | BNA Daily Environment Report
By Ben Steverman
Want to invest in “high-quality, attractively priced companies making a positive impact on the world”? Of course you do.
The question is, will you make money?
On Sept. 30, Thornburg Investment Management launched the Better World International Fund, self-described above. For investments of less than $2.5 million, the fund will charge an upfront “load” of up to 4.5 percent and an annual expense ratio of 1.83 percent. A no-load alternative version of the fund charges 2.38 percent of assets a year.
That's just about how much non-U.S. stocks have earned annually over the past 20 years and 11 times as much as the fees on the most popular U.S. international mutual fund.
The new fund's portfolio manager, Rolf Kelly, said investors will get something for the higher fees. “There is an additional layer of work and effort that's going into this product,” he said, citing the costs of evaluating companies in emerging markets. “It's up to us to prove our salt and earn our fees. It's my job to justify my existence.”
More Sales Pitches
Investors can expect to hear more and more sales pitches such as this one. Mainstream investment firms are rushing into “sustainable investing,” also known as SRI (socially responsible investing) and ESG (environment, social and corporate governance). From 2012 to 2014, the number of U.S. investment funds incorporating ESG criteria jumped 28 percent, to 925, and their assets more than quadrupled, to $4.3 trillion, according to the Forum for Sustainable & Responsible Investment. Even the largest Wall Street firms are getting into the act. BlackRock, the biggest money manager in the world, started selling its BlackRock Impact U.S. Equity Fund on Oct. 13.
“The driver is client demand,” said Kathy Leonard, a 32-year veteran of sustainable investing who is a wealth adviser at UBS Financial Services in Boulder, Colo. “We need to have the products and services that our clients are asking for.”
It's never been easier to find an investment that promises to do good. It's never been harder to sort through the jargon and marketing pitches to find a sustainable strategy that's right for you. There are five don'ts.
Don't Overpay
No matter how well-intended an investment strategy may be, it can't avoid mathematical reality: Every dollar investors pay in fees subtracts from returns. But there are cheaper sustainable options, including index funds. The Calvert U.S. Large Cap Core Responsible Index Fund charges an expense ratio of 0.19 percent. The Vanguard FTSE Social Index Fund charges 0.27 percent.
Investors may decide to pay more, and not only because they think they've found the rare portfolio manager who can outperform the indexes. For example, they may want a manager who takes the time to sponsor shareholder resolutions that push companies to behave more ethically or responsibly, by one definition or another. That kind of activism might not always pay off financially, but that's not necessarily the point.
Still, investors shouldn't have to sacrifice their returns altogether for their values. “Companies are going to charge what they can get away with,” said Sonia Kowal, president of Zevin Asset Management. In general, an actively managed SRI or ESG fund shouldn't cost more than a typical non-ESG actively managed fund, she said. According to the Investment Company Institute, the average investor pays an annual expense ratio of 0.86 percent for actively managed stock funds. And the more you have to invest, the less you should pay.
Don't Expect Huge Returns
A common pitch is that sustainable investments perform better than other assets. The idea is that ethical and responsible companies are less risky and better long-term investments.
It might even be true. In a March 2015 analysis by the University of Oxford and Arabesque Asset Management, 80 percent of academic studies found that the stocks of companies with “good sustainability practices” do better than other stocks.
But it can cost money to find these companies, in the form of fees that detract from returns. And even the best-paid, most-experienced analysts can make mistakes. Until Oct. 6, Volkswagen was included in the Dow Jones Sustainability Indices.
Sustainable strategies’ real-world track record is mixed. Morningstar estimates that social impact funds returned about 5 percent a year over the past 10 years, lagging behind large-cap funds by 1.1 percentage points a year. When you look at index funds, it's hard to distinguish the performance of socially responsible funds from that of their non-SRI peers. The Vanguard FTSE Social Index Fund has beaten Vanguard's S&P 500 fund over the past five years but lagged over the past decade.
Don't Let Jargon Throw You
Terms such as sustainable, impact, ESG, and SRI can all mean different things to different people. “We've got a terminology problem,” said Leonard of UBS.
Take the “ESG integration.” More and more fund managers are pledging to integrate ESG factors into their investment process. For many of those managers, however, ESG remains just one factor of many. They might still end up owning the tobacco, fossil fuel, or defense stocks you thought you were avoiding.
Even based on the same values, there's a ton of ways to invest. Some investors will want to exclude companies with questionable practices; others end up owning those companies and pushing executives to do better. Some just try to buy the best-behaving companies in each industry, so they are fully diversified; others double down on industries they want to encourage—for example, by buying solar stock funds.
The CFA Institute, a nonprofit group for investment professionals, has a free online course that can help you sort through the many approaches to ESG investing.
Don't Dither
With so many choices, investors need to know their top priority, and “doing good” isn't specific enough. “What is it you feel strongly about?” said Usman Hayat of the CFA Institute.
You might decide your first goal is avoiding stocks that violate your religion or your social values. No alcohol or no gun stocks, for example. If you decide your top priority is making money, you may go for a more flexible approach.
Don't Expect Perfection
Of a stock, a fund, or yourself.
No company does only good in the world. A solar company might not treat its workers well, for example. A gay-friendly company might be a big polluter. “Investors need to realize that there is no perfect solution out there,” Hayat said.
And while a sustainable investing strategy may make the world a better place, even the most virtuous investors inevitably make compromises.
Link (subscription needed): http://news.bna.com/deln/DELNWB/split_display.adp?fedfid=78011549&vname=dennotallissues&fn=78011549&jd=78011549
Industry News
Full Text of Stories Below
Add recipients
Suggested