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Found 73 results for Solar
June 12 2018

Commentary by Eoin Treacy

Musings From The Oil Patch June 12th 2018

Thanks to a subscriber for this report edition of Allen Brooks’ ever interesting report for PPHB. Here is a fascinating section on energy efficiency statistics over the last 50 years:

Eoin Treacy's view -

A link to the full report and a section from it are posted in the Subscriber's Area.

There is no doubt that battery efficiency is improving and new Solar innovation is being revealed on almost a weekly basis. There are laudable reasons for seeking to reduce carbon and nitrogen oxide emissions in our cities all of us can support. However, the question many people are worried about is whether this is merely transferring a problem from cities to less populated areas.

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November 07 2017

Commentary by Eoin Treacy

Musings From The Oil Patch November 7th 2017

Thanks to a subscriber for this edition of Allen Brooks’ everinteresting report for PPHB which may be of interest. Here is a section: 

The euphoria that greeted the production cut agreement announcement lifted oil prices above $50 a barrel, a critical threshold for market confidence.  As global oil inventories failed to drop as the market expected, investors turned on the commodity as well as energy stocks, sending their prices lower.  Since the oil price drop in early 2007, prices have largely traded between the low $40s a barrel to now above $54, with a brief excursion as low as $26.  The narrow price range reflected global oil inventories remaining relatively flat, until recently.  As oil inventories started falling a few weeks ago, we are now in a period favorable for higher prices.  

Today, we are firmly planted in an oil market reflecting positive price momentum.  Better projected oil demand growth seemed to be the initial factor that helped lift the oil market.  The International Energy Agency (IEA) upped its demand growth estimates for the second half of 2017.  About the same time, U.S. shale producers began shedding oil drilling rigs in response to weakening oil prices and as they sensed a need to rebuild investor confidence in their financial health.  Producers had to dispel the image of exploration and production (E&P) companies as destroyers of capital, a label the industry’s record seemed to warrant.  Disciplined capital spending, meaning living within a company’s cash flow in order to not have to borrow money or sell more equity to fund the overspending, appears to be the new mantra for E&P companies.  The latest survey of E&P company spending plans versus cash flow demonstrates that overspending remains high.  This may signal that it will take time for companies to generate positive cash flow.  

In recent weeks, as Brent oil prices have risen at a faster rate than WTI oil, the forward oil price curve moved into backwardation, meaning that barrels of oil able to be delivered immediately are worth more than if they are stored and delivered in the future.  This price disparity is further impacted by the cost of storing the oil.  Backwardation encourages holders of oil in storage to begin selling those barrels, which has accelerated the shrinking of global oil inventories.   

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

Comparing these two futures curves for Brent Crude oil and West Texas Intermediate we see that the backwardation is most acute in Brent while West Texas Intermediate is in contango over the first four contracts. That highlights the continued incentive domestic US suppliers have, to pump and export into the global market; picking up a more than $5 spread in the process. 

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October 09 2017

Commentary by Eoin Treacy

During Irma's Power Outages, Some Houses Kept The Lights On With Solar And Batteries

This article by Adele Peters for may be of interest to subscribers. Here is a section: 

Of course, if a storm is strong enough to tear Solar panels off a roof and the battery can’t recharge, this type of system wouldn’t work for long. It’s also expensive: A single Powerwall unit, which can store 14 kilowatt-hours of energy, costs $5,500 plus supporting hardware and installation that can cost up to $2,000. A similar battery from Mercedes-Benz ranges from $5,000 to $13,000 for a 20 kilowatt-hour system including installation. In the U.K., where Ikea now sells both Solar panels and batteries, its batteries are also nearly $4,000 at current exchange rates. Beyond cost, if someone rents an apartment or house and can’t install Solar panels, it’s not an option.

But the cost is likely to drop, and battery storage and Solar power could also be used in community Solar projects, where customers don’t have Solar panels at their own homes, but invest in or buy power from a nearby microgrid. In Orlando, customers can buy Solar energy from a 12-megawatt Solar farm built on top of a landfill; while the power is currently sent back to the grid, in the future, it’s possible that it and other community Solar farms could use batteries to provide local backup power from multiple locations in emergencies.


Eoin Treacy's view -

Microgrids, batteries and Solar cells have the potential to grow exponentially as costs come down and business models evolve. There are two additional points that are likely to prove attractive to consumers as well as government. The first is that the utility network is likely to be a target in any future war and foreign governments have already demonstrated both the intent and ability to tamper with it. 

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July 21 2017

Commentary by Eoin Treacy

Letter to the Editor of the New York Times from Sunrun's CEO

I thought this letter by Lynn Jurich may be of interest to subscribers. Here it is in full:

“After Rapid Growth, Rooftop Solar Programs Dim Under Pressure From Utility Lobbyists” (news article, July 9) got it right that traditional utilities are fighting to undercut competition and customer choice by targeting state Solar policies, “particularly net metering, which credits Solar customers for the electricity they generate but do not use and send back to the grid.”

Rooftop Solar growth, however, is inevitable. More than one million consumers across the country are already powering their homes with rooftop Solar. By 2022, residential Solar capacity will more than triple, according to GTM Research estimates.

The utility lobby is intentionally distracting regulators from focusing on the real threat to affordable energy: billions of dollars of grid expansion proposals with virtually guaranteed profits and requests to subsidize nuclear plants. Rooftop Solar competition forces utilities to control their costs.

Policy leaders who dig into the facts know that rooftop Solar, plus home batteries for Solar storage, will modernize our grid, provide more affordable clean power to everyone and create more American jobs.


Eoin Treacy's view -

The combative tone of this letter to the editors highlights the fact that the battle between utilities and Solar companies is far from over. If we distil the arguments down to their core. Utilities have a vested interest in preserving their near monopoly on supply of electricity and the grid on which it travels. Solar companies want to create as large a market for their products as possible and rooftops are an important part of their growth strategy. To that end they have developed innovative pricing models and relied on sharing the grid so electricity can be sold. 

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June 16 2017

Commentary by Eoin Treacy

Many Rivers to Cross Decarbonization breakthroughs and challenges

Thanks to a subscriber for this report from J.P. Morgan Private Bank which may be or interest. Here is a section: 

New York. This is more of a theoretical exercise, since in NY, wind/Solar comprise only 3% of electricity generation. But in principle, NY could also reduce CO2 emissions to 90 MT per GWh in exchange for a ~15% increase in system costs. One difference vs California is that NY’s build-out would start from a much lower base. The other difference is that storage is less optimal given lower NY Solar capacity factors. Instead, a more cost-effective approach to reaching the deeper 60% emissions reduction target would be to build more wind/Solar and discard (“curtail”) the unused amount, and not build any storage.

Conclusions. Scale and innovation are creating cost-benefit tradeoffs for decarbonizing the grid that are more favorable than they were just a few years ago, even when including backup thermal power costs. However, this is likely to be a gradual process rather than an immediate one. Bottlenecks of the past were primarily related to the high capital cost of wind, Solar and storage equipment. The next phase of the renewable electricity journey involves bottlenecks of the future: public policy and the construction/cost of transmission are two of the larger ones7. As is usually the case with renewables, there’s a lot of hyperbole out there. The likely trajectory: renewables meet around one third of US electricity demand in 2040, with fossil fuels still providing almost twice that amount

Eoin Treacy's view -

Energy storage solutions have been evolving for a long time but the advances in battery technology has potential to revolutionise the sector. However he cost of those batteries still needs to come down a lot for them to truly have a transformational impact on the cost of generating and storing energy. What is clear from the above report is that the continued build out of renewable energy solutions, with or without storage, represents an additional cost for consumers over the lengthy medium term without a major advancement in battery technology.  

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June 02 2017

Commentary by Eoin Treacy

U.S. Won't Change Efforts to Cut Emissions Post-Paris: Tillerson

This note by Katia Dmitrieva for Bloomberg may be of interest to subscribers. Here it is in full:

Secretary of State Rex Tillerson says the U.S. won’t change “ongoing efforts" to reduce greenhouse gas emissions in the future, despite pulling out of the Paris climate accord.

U.S. “has a terrific record on reducing our own greenhouse gas emissions It’s something I think we can be proud of and that was done in the absence of a Paris agreement," he tells reporters before meeting at State Dept with Brazilian Foreign Minister Aloysio Nunes Ferreira


Eoin Treacy's view -

The revolution in unconventional supply has contributed more to the USA’s ability to combat emissions than any form of renewable energy because it has made coal uncompetitive. The evolving argument for the development of fracking techniques to develop geothermal energy sources is another reason why the USA is likely to meet its emissions targets without being party to an international agreement. The energy intensity of the countries like China and India is still in its major growth phase and the question of global emissions rests on their ability to innovate. 

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April 03 2017

Commentary by David Fuller

Graphene-Based Sieve Turns Seawater Into Drinking Water.

My thanks to a subscriber for this interesting article from BBC News, Science & Environment.  Here is the opening:

The promising graphene oxide sieve could be highly efficient at filtering salts, and will now be tested against existing desalination membranes.

It has previously been difficult to manufacture graphene-based barriers on an industrial scale.

Reporting their results in the journal Nature Nanotechnology, scientists from the University of Manchester, led by Dr Rahul Nair, shows how they solved some of the challenges by using a chemical derivative called graphene oxide.

Isolated and characterised by a University of Manchester-led team in 2004, graphene comprises a single layer of carbon atoms arranged in a hexagonal lattice. Its unusual properties, such as extraordinary tensile strength and electrical conductivity, have earmarked it as one of the most promising materials for future applications.

But it has been difficult to produce large quantities of single-layer graphene using existing methods, such as chemical vapour deposition (CVD). Current production routes are also quite costly.

On the other hand, said Dr Nair, "graphene oxide can be produced by simple oxidation in the lab".

He told BBC News: "As an ink or solution, we can compose it on a substrate or porous material. Then we can use it as a membrane.

"In terms of scalability and the cost of the material, graphene oxide has a potential advantage over single-layered graphene."

Of the single-layer graphene he added: "To make it permeable, you need to drill small holes in the membrane. But if the hole size is larger than one nanometre, the salts go through that hole. You have to make a membrane with a very uniform less-than-one-nanometre hole size to make it useful for desalination. It is a really challenging job."

Graphene oxide membranes have already proven their worth in sieving out small nanoparticles, organic molecules and even large salts. But until now, they couldn't be used to filter out common salts, which require even smaller sieves.

Previous work had shown that graphene oxide membranes became slightly swollen when immersed in water, allowing smaller salts to flow through the pores along with water molecules.

