August 29th, 2010
The U.S. is using less energy, but more of it is coming from renewable sources, such as wind and solar.
CNN Money reports a new report from the Lawrence Livermore National Laboratory (LLNL) says the 5 percent drop in American energy usage during 2009 is the largest annual drop on record. But wind energy production alone rose more than one-third during the same period:
Despite the drop in overall energy use, [A.J. Simon, an energy analyst at LLNL] said the study also showed a substantial increase in alternative sources of energy, including gains in solar, hydro and wind power.
“The increase in renewables is a really good story, especially in the wind arena,” said Simon. “It’s a result of very good incentives and technological advancements.”
The use of wind power rose “dramatically” to 0.7 quadrillion BTUs in 2009 from 0.51 quadrillion BTUs the year before, according to LLNL which compiles the data for the U.S. Department of Energy.
Under the 2009 economic recovery act, the Department of Energy has offered generous tax breaks and grants to help fund the development of wind energy. President Obama has set a target of doubling the country’s renewable energy capacity by 2012.
The article says the increase of wind power has directly helped reduce the amount of coal used in this country.
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August 20th, 2010
I am writing on a white paper on solar right now. One of the topics, besides restructuring and other strategy related issues around solar companies, is M&A. SunPower Corp. has made what may be one of the first decent sized mergers in the solar sector. The company agreed to acquire SunRay Renewable Energy in Malta for $277 million. The equity purchase was $235 million in cash, the rest as a letter of credit. Just last year, SunRay received a $200 million equity commitment from Denham Capital.
We have been expecting consolidation here in the solar sector. It is a hot sector as far as what will get backing and funding from the Obama administration. There are many players, and the U.S. companies need larger scale and leverage to better compete against the Chinese solar stocks. And they have to do whatever they can to get back to or to stay profitable.
In any buyout scenario if any sort of solar mergers were to come up, First Solar Inc. is the big kahuna. It would be a buyer unless for some reason a traditional oil or gas company decided that they really wanted to compete again BP for its large solar initiative. It is possible, just unlikely because of valuations. The company is under a new CEO with a solid reputation, but even with a $9.6 billion market cap the stock is way from highs.
LDK Solar Co. Ltd. is another name that has come up before as a rumored buyout name. But it is based in China and the company has had some rather obscure issues, and accusations have long been a voice against this company. If LDK were ever a real takeout name, it is too difficult to offer a buyer’s name based upon what we have seen at this stock.
Another name which has come up is MEMC Electronic Materials Inc. This is a PV wafer materials maker, but it is mostly in semiconductors. The company has fallen from grace, but things seemed to have grown less-cold for it of late. I can recall an email from Broadpoint AmTech this week with a “Buy” rating and $21 target based upon margins resuming there.
Info: 27 wall street
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