Now, Dr Nair and colleagues demonstrated that placing walls made of epoxy resin (a substance used in coatings and glues) on either side of the graphene oxide membrane was sufficient to stop the expansion.

Restricting the swelling in this way also allowed the scientists to tune the properties of the membrane, letting through less or more common salt for example.

David Fuller's view -

Graphene is one of the most useful products ever invented but apparently difficult to use on a commercial scale, at least so far.  Mrs Fuller drew my attention to graphene years ago and wanted to know how to invest in it?  I remain convinced that it will eventually have many applications which remain almost unimaginable today.

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March 27 2017

Commentary by Eoin Treacy


Thanks to a subscriber for this report from Deutsche Bank which may be of interest. Here is a section: 

Investors should be particularly sensitive to indicators that are associated with being in a misaligned world. This analysis can be applied both to sunk capital and new investment. For companies with low growth capex, margins on existing production will clearly be more important than incremental value creation or destruction on new investment. For high growth companies, returns relative to the cost of capital on new investment will be more critical. 

Investors should be wary of high-carbon companies where decarbonisation is likely to be demand driven (for example coal generators facing lower production as subsidised renewable production is built). However there may be value opportunities where decarbonisation is supply driven (for example restrictions on coal production, or forced coal closures could increase margins on remaining capacity even while overall volumes drop). 

Investors should look for low carbon companies in sectors where supply constraints are likely to be more significant than demand constraints as volumes grow. They should be wary of sectors where the mechanisms for growth are likely to drive down returns (for example long asset lives with technological progress and short-term market pricing). 

By understanding the positioning of companies in the matrix of volume and value, investors can make an informed judgment. Market valuations can be set against current opportunities and future expectations. Shareholder engagement can help ensure the right corporate strategy

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

Governments need revenue so regardless of what one’s feelings are with regard to climate there is a strong potential for higher taxes, particularly in Europe which is a major fossil fuel importer. The impetus for similar taxes in energy producing nations, not least the USA, is less compelling.  

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March 08 2017

Commentary by Eoin Treacy

Musings from the Oil Patch March 7th 2017

Thanks to a subscriber for this edition of Allen Brooks’ ever interesting report for PPHB. Here is a section on Solar cells

A more recent analysis by the Lawrence Berkeley National Laboratory covering 1998 to 2015 shows a different measure of PV cost. (See Exhibit 15 on next page.) The pattern of that decline is interesting. It took 11 years for the price per watt to drop from $12 to $8. Notice how the cost per watt dropped between 1998 and 2000, but then remained flat until 2002, after which it declined for the next three years. Starting in 2005, the cost slowly increased for two years before beginning a slow decline that lasted for two years. In 2009, the pace of decline accelerated until it reached about $4 per watt, or half the 2009 value. The recent decline coincides with China’s entrance into the Solar panel manufacturing business and its prompt dumping of surplus output into the U.S. market, driving down panel prices and driving U.S. manufacturers out of business.

It is difficult to separate how much of the historical price decline came from technological improvements versus that from a misguided investment strategy by China. More importantly, will these price reduction trends continue as in the past and how dependent on technological breakthroughs in material science are lower prices in the future?


Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

The cost of producing Solar cells collapsed as China introduced economics of scale to the market. That has been perhaps the greatest influence on the price of cells and has contributed to the collapse of the investable sector because so many companies are now running at a loss. There have already been a significant number of bankruptcies and remaining companies are still in a highly competitive environment. 

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December 30 2016

Commentary by Eoin Treacy

Solar Panels Now So Cheap Manufacturers Probably Selling at Loss

This article by Christopher Martin for Bloomberg may be of interest to subscribers. Here is a section:

“Certainly it would be a challenge for anyone to make money at that price,” Osborne said in an e-mail. “The blended cost for most last quarter was about 36 cents to 38 cents.”

The current price is also lower than cost estimates from Trina. The biggest supplier of 2015 expected to reduce costs to about 40 cents a watt by the end of the year, from 45 cents in the second quarter, Chief Financial Officer Merry Xu said in an August conference call. The Changzhou, China-based company’s shareholders on Dec. 16 agreed to a $1.1 billion deal to take the company private. A spokesman declined to comment Friday.

Some companies’ cost structures remain competitive, even with prices this low. Canadian Solar Inc., the second-biggest supplier, reported costs of 37 cents in the third quarter, down from 39 cents in the second quarter. The company has said its costs are among the lowest in the industry, and it expects to reach 29 cents a watt by the fourth quarter of 2017. Many of its competitors expect costs in the low 30s by then, Osborne said.


Eoin Treacy's view -

Producing Solar cells in an environment where prices are falling and likely to continue to fall as new technologies are integrated into the manufacturing process is a highly competitive business. Companies unable to compete will go bankrupt and even the most successful face the threat of obsolescence. Consumers are the primary beneficiaries. 

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December 15 2016

Commentary by David Fuller

World Energy Hits a Turning Point: Solar That Is Cheaper Than Wind

Here is the opening of this interesting article from Bloomberg:

A transformation is happening in global energy markets that’s worth noting as 2016 comes to an end: Solar power, for the first time, is becoming the cheapest form of new electricity. 

This has happened in isolated projects in the past: an especially competitive auction in the Middle East, for example, resulting in record-cheap Solar costs. But now unsubsidized Solar is beginning to outcompete coal and natural gas on a larger scale, and notably, new Solar projects in emerging markets are costing less to build than wind projects, according to fresh data from Bloomberg New Energy Finance

The chart below shows the average cost of new wind and Solar from 58 emerging-market economies, including China, India, and Brazil. While Solar was bound to fall below wind eventually, given its steeper price declines, few predicted it would happen this soon.

Solar investment has gone from nothing—literally nothing—like five years ago to quite a lot,” said Ethan Zindler, head of U.S. policy analysis at BNEF. “A huge part of this story is China, which has been rapidly deploying Solar” and helping other countries finance their own projects.

This year has seen a remarkable run for Solar power. Auctions, where private companies compete for massive contracts to provide electricity, established record after record for cheap Solar power. It started with a contract in January to produce electricity for $64 per megawatt-hour in India; then a deal in August pegging $29.10 per megawatt hour in Chile. That’s record-cheap electricity—roughly half the price of competing coal power. 

“Renewables are robustly entering the era of undercutting” fossil fuel prices, BNEF chairman Michael Liebreich said in a note to clients this week.

David Fuller's view -

It is entirely logical that technology will continue to lower the cost of Solar power, until it is the cheapest source of energy by far.  After all, it neither has to be discovered and then extracted, nor does it need refining.  It is free energy, arriving every day from the largest nuclear reactor within our Solar system - by far.  The means of capturing Solar energy are multiplying at a rapid rate, particularly within urban areas where it is most needed.  Storage of Solar energy is limited but this too will change, now that it is a priority.   

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December 05 2016

Commentary by Eoin Treacy

New efficiency record for large perovskite solar cell

This article by Eric Mack for Gizmag may be of interest to subscribers. Here is a section:

"Perovskites came out of nowhere in 2009, with an efficiency rating of 3.8 percent, and have since grown in leaps and bounds," said Anita Ho-Baillie, a Senior Research Fellow at the UNSW's Australian Centre for Advanced Photovoltaics. "I think we can get to 24 percent within a year or so."

The Solar cells are made from crystals grown into a particular structure called perovskite. Smooth layers of perovskite with large crystal grain sizes allow the cells to absorb more light. The technology has been advancing fast and attracting plenty of attention thanks to its ease of production and low cost compared to silicon cells.

"The diversity of chemical compositions also allows cells be transparent, or made of different colors," said Ho-Baillie. "Imagine being able to cover every surface of buildings, devices and cars with Solar cells."

Perovskite cells do have downsides like much less durability, something Ho-Baillie and her team say they're confident they can improve, while also shooting for higher levels of efficiency.

Eoin Treacy's view -

Perovskite is a development stage technology that is likely to play an important role in the future of Solar cells but it could be a decade before it reaches commercial utility. The primary argument supporting perovskite is the relative cost of producing the crystals versus the panels used today. That enhances the technology’s competitiveness so that cells do not need to be as efficient because they are so much cheaper. However what do need to be overcome are the issues described above regarding durability which are non-trivial.

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December 01 2016

Commentary by Eoin Treacy

OPEC Meeting Review

Thanks to a subscriber for this report from DNB which may be of interest. Here is a section: 

OPEC has just decided a headline cut of 1.2 million b/d

We calculate that compared with October secondary sources in the OPEC report, the net OPEC cut from the 11 participating countries in the deal is 0.982 million b/d

Angola was allowed to use September output as the base instead of October

The cartel will use secondary sources to monitor output reductions
Indonesia, Libya and Nigeria is not part of the deal

Since the cartel has distributed quotas to the different countries, have organized a monitoring committee and are using secondary sources, the deal is very bullish to the oil price


Eoin Treacy's view -

A link to the full report is posted in the Subcsriber's Area.

Brent crude oil hit a new recovery high today and upside follow through tomorrow would confirm a return to demand dominance beyond what has been an impressive two-day rally. Considering the fact that the price has been rangebound for the last six months the potential for a breakout that is outsized relative to the amplitude of the congestion area cannot be discounted. 

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November 29 2016

Commentary by David Fuller

Solar-Panel Roads to Be Built on Four Continents Next Year

My thanks to a subscriber for this fascinating article from Bloomberg.  Here is the opening:

Electric avenues that can transmit the sun’s energy onto power grids may be coming to a city near you.

A subsidiary of Bouygues SA has designed rugged Solar panels, capable of withstand the weight of an 18-wheeler truck, that they’re now building into road surfaces. After nearly five years of research and laboratory tests, they’re constructing 100 outdoor test sites and plan to commercialize the technology in early 2018.

“We wanted to find a second life for a road,” said Philippe Harelle, the chief technology officer at Colas SA’s Wattway unit, owned by the French engineering group Bouygues. “Solar farms use land that could otherwise be for agriculture, while the roads are free.”

As Solar costs plummet, panels are being increasingly integrated into everyday Materials. Last month Tesla Motors Inc. surprised investors by unveiling roof shingles that double as Solar panels. Other companies are integrating photovoltaics into building facades. Wattway joins groups including Sweden’s Scania and Solar Roadways in the U.S. seeking to integrate panels onto pavement.

To resist the weight of traffic, Wattway layers several types of plastics to create a clear and durable casing. The Solar panel underneath is an ordinary model, similar to panels on rooftops. The electrical wiring is embedded in the road and the contraption is topped by an anti-slip surface made from crushed glass.

A kilometer-sized testing site began construction last month in the French village of Tourouvre in Normandy. The 2,800 square meters of Solar panels are expected to generate 280 kilowatts at peak, with the installation generating enough to power all the public lighting in a town of 5,000 for a year, according to the company.

For now, the cost of the Materials makes only demonstration projects sensible. A square meter of the Solar road currently costs 2,000 ($2,126) and 2,500 euros. That includes monitoring, data collection and installation costs. Wattway says it can make the price competitive with traditional Solar farms by 2020.

David Fuller's view -

Theoretically, this is an interesting idea and an ambitious challenge.  I hope it can be perfected although the overall cost, safety and susceptibility to damage may be too great for existing technologies.  Nevertheless, it shows the incredible adaptability of Solar technology, in terms of projects both great and small.   

The sun is the greatest source of energy with which we have any personal experience.  The number of manmade products exposed to sunlight, which can be captured and turn into energy, is practically unlimited.  

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November 21 2016

Commentary by David Fuller

Elon Musk: Tesla Solar Roof Will Likely Cost Less Than a Normal Roof

Tesla CEO Elon Musk said the Solar roof that will be sold under a combined Tesla-SolarCity will likely cost less than a normal roof to install.

Tesla and SolarCity shareholders voted in favor of the merger, a deal worth $2 billion, Thursday. In late October, Musk unveiled a new Solar roof product to show his vision for a combined company with SolarCity, but did not provide specifics on how much it would cost.

On Thursday after the shareholder vote, Musk said its Solar roof will likely cost less than a normal roof:

“It’s looking quite promising that a Solar roof will actually cost less than a normal roof before you even take the value of electricity into account. So the basic proposition would be, ‘Would you like a roof that looks better than a normal roof, lasts twice as long, costs less and by the way generates electricity?’ It’s like, why would you get anything else?”

Musk added the price he is speaking to factors in the cost of labor.

During a Nov. 1 conference call, SolarCity CEO Lyndon Rive said that the companies are aiming for 40 cents a Watt, which would put it in line with the competition.

Musk unveiled four Solar shingle options for a Solar roof at the Oct. 28 event. The Solar roof will incorporate glass developed by Tesla’s new glass division.

Tesla will produce the Solar cells for the roof with Panasonic at a manufacturing facility in Buffalo, New York.

David Fuller's view -

Yes, Solar power does not produce electricity after sunset or when you are beneath heavy clouds, but it is the most flexible and increasingly power.  Mrs Fuller and I have Solar panels on our house in Devon and if the roof ever needs to be replaced, I would probably not hesitate to do so with Solar roof shingles. 

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September 19 2016

Commentary by Eoin Treacy

SunEdison's TerraForm Units Both Say They're Seeking Buyers

This article by Tiffany Kary and Christopher Martin for Bloomberg may be of interest to subscribers. Here is a section:

Multiple companies have expressed interest in TerraForm Power. Golden Concord Holdings Ltd., a Chinese clean-energy group, is planning to bid for SunEdison’s controlling stake in the company, people familiar with the plans said in August. That would challenge a joint offer from Canada’s biggest alternative- asset manager, Brookfield Asset Management Inc., and billionaire David Tepper’s Appaloosa Management LP hedge fund.

TerraForm Power said in August that it was considering plans to set up an auction to sell itself, according to people familiar with the matter. SunEdison, which has been selling off assets in Chapter 11, said earlier this month that it had reached an agreement with the two non-bankrupt yieldcos over when and how they would bring claims as part of the bankruptcy.

The process may not lead to a deal, according to Swami Venkataraman, an analyst at Moody’s Investors Service.

If the bids “highly undervalue” TerraForm Power and its assets, “they may choose to operate as an independent company for some time,” Venkataraman said in an e-mail Monday.

The case is SunEdison Inc., 16-10992, U.S. Bankruptcy Court, Southern District of New York (Manhattan)  


Eoin Treacy's view -

SunEdison’s financial engineering resulted in the company’s bankruptcy with the yieldcos into which it poured all of its productive assets are now the subject of investor interest. For companies seeking to pick up clean energy assets at a discount in order to benefit from the cash flows they throw off and/or to bolster their green credentials Terraform Power and Terraform Global represent potentially attractive targets. 

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August 31 2016

Commentary by Eoin Treacy

D.E. Shaw Considering Major Stake in TerraForm

This article by Nathan Reiff appeared in Investopedia and may be of interest to subscribers. Here is a section:

D.E. Shaw is one of the most recent companies to express an interest in buying SunEdison's shares of TerraForm. Shaw already owns about 6.7% of TERP shares following a negotiation made to forgive SunEdison debt. While this is a significant stake already, it is nowhere near SunEdison's huge percentage of ownership of the company. By purchasing up additional "Class B" shares in TerraForm, D.E. Shaw would attempt to capitalize on SunEdison's bankruptcy declaration by acquiring one of its most valuable holdings.

Golden Concord has also recently made it known that it is interested in purchasing now-defunct SunEdison's shares of TERP stock. The company, which is China's largest new energy company that is not government-owned, no doubt also sees a prime investment opportunity. For both D.E. Shaw and Golden Concord, however, added interest in SunEdison's stake in TERP means that the competition for those shares is rising, and the price is likely to go up as well. Throughout Monday, August 29, shares of TERP were trading at higher levels as a result of the increased interest.


Eoin Treacy's view -

To coin a pun “Solar has been under a cloud of late”. Last year’s decision by Nevada to side with established utilities and force Solar power providers to help pay for the grid, which they had being using for free, foreshadowed wider questioning of the subsidies on which the installation sector has relied upon. The bankruptcy of SunEdison and Tesla bailing out/absorbing SolarCity are both symptomatic of the challenges facing the sector. 

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August 22 2016

Commentary by David Fuller

Why the UK is Using Less Energy, but Importing More, and Why It Matters

The UK is in the midst of an energy revolution. Since the late 1990s the Government has committed to using cleaner energy, and using less of it.

Billions of pounds have been invested in renewable energy sources that generate electricity from the wind, waves and plant waste.

At the same time the UK has managed to cut its energy use by almost a fifth as households and businesses have steadily replaced old, inefficient appliances and machinery with products that use far less energy to run. Energy demand has also fallen due to the decline of the UK’s energy-intensive industries, such manufacturing and steel-making.

But Government data shows that the UK’s reliance on energy imports is at its highest since the energy crisis of the late 1970s, raising serious questions over where the UK sources its energy and what a growing dependence on foreign energy means for bills and for security.

In a leaner, greener energy system, why is the UK more dependent on foreign energy sources than it has been in more than 30 years?

David Fuller's view -

The short answer is that the UK has largely run out of commercially viable North Sea oil at today’s prices.  It has also made a commendable push into renewables while cutting back on the use of coal.  However, this has been an expensive policy and the country faces an increasing risk of energy shortages. 

Fortunately, there is a medium-term solution to this problem if the government moves quickly.

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July 20 2016

Commentary by Eoin Treacy

TerraForm Global Rises amid Talks with SunEdison to Sell Stake

This article by Christopher Martin for Bloomberg may be of interest to subscribers. Here is a section:

TerraForm Global and SunEdison are in talks regarding “a jointly managed sales process and accompanying protocol for managing the marketing process,” according to a presentation posted on TerraForm Global’s website Tuesday. SunEdison is currently involved in the biggest ever sale of clean energy assets after filing for bankruptcy protection in April with $16.1 billion in liabilities. It has not announced a process for selling its controlling stake in TerraForm Global or its sister yieldco TerraForm Power Inc.

TerraForm Global, a yield company formed by SunEdison to buy clean power plants built by SunEdison outside of the U.S., owns 917 megawatts of Solar and wind energy plants, mostly in southeast Asia and South America. The company had revenue of as much as $52 million in the first quarter, according to the presentation.

It also reported preliminary losses of as much as $350 million for the second half of last year, and a preliminary loss of as much as $8 million for the first quarter of this year.

TerraForm Global has not filed results since the third quarter because it relies on SunEdison for some accounting systems, and the parent company’s results are also delinquent.

Eoin Treacy's view -

Financial engineering contributed to SunEdison’s demise because it divested itself of income producing assets while holding onto liabilities. That worked fine while oil prices were high, demand for Solar plants was surging and credit was easy to come by. The decline in oil, natural gas and particularly coal prices questioned the profitability of Solar plants and the share collapsed. 

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July 06 2016

Commentary by Eoin Treacy

First Solar Quits TetraSun in Shift to All Thin-Film Panels

This article by Christopher Martin for Bloomberg may be of interest to subscribers. Here is a section: 

When First Solar acquired TetraSun, it was producing cadmium-telluride panels with maximum efficiency rates of 13.3 percent, the amount of energy in sunlight that’s converted to electricity. TetraSun had 21 percent efficiency at the time and the potential for improvement.

The company’s latest cadmium-telluride cell reached a record 22.1 percent efficiency in a laboratory. That’s higher than the best multicrystalline polysilicon cell at 21.3 percent, according to data from the National Renewable Energy Laboratory.

SunPower Corp., which uses a purer form of silicon, has the most efficient panels, with 24.1 percent.

“First Solar has achieved surprisingly good results for its thin-film technology,” Jenny Chase, an analyst at Bloomberg New Energy Finance, said in an e-mail. “First Solar may have felt there was little point in competing in an area where they have no unique advantage over other silicon manufacturers.”


Eoin Treacy's view -

The above story highlights how Solar panel companies can become the victims of their own success. By purchasing Tetrasun, First Solar was hedging its development of a new product but it is arguable whether that would have worked since there are other cost effective manufacturers of those panels, not least in China. In such a highly competitive market, where the risk of new technologies evolving outside a company’s internal ecosystem is nontrivial, companies might be better off having conviction in their own products than competing on legacy technology. 

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June 23 2016

Commentary by David Fuller

Solar Power to Grow Sixfold as Sun Becoming Cheapest Resource

Here is the opening of this topical article from Bloomberg:

The amount of electricity generated using Solar panels stands to expand as much as sixfold by 2030 as the cost of production falls below competing natural gas and coal-fired plants, according to the International Renewable Energy Agency.

Solar plants using photovoltaic technology could account for 8 percent to 13 percent of global electricity produced in 2030, compared with 1.2 percent at the end of last year, the Abu Dhabi-based industry group said in a report Wednesday. The average cost of electricity from a photovoltaic system is forecast to plunge as much as 59 percent by 2025, making Solar the cheapest form of power generation “in an increasing number of cases,” it said.

Renewables are replacing nuclear energy and curbing electricity production from gas and coal in developed areas such as Europe and the U.S., according to Bloomberg New Energy Finance. California’s PG&E Corp. is proposing to close two nuclear reactors as wind and Solar costs decline. Even as supply gluts depress coal and gas prices, Solar and wind technologies will be the cheapest ways to produce electricity in most parts of the world in the 2030s, New Energy Finance said in a report this month.

“The renewable energy transition is well underway, with Solar playing a key role,” Irena Director General Adnan Amin said in a statement. “Cost reductions, in combination with other enabling factors, can create a dramatic expansion of Solar power globally.”

David Fuller's view -

My guess is that even these optimistic forecasts will be significantly exceeded by 2030, as the Solar power industry becomes progressively more efficient.  Moreover, the accelerated rate of technological innovation will lead to new forms of Solar power which are all but unimaginable today.

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June 22 2016

Commentary by Eoin Treacy

Musk's Solar Lifestyle Idea Has One Big Flaw

This article by Leonid Bershidsky for Bloomberg may be of interest to subscribers. Here is a section:

The commercial success of Musk's vertical integration idea hinges -- in terms of turning a profit rather than generating a high market capitalization -- on battery technology that would have mass rather than niche appeal. The assumption upon which Musks' concept -- and Tesla's $32.3 billion market capitalization -- is built is that Tesla is betting on the right battery technology and no one will come up with a much better one. That is the big hole in the donut: The assumption is far from safe.

Cheap and reliable energy storage is central to the idea of an off-the-grid, Solar-powered household. Such a home needs energy at night, when the sun isn't shining: It has fridges, air conditioners and other appliances running, and a Tesla charging in the garage. So it needs a good battery, and Tesla's Powerwall doesn't necessarily fit the bill -- if only because the cost of the energy it supplies, including amortization, is higher than grid prices. Because of this, and given the high price of Tesla cars, the lifestyle on offer is an expensive statement. In terms of cost and convenience, it's not competitive with the traditional grid-and-fossil fuel model.


Eoin Treacy's view -

Let’s call Tesla Motor’s acquisition of SolarCity what it is; a bailout. The tide of highly attractive subsidies for Solar has turned. NV Energy, Warren Buffett’s Nevada utility, successfully argued that it should not have to bear the full cost of the electrical grid when Solar producers get to use it for free and get preferential rates on the electricity they supply. That represented a major upset for SolarCity in particular but also highlighted a deeper challenge for the Solar leasing business model which has contributed to increased scepticism among investors about the prospects for related companies. The big question is whether other states, particularly in the sun-belt will announce similar charging structures. 

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June 10 2016

Commentary by Eoin Treacy

Energy in 2015: A year of plenty

Thanks to a subscriber for this edition of BP’s annual report by Spencer Dale which may be of interest. Here is a section:

The increasing importance of renewable energy continued to be led by wind power (17.4%, 125 TWh). But Solar power is catching up fast, expanding by almost a third in 2015 (32.6%, 62 TWh), with China overtaking Germany and the US as the largest generator of Solar power.

The older stalwarts of non-fossil fuels – hydro and nuclear energy – grew more modestly. Global hydro power increased by just 1.0% (38 TWh), held back by drought conditions in parts of the Americas and Central Europe. Nuclear energy increased by 1.3% (34 TWh), as rapid expansion in China offset secular declines within mainland Europe. This gradual shift of nuclear energy away from the traditional centres of North America and Europe towards Asia, particularly China, looks set to continue over the next 10-20 years.


The key lesson from history is that it takes considerable time for new types of energy to penetrate the global market. Starting the clock at the point at which new fuels reached 1% share of primary energy, it took more than 40 years for oil to expand to 10% of primary energy; and even after 50 years, natural gas had reached a share of only 8%.

Some of that slow rate of penetration reflects the time it takes for resources and funding to be devoted in scale to new energy sources. But equally important, the highly capital intensive nature of the energy eco-system, with many long-lived assets, provides a natural brake on the pace at which new energies can gain ground.

The growth rates achieved by renewable energy over the past 8 or 9 years have been broadly comparable to those recorded by other energies at the same early stage of development. Indeed, thus far, renewable energy has followed a similar path to nuclear energy.

The penetration of nuclear energy plateaued relatively quickly, however, as the pace of learning slowed and unit costs stopped falling. In contrast, in BP’s Energy Outlook, we assume that the costs of both wind and Solar power will continue to fall as they move down their learning curve, underpinning continued robust growth in renewable energy.

Indeed, the path of renewable energy in the base case of the Energy Outlook implies a quicker pace of penetration than any other fuel source in modern history. But even in that case, renewable power within primary energy barely reaches 8% in 20 years’ time.

The simple message from history is that it takes a long time – numbering several decades – for new energies to gain a substantial foothold within global energy.


Eoin Treacy's view -

A link to the full report is posted in the Subcsriber's Area.

The evolution of renewable energy technology represents a major paradigm shift for the energy sector not least because the cost of production continues to decrease independently of the oil price and environmental concerns result in a compelling case for adoption. In tandem with wind and Solar, the rollout of electric vehicles is a related but separate development which is likely to represent a continued headwind for demand growth.

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April 22 2016

Commentary by David Fuller

San Francisco Passes Law Requiring New Buildings to be Topped With Solar Panels

My thanks to a subscriber for this article from Gizmag.  Here is a section:

San Francisco has passed a law requiring all new buildings below 10 stories to have Solar panels installed on their rooftops. It becomes the first major US city to mandate Solar panel installations on new constructions and forms part of a wider vision to generate 100 percent of its electricity via renewable energy.

The Better Roofs Ordinance was passed unanimously by the city's Board of Supervisors, and will apply to new constructions both commercial and residential from January next year, according to the San Francisco Examiner.

"Activating underutilized roof space is a smart and efficient way to promote the use of Solar energy and improve our environment," says Supervisor Scott Wiener, who introduced the legislation in February. "We need to continue to pursue aggressive renewable energy policies to ensure a sustainable future for our city and our region."

Other governments around the world have adopted similar policies, including the states of Maharashtra and Haryana in India. Dubai also plans to make rooftop Solar panels mandatory for all buildings starting in 2030, as part of the Dubai Clean Energy Strategy 2050. More locally, the smaller Californian cities of Lancaster and Sebastopol introduced compulsory rooftop Solar panels in 2013.

David Fuller's view -


Hardly a month goes by without reports of new developments within the Solar industry which increase the variety, flexibility and overall efficiency of these installations.  Our ability to capture and generate power from the sun’s rays is limited only by our imagination.   

  (See also: 3D Solar towers offer up to 20 times more power output than traditional flat Solar panels, and Solar Panels made three times cheaper and four times more efficient.)

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April 22 2016

Commentary by Eoin Treacy

TerraForm Power Believes It Has Sufficient Liquidity to Operate

This note by Will Daley for Bloomberg may be of interest to subscribers. 

Even if some SUNE obligations are not fulfilled, TERP expects to continue operating

Defaults may now exist under many of TERP’s non-recourse project-debt financing pacts (or such defaults may arise in the future) due to SUNE bankruptcy filing, delays in preparation of audited financial statements

Defaults “are generally curable"; TERP will work with its project lenders to obtain waivers and/or forbearance agreements

No assurances can be given that waivers, forbearance agreements will be obtained


Eoin Treacy's view -

SunEdison rallied impressively from its 2012 lows following the adoption of a quickstep leveraged strategy aimed at acquiring or building Solar energy power plants while simultaneously divesting of the completed assets into two MLPs. This saddled the parent with the risk of acquisition and building without holding onto the residual cash flows from a working utility once completed. The strategy was predicated on the rapid pace of Solar installations persisting indefinitely. They do not appear to have factored in the role a drop in oil prices would have on that business model. 

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April 05 2016

Commentary by Eoin Treacy

Email of day on the long-term outlook for energy resources

Yer man, while I often feel like I am part of the new old economy. I am not concerned in the near term that electric vehicles will have mass adoption. I am puzzled how the electrical grid will power all these new super cars? Coal which is the worst emitter of GHG's is the primary source of electrical generation in North America and that is being phased out for natural gas as you know. The environmental movement is flawed with hypocrisy and makes no economic sense. In Canada the govt has chosen to demonize the oil and gas industry which funds the majority of our social services and yet we bail out Bombardier and the auto industry. I sound like a grumpy old man.

Eoin Treacy's view -

Thanks for this topical comment to a piece I posted on Friday. It’s been a long time since we shared an apartment in London; when we were both new to London, and I’m glad you’re still in the heat of the action in Calgary. I think everyone finds it hard not to be grumpy when things are not going one’s way at any age. 

This article from the from 2014 estimates that if every car in America was an electric vehicle it would represent only about a 30% increase in electricity demand because electric vehicles are more efficient. 

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March 04 2016

Commentary by David Fuller

Oil Companies Turn to Solar

Here is a latter section of this interesting and informative article by Nick Hodge of Outsider Club:

But perhaps the most convincing evidence that Solar is here and it's competitive is that oil companies are now using it to make oil extraction cheaper and cleaner.

Late last year news began coming out that the oil industry was turning to Solar to help it pump crude.

Royal Dutch Shell (NYSE: RDS), Total (NYSE: TOT), the Kuwait State Oil Company, and Oman's sovereign wealth fund have teamed up to create a Solar company called GlassPoint.

It is building a massive Solar installation in the Oman desert to create steam to help pump oil. That one project will save more carbon than all electric cars sold so far by Tesla (NASDAQ: TSLA) and Toyota (NYSE: TM) combined.

What's more, using Solar to help power an oilfield makes total economic sense. Up to 60% of the operating expenses at heavy oil fields are for fuel purchases.

So at a time when oil companies are cutting costs — curtailing exploration and laying off tens of thousands of workers — they are still interested in spending for projects that can reduce costs.

And that means Solar.

Petroleum Development Oman, which is partly backing GlassPoint, accounts for 70% of the nation's oil production and 100% of its gas supply.

It is highly indicative that it is turning to Solar to complement its fossil fuel operations.

This is only going to continue through 2030, as Solar continues its march toward becoming the world's dominant source of electricity.

As that happens, the companies that improve Solar technology and reduce its costs are going to be the biggest winners for investors.


David Fuller's view -

Fuller Treacy Money has long maintained that Solar power would dominate not only renewable energy but also prove to be more successful than any fossil fuel, due to its unique advantages.

This item continues in the Subscriber’s Area, where a PDF of the article is also posted.

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January 28 2016

Commentary by Eoin Treacy

Who owns the sun

This article by Noah Buhayar for Bloomberg may be of interest to subscribers. Here is a section: 

Buffett’s company has also bought renewable energy through long-term contracts. Last year, NV Energy signed up to purchase power from a giant First Solar installation outside Las Vegas for $38.70 per megawatt-hour. Analysts said at the time that it was one of the cheapest rates on record. Commissioners cited projects like that for why it made no sense to continue encouraging net metering in Nevada. If the goal is to put more Solar on the grid, it’d be far cheaper for NV Energy to procure it.

This, of course, is of little consolation for the Nevadans who’ve already blanketed their roofs with Solar panels. The public outcry seems to have registered with NV Energy. On Jan. 25 it said it would ask the commission to allow existing net-metering customers to stick with the old system for two decades in some instances. “A fair, stable, and predictable cost environment is important to all our customers,” Paul Caudill, the utility’s president, said in a statement. The commission will soon rehear that portion of the case.

Even if the utility’s proposal is accepted, it may not go far enough for the Solar industry. The December decision could be challenged in court—or taken straight to voters. SolarCity and other groups are trying to get the issue on the November ballot.

Caught in limbo are people such as Dale Collier. The day after the commission hearing, he showed off a 56-panel system on his home in the Las Vegas suburb of Henderson. It cost him about $48,000 to install in 2011. SolarCity hadn’t yet set up shop in Nevada, so he paid for it by refinancing his house. The system took his NV Energy bill down to about $80 a month from the $330 it used to average, he says. One year, he got a $1,355 check from NV
Energy because his Solar power was helping the utility meet its renewable energy requirements. “It was the smartest thing I’d ever done,” he says. “Now, it’s the stupidest thing I’ve ever done.”

Collier had planned to retire from his job flying small cargo planes. But he doesn’t want to stop working until he has a better handle on his monthly bills from Buffett’s utility. “If it goes totally haywire, I’m going to look at batteries,” he says. “I’d love to just go off the grid totally, and tell them to f--- off.”


Eoin Treacy's view -

The acrimonious battle between legacy utilities and distributed supply represented by Solar has come to a head in Nevada. There is a great deal at stake and emotions are running high, not least because people have invested a lot of money and risk a profit turning into a loss.

If we look at the situation with a clear perspective the upkeep of the electrical grid is not free. Both utilities and consumers use it to buy and sell electricity. Therefore it makes sense that both should contribute to its upkeep. That was the central argument proposed by NV Energy and it’s hard to argue with. 

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January 22 2016

Commentary by Eoin Treacy

Point & Figure

Eoin Treacy's view -

2016 will be 47th year of The Chart Seminar and it is still the longest running course on a behavioural approach to interpreting the market in the world. We will soon be announcing dates for when you can expect to attend both at a physical location and via webinar this year.

I was thinking about this earlier in the week and was ruminating on how we focused on p&f charts when we relied on chartbooks but on candlestick charts now that we have the online Chart Library. Both have their merits and candlesticks are certainly more expedient because you do not have to customise box sizes. However there is nothing quite like monitoring a persistent decline, or rally, on a p&f chart because the reversal when it comes is very clear. 

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January 04 2016

Commentary by Eoin Treacy

Nevada Regulators Eliminate Retail Rate Net Metering for New and Existing Solar Customers

This article by Julia Pyper for GreenTechMedia may be of interest to subscribers. Here is a section:

The Nevada Public Utility Commission voted unanimously in favor of a new Solar tariff structure on Tuesday that industry groups say will destroy the Nevada Solar market, one of the fastest-growing markets in the country.

The decision increases the fixed service charge for net-metered Solar customers, and gradually lowers compensation for net excess Solar generation from the retail rate to the wholesale rate for electricity, over the next four years. The changes will take effect on January 1 and will apply retroactively to all net-metered Solar customers.

The broad application of the policy sets a precedent for future net-metering and rate-design debates. To date, no other state considering net-metering reforms has proposed to implement changes on pre-existing customers that would take effect right away. Changes are typically grandfathered in over a decade or more.


Eoin Treacy's view -

Renewable energy and distributed generation are two of the greatest threats to established utilities in the sun-belt. If people can generate their own electricity at home, sell excess onto the grid at a favourable rate and only take from the base load provider when necessary, they are put in a highly advantageous position relative to the utility. On the other hand utilities are accustomed to a highly regulated market but not to competition. 

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December 28 2015

Commentary by Eoin Treacy

Hon Hai proposes deal to buy Sharp

This article from Taipei Times may be of interest to subscribers. Here is a section

According to the report, while Hon Hai — known as Foxconn Technology Group (???) outside Taiwan — has proposed acquiring Sharp at a high premium, it also wants Sharp’s current management team, including president and chief executive officer Kozo Takahashi, to step down.
Hon Hai would send a team to Sharp to manage the firm, the report said.

Hon Hai also plans to take over the debt shouldered by Sharp to help the firm address its financial problems, the report said.

However, the report also said that Hon Hai has yet to talk with Sharp’s bank creditors.

The report said that Sharp was shouldering about ?760 billion in debt as of the end of September.
Hon Hai is not the only potential suitor seeking to buy Sharp, the report said, adding that the Innovation Network Corp of Japan (INCJ), which is sponsored by the Japanese government, is studying a buyout of Sharp.

The report said that the INCJ still needs some time to map out a concrete acquisition deal, and the proposal is unlikely to come out until next year, so Hon Hai is taking advantage of the vacuum created to make a deal.


Eoin Treacy's view -

Hon Hai Precision is best known for assembling Apple’s iPhone as well as being one of the world’s largest employers. As a fabless manufacturer it generally does not promote its own brands so the potential acquisition of a manufacturer with global brand recognition such as Sharp is an interesting development. 

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December 21 2015

Commentary by Eoin Treacy

December 17 2015

Commentary by Eoin Treacy

What Just Happened in Solar Is a Bigger Deal Than Oil Exports

This article by Tom Randall for Bloomberg may be of interest to subscribers. Here is a section:

The extension will add an extra 20 gigawatts of Solar power—more than every panel ever installed in the U.S. prior to 2015, according to Bloomberg New Energy Finance (BNEF). The U.S. was already one of the world's biggest clean-energy investors. This deal is like adding another America of Solar power into the mix.

The wind credit will contribute another 19 gigawatts over five years. Combined, the extensions will spur more than $73 billion of investment and supply enough electricity to power 8 million U.S. homes, according to BNEF. 

"This is massive," said Ethan Zindler, head of U.S. policy analysis at BNEF. In the short term, the deal will speed up the shift from fossil fuels more than the global climate deal struck this month in Paris and more than Barack Obama's Clean Power Plan that regulates coal plants, Zindler said.


Eoin Treacy's view -

As I mentioned in yesterday’s commentary. The renewable energy sector is being challenged by the increasingly competitive price structure of fossil fuels but is likely to be supported by regulation for the foreseeable future. With interest rates beginning to rise and capital for infrastructure projects beginning to dry up the announcement tax credits will be extended for an additional 5 years represents a windfall for Solar companies. 

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December 01 2015

Commentary by David Fuller

The Silicon Valley Idea That Is Driving Solar Use Worldwide

Silicon Valley has something to offer the world in the drive toward a clean energy economy. And it’s not technology.

It’s a financing formula. In a region that spawned tech giants Apple Inc. and Google and is famous for innovators and entrepreneurs like Steve Jobs, a handful of startups began offering to install Solar panels on the homes of middle-class families in return for no-money down and monthly payments cheaper than a utility bill. This third-party leasing method -- which made expensive clean energy gear affordable -- ignited a rooftop Solar revolution with annual U.S. home installations increasing 16-fold since 2008, according to the Solar Energy Industries Association and GTM Research.

The world is taking notice. Businesses in China, the biggest greenhouse-gas polluter, are so keen on replicating California’s success that Trina Solar Ltd.’s Head of Global Marketing Jing Tian said she had to come up with a rough Chinese translation for “third-party leasing.” Similar models are spreading to countries like Mexico and Japan and are being employed to sell other emerging clean energy technologies such as batteries and onsite waste-water treatment gear.

David Fuller's view -

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December 01 2015

Commentary by Eoin Treacy

The Silicon Valley Idea That's Driving Solar Use Worldwide

This article by Mark Chediak and Chris Martin for Bloomberg may be of interest to subscribers. Here is a section: 

SolarCity took the leasing model that SunEdison Inc. first developed for the Solar industry by a graduate student named Jigar Shah. He founded the company and sold its first power purchase agreement with Whole Foods Market Inc. in 2003, according to his book, Creating Climate Wealth.
SolarCity adapted that model for residential consumers in 2008 and many more offered similar arrangements including Sunrun Inc., which developed the first one in September 2007, and Vivint Solar Inc. In August, SolarCity bought a developer in Mexico that was offering the first leases to businesses in that country and plans to expand it to homes there.

And now the idea is spreading to other industries trying to sell expensive capital equipment that reduce pollution and fossil fuel consumption. Cambrian Innovation, a startup out of Massachusetts Institute of Technology, has developed onsite wastewater treatment plants. While the high cost make them difficult to sell, when they combine all the benefits to a consumer like a brewery -- lower disposal fees, water use, energy use and carbon emissions -- they can finance leases and offer savings at no cost to the consumer.

“SunEdison developed the Solar power-as-a-service that helped the industry take off,” Matthew Silver, chief executive officer of Boston-based Cambrian, said in an interview. “Now we’re offering clean water as a service that municipal utilities can or won’t do.”


Eoin Treacy's view -

With the COP21 conference beginning in Paris today, there are a large number of articles circulating on the advances already seen in the development of renewable sources of energy. Lease back agreements that have increased access to these solutions is certainly important, but I am curious how these will be structured when interest rates rise and the cost of funding such largesse rises. 

Renewable intermittency means industrial scale storage solutions need to get substantially cheaper and battery technology needs to improve. Progress has been made on both fronts but we are still a long way from replacing fossil fuels. 


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November 23 2015

Commentary by David Fuller

Email of the day

On the Solar industry:

Hi David, There has been some notable movement to the downside in the Solar industry in the last 2 weeks, particularly US based companies. Some of the movement screams capitulation. This is a sector you both regularly comment on, and David Brown, also supports investment in the sector. Do you see this as a buy opportunity?

David Fuller's view -

The main reason that Eoin and I comment on Solar power, or David Brown to my knowledge, is because we are convinced that it will be the most successful of the renewable technologies.  However, I suspect that companies in the Solar industry will remain highly speculative for many years to come.  The reason - it is all but impossible to know which will be the most successful and enduring companies in this comparatively new and rapidly evolving technology.  Moreover, there will be many candidates but most will ultimately fail. 

The same can be said for companies which pioneer any other new technologies, and this has always been the case.  The best example concerns the US automobile sector.  Here is Wikipedia’s List of defunct automobile manufacturers of the United States.  There are hundreds of them, most of which I had never heard of.  Only a handful survived, including Ford, GM and Chrysler.   

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November 04 2015

Commentary by David Fuller

Exxon Predicted the Present Cheap Solar Boom Back in the 1980s

Here is the opening and also a latter section of this interesting article from Bloomberg:

For more than a generation, Solar power was a environmentalist fantasy, an expensive and impractical artifact from the Jimmy Carter era. That was true right up until the moment it wasn't. Solar silicon prices dropped 94 percent from early 2008 to the end of 2011. Crystalline silicon has since fallen an additional 47 percent, to $15.20 a kilogram. 

Many were caught off guard by the emergence of Solar as a competitive power source. The scientist who led Exxon's research arm back in the 1980s wasn't one of them. 

Peter Eisenberger, now an environmental science professor at Columbia's Earth Institute, co-authored an internal report for Exxon projecting that Solar wouldn't become viable until 2012 or 2013. The report, written before he left the company in 1989, suggested that Exxon would do best to sell its Solar assets; not surprisingly, the company did just that. What is surprising is that Exxon's 25-year-old Solar projections nailed the timing for the arrival of affordable Solar power. 


Eisenberger left for academia and in 2010 co-founded a alternative-energy company, Global Thermostat, at which he now serves as chief technology officer. The company works to reduce the cost of capturing atmospheric carbon dioxide and rendering it useful for synthetic fuels and materials. "Almost all the people that are involved in founding this company—and in helping me get going—were from Exxon," Eisenberger said. "Every one of them. They're the only people who didn't think I was nuts."

David Fuller's view -

Exxon and the other large international oil companies are also working on the commercial capturing of atmospheric carbon dioxide, and understandably so.  Unless it can be effectively and cheaply removed and used profitably for something else, oil and other fossil fuels will increasingly be regarded as pariahs. 

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October 22 2015

Commentary by Eoin Treacy

Greenlight Partner Letter

Thanks to a subscriber for this interesting report from Greenlight. Here is a section on SunEdison:

In the weeks before the GLBL initial public offering, SUNE was at its highs and we contemplated trimming the position. Since we expected the UOI would trigger a further advance in the shares, we decided against it. Around the same time, oil and gas prices renewed their declines, causing the values of energy master limited partnerships to justifiably fall. We believed that TERP and GLBL would not be impacted, as neither is subject to commodity risk. We were wrong. Because the SUNE yield vehicles were relatively new to investors, the market did not distinguish them from other energy dividend flow through structures. In mi-July, TERP began falling along with the rest of the sector taking SUNE with it. GLBL IPO’d at a big discount a week later and traded poorly in the aftermarket. 

As GLBL and TERP continued to fall they effectively lost access to the capital markets, and SUNE collapsed as the market because worried that SUNE would be able to sell its projects and could even run out of money. Ironically, the market judged SUNE’s rapidly growing and massive backlog of attractive projects to be a liability. 

SUNE’s hard-to-decipher financial statements fed the stock collapse. SUNE consolidates both TERP and GLBL on its GAAP statements. The complicating result is two-fold. First when SUNE sells a project to TERP or GLBL it bears the operating costs but doesn’t get to book the revenue from the sale. The result is the appearance of an operating loss. Second TERP and GLBL use non-recourse project finance debt to fund the purchases and the debt appears on SUNE’s balance sheet. The result is that SUNE appears to be heavily levered and losing money. From a GAAP perspective that’s true, but from an economic perspective it is not. Nonetheless, this hasn’t stopped some wise guys from dubbing it “SunEnron”. 

SUNE responded to the deteriorating environment by raising additional equity, finding third parties to buy its products, and slowing it development pipeline. All of these actions have marginally lowered the company’s value, but have stabilized the situation. Taking into account the more conservative business plan, when we look through the complicated financials we believe that SUNE’s development business is poised to have economic earnings in 2016 of about $1.34 per share, assuming that TERP and GLBL do not regain access to the capital markets. 


Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

In the movable feast of renewable energy breakeven estimates it’s hard to argue that lower oil and particularly natural gas prices skew the calculation. Solar technology is advancing at a prodigious rate but not so fast that companies can compete with energy prices which more than halved in a year. This has weighed on the sector in the short term but it is hard to argue with government mandates that utilities have to buy energy from renewable sources. 

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October 08 2015

Commentary by Eoin Treacy

SolarCity Unveils World's Most Efficient Rooftop Solar Panel, To Be Made in America

This press release from SolarCity may be of interest to subscribers. Here is a section:

SolarCity will begin producing the first modules in small quantities this month at its 100 MW pilot facility, but the majority of the new Solar panels will ultimately be produced at SolarCity’s 1 GW facility in Buffalo, New York. SolarCity expects to be producing between 9,000 - 10,000 Solar panels each day with similar efficiency when the Buffalo facility reaches full capacity.

SolarCity’s panel was measured with 22.04 percent module-level efficiency by Renewable Energy Test Center, a third-party certification testing provider for photovoltaic and renewable energy products. SolarCity’s new panel—created via a proprietary process that significantly reduces the manufacturing cost relative to other high-efficiency technologies—is the same size as standard efficiency Solar panels, but produces 30-40 percent more power. SolarCity’s panel also performs better than other modules in high temperatures, which allows it to produce even more energy on an annual basis than other Solar panels of comparable size.

SolarCity initially expects to install the new, record-setting Solar panel on rooftops and carports for homes, businesses, schools and other organizations, but it will also be excellent for utility-scale Solar fields and other large-scale, ground level installations.


Eoin Treacy's view -

The low price of oil and other energy commodities has taken a toll on the moveable feast of Solar power breakeven calculations. The sector simply has to continually introduce more efficient products and there is good reason to expect it will. Solarcity’s announcement of a production-ready panel sporting 22% efficiency is great news provided the final announced price is competitive. In the lab efficiency rates of over 40% are achievable but it’s a big leap from a sterile environment to rooftops. This is the primary reason SolarCity’s announcement is important. 

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September 17 2015

Commentary by Eoin Treacy

Email of the day on Tesla

My hunch - but I may be wrong - is that electric cars are relatively easy to build... there is not much technology in an electric engine, no complexity; as for the batteries (which I understand are Panasonic's in the case of Tesla, which assembles them together in very large modules) I understand that the know how is not really in the hands of Tesla or any other producer (even Renault/Nissan stopped developing in house technology) and therefore someone else did the clever job. 

As a first mover Tesla has very competently built a good product, taking risk only where strictly necessary: luxury brand (low risk) with traditional, long bonnet, probably off the shelf design (low risk), an old chassis for the roadster, well tested batteries. Also, the complexity of electric power train - compared even with a small 1ltr engine - is little: there are fewer (almost none in fact) moving parts, no gear box. No way a new producer could enter the industry with its own internal combustion engines, but the electric car gives this opportunity.  A good demonstration of this is that Tesla's provisions for warranties are in line with those of a mature manufacturer with a well-tested line up of cars... probably Tesla know that there is so little in an electric car that can actually go wrong.

Traditional producers have held off from making a proper move into the sector not to cannibalize their current products and make all R&D and Capex in a probably obsolete technology completely worthless. After all they can catch up quickly: the difference between a Tesla, and a BMW or Nissan Leaf or 500e is purely the size of the battery, whose development risk is not theirs... On paper, a Leaf may have the range of a Tesla simply by doubling the size of the battery. In the meanwhile, no necessity of taking the risk of killing their current baroque business model, made of V12, V6, boxer, in line 4 or 3 or 2 cylinder hyper complex engines that you have to service all the time and last 300k when of exceptional quality.

Traditional car manufacturers will "tolerate" Tesla as far as it does not build a too strong brand (ludicrous speed is genius by the way: intrinsic of electric engine, easy to do, but presented as cool high tech stuff), then move in and with their economies of scale and less vertically integrated structure quickly catch up... it will be dear, but unavoidable as Tesla made clear it is possible to achieve a usable and fun product with no petrol engine.? VW making its move,? but I guess everyone if working on something. 

What I think could get ugly in this story - from the point of view of Tesla shareholders - is the excessive use of dodgy accounting (there are examples), the glorification of the CEO and its ideas (never good in a plc), just to get hold of capital for a venture that is extraordinarily risky and liable to competitive pressures from corporations much larger and much more sophisticated. How far will the individual Musk go to keep the business going? He is very successful, people love him, Tesla S has been voted best car ever. Difficult to give that up, right?

Did not look at the other businesses of his, with Space X he is against defence and/or state run companies... difficult.

Anyway, just a thought, I may be completely wrong...


Eoin Treacy's view -

Thank you for this detailed email and I agree that with valuations as they currently stand Tesla does not have a great deal of margin for error. The company has lost money in every quarter since 2013 but less than analysts estimated which has helped support the massive run-up in prices. 

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September 07 2015

Commentary by Eoin Treacy

Yingli Fights to Survive as Another Solar King Dethroned

This article by Alex Nussbaum for Bloomberg may be of interest to subscribers. Here is a section: 

One of those investments was the 2009 purchase of Cyber Power Group Ltd. for $77.6 million, a company that makes polysilicon, the main raw material in Solar cells. Yingli’s founder and Chief Executive Officer Miao Liansheng invested another $270 million to upgrade the plant. The project made more sense then, when the material sold for $400 a kilogram; today, it can be bought for less than $20, said Angelo Zino, an S&P Capital IQ analyst in New York.

Yingli spent aggressively on marketing as well, including sponsoring the World Cup. Its logo was prominent during matches in Brazil last year. “They spent on capacity, they spent quite a bit on marketing,” Sanganeria said. “They took everything to the extreme.”

Suntech and Q-Cells faced similar issues, borrowing to expand capacity and then finding themselves constrained by debt, said Raymond James’ Molchanov. Both struggled to cut manufacturing costs fast enough to keep up with the market. The challenge was exacerbated starting in 2011 when slowing demand in Europe led to a global oversupply of panels and falling prices.

Eoin Treacy's view -

The problem for Solar cell manufacturers is that the primary bullish case for Solar is that Moore’s law can now be applied because it is a technology rather than an extractive resource. This means companies relying on producing legacy products, when technology is advancing rapidly are being left behind and often with high debt loads. 

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August 27 2015

Commentary by Eoin Treacy

Email of the day on oil and oil shares

Hope isn’t a strategy – but what can you tell me about this chart?   It’s the Canadian energy index.  What signs should I be looking for?

Eoin Treacy's view -

This has been a very active week in just about all markets but the only emails from subscribers I received in the last two days were focused on the energy market. I chose to publish this one because it’s from a normally very calm person but the stress he is feeling is evident in the wording. 

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July 20 2015

Commentary by Eoin Treacy

Make way for the Sun

Thanks to a subscriber for this report from Deutsche Bank which may be of interest. Here is a section: 

India has made an exceptional commitment to Solar energy by raising its 2022 target five-fold to 100GW and its Renewable Energy target to 175GW. The government has announced an unprecedented policy push and states are providing the necessary infrastructure. Annual investments in Solar could surpass investment in coal by 2019-20, with USD 35bn committed by global players. For local IPPs, Solar has to be an inherent part of their expansion strategy, as RE obligations become strictly enforceable and cost of coal power increases. NTPC, Adani and RPWR are ahead in this development cycle which  adds 10-15% to our current valuations. NTPC is our top pick.

We raise our Solar power forecast by 240%
Global majors have committed USD 35bn+ to the Indian Solar sector. By 2020, annual Solar power capacity additions and investments could surpass those in coal power projects. We are raising our Solar power forecasts by 240% to 34GW by 2020. This is on the back of strong commissioning (4.5GW), even stronger pipeline - under construction (~5.1GW), and new projects (~15GW). By then, renewables could account for a significant 20% of power capacities in India, per our forecast. Private sector interest is decisively moving towards Solar from coal power, and we foresee numerous opportunities of fund-raising, yield co-structuring and M&A activity.

RE can reach 20% of capacity but we see challenges to higher penetration
(1) Transmission constraints and integration of diurnal power into the grid are risks, without peak-load management capability. Solar absorption in Rajasthan could see challenges like wind in Tamil Nadu, given policy target of 25GW Solar vs. peak-demand of 11GW. (2) A further risk is the enforcement of RE purchase obligations (RPOs) given weak finances of state distribution cos, and hence large-scale absorption of Solar could be a concern (INR 170bn additional burden by 2020E). (3) Other issues include financing, land acquisition, limited domestic manufacturing, and returns/reliability of baseline data. 

Impact on the thermal power producers 
Solar could have a significant impact on day power rates, given that generation peaks between 9am and 6pm. In turn, this could reduce the coal requirement by ~8% or 70mnt by 2020E, largely impacting the highest cost of power, i.e., imported coal – leading to large savings (~USD 17bn/pa).

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

India has highly favourably demographics but if that dividend is to be realised the country needs to embark on a long-term policy of industrialisation. Narendra Modi’s government understands what has to be done and is gradually making the changes needed to unlock India’s considerable development potential. 

On its path to industrialisation China built huge numbers of coal fired power stations which facilitated growth but poisoned the air. It is now faced with an environment challenge that is proving expensive to correct. India has the potential to  partially circumvent at least these challenges by taking advantage of improvements in technology that were not available to China when it began to industrialise. 


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June 23 2015

Commentary by Eoin Treacy

The Way Humans Get Electricity Is About to Change Forever

This article by Tom Randall for Bloomberg may be of interest to subscribers. Here is a section: 

The price of Solar power will continue to fall, until it becomes the cheapest form of power in a rapidly expanding number of national markets. By 2026, utility-scale Solar will be competitive for the majority of the world, according to BNEF. The lifetime cost of a photovoltaic Solar-power plant will drop by almost half over the next 25 years, even as the prices of fossil fuels creep higher.

Solar power will eventually get so cheap that it will outcompete new fossil-fuel plants and even start to supplant some existing coal and gas plants, potentially stranding billions in fossil-fuel infrastructure. The industrial age was built on coal. The next 25 years will be the end of its dominance.  

2. Solar Billions Become Solar Trillions
With Solar power so cheap, investments will surge. Expect $3.7 trillion in Solar investments between now and 2040, according to BNEF. Solar alone will account for more than a third of new power capacity worldwide. Here's how that looks on a chart, with Solar appropriately dressed in yellow and fossil fuels in pernicious gray:  

3. The Revolution Will Be Decentralized 
The biggest Solar revolution will take place on rooftops. High electricity prices and cheap residential battery storage will make small-scale rooftop Solar ever more attractive, driving a 17-fold increase in installations. By 2040, rooftop Solar will be cheaper than electricity from the grid in every major economy, and almost 13 percent of electricity worldwide will be generated from small-scale Solar systems.


Eoin Treacy's view -

The pace of technological innovation in Solar is rapid and the argument that Moore’s law is applicable is gaining ground as the sector attached increasing research and development spending. The difficulties reported in getting the Ivanpah concentrated Solar facility, in the Mojave Desert, up to peak performance is a setback suggesting the time required to deliver new technologies might be longer than some are currently envisaging. Here is a section from a Huffington Post piece dated November 17th: 

"During startup we have experienced ... equipment challenges, typical with any new technology, combined with irregular weather patterns," NRG spokesman Jeff Holland said in a statement. "We are confident that Ivanpah's long-term generation projections will meet expectations."

The technology used at Ivanpah is different than the familiar photovoltaic panels commonly used for rooftop Solar installations. The plant's Solar-thermal system — sometimes called concentrated-Solar thermal — relies on nearly 350,000 computer-controlled mirrors at the site, each the size of a garage door. 


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June 17 2015

Commentary by David Fuller

India Courts Solar Investors With Dollar Contracts

My thanks to a subscriber for this informative article from  Here is a brief sample:

Solar developers say the introduction of such contracts, which would protect investors from the expected depreciation of the rupee over the next 25 years, would overcome one of the last remaining obstacles to new investments and cement India’s position as the next big destination for renewable energy groups.

“The scale-up will happen extremely rapidly,” says Tejpreet Chopra, chief executive of Bharat Light & Power, which plans to quintuple its wind and Solar output in India to 1,000 megawatts (1GW) in the next few years. “The good news is that at least the government is showing intent. In order to do this scale of projects, we’re going to need foreign capital.”

Piyush Goyal, the minister responsible for power and renewable energy, launched bold plans a year ago to provide electricity 24 hours a day for all Indians by 2019, partly from ever cheaper green power: the plan for the Solar sector is to spend $100bn to raise capacity from just under 4GW today to 100GW by 2022. An estimated 400m Indians lack basic access to electricity. Coal remains India’s most important energy source, supplying more than half of all power stations.

David Fuller's view -

According to a graph in the article above, only China, Japan, the USA, and UK will be adding more Solar capacity in 2015.  Moreover, with Narendra Modi leading India, this rapid development will continue for many more years.

To grow rapidly, India needs vastly more energy.  This is certainly possible and, preferably, India will be able to phase out most of its reliance on coal within the next 20 years.  In today’s world, good leadership can modernise a third-world economy in a little over a generation.  

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June 08 2015

Commentary by Eoin Treacy

From cars to power grids: battery technology from Daimler is accelerating the transition to renewable energy generation

This article from Daimler highlights its entry into the domestic and commercial energy storage sectors. Here is a section:

Daimler is entering into business in the field of stationary energy storage plants with its one hundred percent subsidiary Deutsche ACCUmotive. The first industrial-scale lithium-ion unit is already on the grid and is being operated by the partner companies The Mobility House AG and GETEC Energie AG. For business with private customers in the area of energy storage in Germany, Daimler AG is planning to collaborate with EnBW AG. Daimler is also aiming to enter into cooperation with other sales and distribution partners both in Germany and at international level. "Mercedes-Benz energy storages provide the best confirmation that lithium-ion batteries Made in Germany have a viable future," says Harald Kröger, Head of Development Electrics/Electronics & E-Drive Mercedes-Benz Cars. "With our comprehensive battery expertise at Deutsche ACCUmotive we are accelerating the transition to sustainable energy generation both on the road and in the field of power supply for companies and private households. The technology that has proven its worth over millions of kilometres covered in the most adverse conditions, such as extreme heat and cold, also offers the best credentials for stationary use. We have been gathering initial experience in this field since 2012."

Eoin Treacy's view -

Daimler was in the news last month for its introduction of driverless haulage vehicles to Nevada following the state’s legislation on autonomous vehicles. The company’s entry into the domestic and commercial energy storage sectors is equally ground breaking and suggests it has ambitions of being a pioneer in the future of transportation and energy storage. 

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June 02 2015

Commentary by Eoin Treacy

Platinum sector faces Kodak moment in fuel cell technology

This article by Clara Denina & Silvia Antonioli for Mineweb may be of interest to subscribers. Here is a section: 

The world’s three largest platinum producers Anglo American Platinum (Amplats), Impala Platinum and Lonmin are all investing in projects related to fuel cell technologies, which generate electricity that can power vehicles by combining hydrogen and oxygen over a platinum catalyst.

But analysts doubt fuel cell vehicles will rival the growth of their electric counterparts, mostly because battery recharging stations are less costly and already more widespread than hydrogen refuelling stations.

“As out of the two new technologies only fuel cells use platinum, I guess the miners think they have no choice,” Macquarie analyst Matthew Turner said. “But people are buying electric cars…and that’s not the case for fuel cells.”

Amplats, which has invested about $35 million in the last five years in companies developing new uses for platinum, mostly through fuel cell technology, is mindful of the stakes.

“I don’t want Anglo American Platinum, or any of our partners or customers to be a Kodak,” Amplats Chief Executive Chris Griffith said last week, referring to the once mighty photography pioneer that was slow to transition to digital photography.


Eoin Treacy's view -

Platinum miners are not the only companies making big bets on hydrogen fuel cells. Toyota’s decision to release its Mirai fuel cell vehicle later this year and to open its patents to developers highlights their efforts to pioneer new technologies. After all it was Toyota’s Prius that was the first mass market hybrid vehicle. 

Nevertheless, electric cars are gaining increasing traction as Solar cell efficiency increases. There is also the potential for wind turbines to be smaller and less noisy. With the advent of home batteries the outlook for electric vehicles is looking even more promising. 

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May 15 2015

Commentary by Eoin Treacy

SMA Solar Jumps in Frankfurt as U.S., Japan Sales Narrow Losses

This article by Stefan Nicola for Bloomberg may be of interest to subscribers. Here is a section: 

SMA Solar Technology AG, a German Solar company that’s cutting a third of its staff to reduce costs, rose to a three-week high in Frankfurt after first-quarter sales jumped and losses narrowed.

SMA climbed as much as 5.9 percent to 14.50 euros, the highest intraday level since April 23, after saying sales grew 28 percent to 226 million euros ($254 million) and a loss on earnings before interest and taxes narrowed to 5.4 million euros. Sales were driven by large-scale Solar projects in North America, Japan, the U.K. and Australia, it said.

“With the sales generated and the order backlog at the end of the first quarter, we have already achieved more than 60 percent of our sales target for the year,” Chief Executive Officer Pierre-Pascal Urbon said. “The earnings situation developed better than planned, partly due to the reduction of fixed costs already initiated and to exchange rate effects.”


Eoin Treacy's view -

Solar cells produce direct current but if you want to it to power your home, heat your water or sell electricity back onto the grid it needs to be inverted into alternating current. Therefore everyone who buys Solar cells must also buy an inverter. While SMA Solar is a global leader in manufacturing inverters it is not the cheapest. 

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May 14 2015

Commentary by Eoin Treacy

Solar and Silver

Eoin Treacy's view -

David posted an article from the Telegraph on Monday highlighting the role silver plays as a conductor in Solar cells. Considering the fact that silver suffered from a loss of demand with the demise of photographic film, the potential for growth in another industrial sector is a potentially important bullish catalyst. In order to gain some additional perspective on just how much of a growth sector this might represent for sliver there are two key considerations. The first is demand growth projections which are bullish and second the capacity for technological innovation which is potentially bearish.

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May 12 2015

Commentary by Eoin Treacy

Email of the day on a name change:

New Energy Technologies Inc (WNDW US Equity) 2.0240  has recently changed their name  to Solar WINDOW TECHNOLOGIES.(WNDW US Equity) 2.0240   They are closer to production than  Ubiquitous Energy

Eoin Treacy's view -

Thank you for pointing out this name change which has a more marketable ring to it than New Energy Technologies. I've been watching the company for a number of years. If I recall correctly T.Boone Pickens was an early investor and I learned of the company following an interview he gave on CNBC 

I've been watching the share since in the hope they would come through with a marketable product. 

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May 11 2015

Commentary by David Fuller

Silver No Longer Poor Man Gold as Solar Demand Surges

Silver has been mined for thousands of years. But for most of the 20th century it was the poor man’s precious metal, its value eclipsed by the enduring lure of gold.

The first big revolution in silver came in 1492 with the discovery of the New World, which opened up mining of the metal on a scale not previously seen. In the centuries that followed Hernán Cortés and the conquistadors’ destruction of the Aztecs, Peru, Bolivia and Mexico accounted for three-quarters of all world production and trade in the metal.

Today, more than 877m ounces of silver are mined annually and the metal is increasingly being employed in new industrial processes. A major catalyst for demand over the next decade will be in the production of Solar energy.

Silver is a key component in crystalline silicon photovoltaic (PV) cells. According to IHS, demand for Solar power is set to increase by 30pc to 57 gigawatts of electricity in 2015. China alone is expected to install something in the region of 17 gigawatts of Solar capacity by the end of the year, creating huge potential demand for silver.

David Fuller's view -

This is the first bullish news that I have heard about silver since it peaked near $50 just over four years ago.

This item continues in the Subscribers’ Area.

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May 01 2015

Commentary by Eoin Treacy

Elon Musk Challengers Jostle to Solve Riddle of Energy Storage

This article by Will Wade for Bloomberg may be of interest to subscribers. Here is a section:

If the storage breakthrough is coming, it seems obvious it would happen in California, which has long led the U.S. in supporting alternative energy. The state has the most demanding fuel-efficiency standards for cars, as well as incentives that have made it the biggest market for Solar power in the U.S.

California “is often a lab” for the rest of the country, said Brian Warshay, an analyst at Bloomberg New Energy Finance. It will “continue to be so on the storage front.”

Older methods of trying to store power have existed for decades, including pumped hydropower facilities in which water is sent to higher elevation reservoirs and released through lower turbines to produce electricity when demand is high.


Eoin Treacy's view -

Here is a link to Tesla’s website where they highlight some of the key features of the Powerwall battery. Perhaps the most important consideration today is that almost no one has a battery in their home and that in a decade it could be commonplace. I reviewed the residential battery sector on April 23rd

As much as smoothing out supply and demand curves for electricity use in the home are interesting, the industrial and utility sectors are just as exciting. 


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April 29 2015

Commentary by Eoin Treacy

Email of the day on solar cell manufacturers

This was a useful update on the Solar industry and Canadian Solar in particular. CSIQ's chart pattern seems to show 1 year range between $20 and $40. Maybe time for a breakout?

Eoin Treacy's view -

Thank you for this topical article. . Here is a section: 

Along with government incentives to combat global warming, a more natural economic process in the marketplace is driving quick growth in demand for Solar power. Cheaper panels and cheaper batteries mean that not too long from now consumers will simply put Solar panels on their roofs because that is cheaper than buying electricity off the grid.

The U.S.-based Rocky Mountain Institute warned earlier this month that utilities in the U.S. Northeast stand to lose as much as half of residential sales by 2030 as customers install Solar and battery-storage systems and generate their own power.

To keep up with this increase in demand, Canadian Solar plans to almost double its own panel capacity from 2013 levels, Qu said. Along with supply from original equipment manufacturing, total capacity will reach more than 4 gigawatts, he said.


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April 27 2015

Commentary by Eoin Treacy

Audi just created diesel fuel from air and water

This article by Eric Mack for Gizmag highlights the benefits improving Solar cell efficiency could potentially have for the wider economy. Here is a section: 

Sunfire claims that analysis shows the properties of the synthetic diesel are superior to fossil fuel, and that its lack of sulphur and fossil-based oil makes it more environmentally friendly. The overall energy efficiency of the fuel creation process using renewable power is around 70 percent, according to Audi.

"The engine runs quieter and fewer pollutants are being created," says Sunfire CTO Christian von Olshausen.

The fuel can be combined with conventional diesel fuel, as is often done with biodiesel fuels already.

The Dresden pilot plant is set to produce about 42 gallons (160 l) of synthetic diesel per day in the coming months, and the two companies say the next step is to build a bigger plant.

"If we get the first sales order, we will be ready to commercialize our technology," von Olshausen says.

Sunfire anticipates that the market price for the synthetic diesel could be between 1 and 1.5 Euros per liter, which would be nearly competitive or a little more expensive than current diesel prices in Europe, but the actual figure will be largely dependent on the price of electricity.


Eoin Treacy's view -

One of the issues hydrogen fuel cell and similar technologies face is that they are dependent on the availability of cheap electricity to drive the process of separation or combination. The commercial utility of a water-to-diesel project as outlined above will be contingent on the cost of electricity coming down. As such the improving efficiency of Solar cells and improvements in battery technology represent a major step forward for such technologies as the cost of electricity would be free from volatility and could conceivably trend lower in real terms over time. 

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April 23 2015

Commentary by Eoin Treacy

Tesla Wants to Power Wal-Mart

This article by Dana Hull for Bloomberg may be of interest to subscribers. Here is a section: 

Jackson Family Wines, based in Santa Rosa, has a new partnership with Tesla involving battery storage and several vehicle charging stations, according to the February issue of Wine Business Monthly. The winery declined to comment.

Mack Wycoff, Wal-Mart’s senior manager for renewable energy and emissions, said the company is intrigued by energy storage. “Instead of pulling electricity from the grid, you discharge it from the battery,” he said. “Ideally you know when your period of peak demand is, and you discharge it then.”

Mike Martin, Cargill’s director of communications, declined to provide details about how the company plans to use Tesla batteries at the Fresno plant. The 200,000-square-foot facility, one of the largest of its type in California, produces nearly 400 million pounds of beef each year.

Janet Dixon is director of facilities at the Temecula Valley Unified School District in southern California, which plans to install Solar panels at 20 of its 28 schools this summer. Dixon said that SolarCity is the Solar provider, and five of the facilities will have Tesla batteries.

“We spend roughly $3 million a year on electricity, and most of that is lighting and air conditioning,” said Dixon. “We are going Solar to reduce our overall costs and the battery storage should help us manage our peak demand.”

Eoin Treacy's view -

Tesla trades on aggressive multiples. Since its car sales are a fraction of even the smallest auto manufacturer, it will be quite some time before the company will compete on that front even if one assumes that large numbers of people will be driving electric vehicles 10 years from now. Batteries are a much bigger story for Tesla which is why they are investing so much capital in building a “gigafactory” which they anticipate will deliver the economies of scale necessary to drive down the cost of their products.

At the present moment almost no one has a battery in their home. As Solar technology improves and the prospect of containing volatility on energy spending becomes a realistic possibility demand is likely to increase. At the present moment the Solar cells companies like SolarCity are installing in homes are not particularly efficient. However, as the efficiency rates of laboratory tested products reach commercialisation the energy generation capacity of one’s home will rapidly improve. Therefore the efficiency of Solar and the potential demand landscape for home batteries are linked. 

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March 23 2015

Commentary by David Fuller

March 19 2015

Commentary by Eoin Treacy

Radical new high-speed liquid technology could bring 3D printing into mainstream manufacturing

Thanks to a subscriber for this article from Kurzweil which may be of interest. Here is a section:  

The technology, called Continuous Liquid Interface Production (CLIP), manipulates light and oxygen to fuse objects in liquid media. It works by projecting beams of light through an oxygen-permeable window into a liquid resin to rapidly transform 3D models into physical objects.

Working in tandem, UV light, which triggers photo polymerization, interacts with oxygen, which inhibits the reaction, to control the solidification of the resin, creating commercially viable objects that can have feature sizes below 20 microns, or less than one-quarter of the width of a piece of paper. This is the first 3D-printing process that uses tunable photochemistry instead of the layer-by-layer approach that has defined the technology for decades.

Faster, stronger, predictable
CLIP enables a very wide range of materials to be used to make 3D parts with novel properties, including elastomers, silicones, nylon-like materials, ceramics and biodegradable materials, and could allow for synthesizing novel materials that can advance research in materials science.
Conventionally made 3D printed parts are notorious for having mechanical properties that vary depending on the direction the parts were printed because of the layer-by-layer approach. Much more like injection-molded parts, CLIP produces consistent and predictable mechanical properties, smooth on the outside and solid on the inside, the company says.

“By rethinking the whole approach to 3D printing, and the chemistry and physics behind the process, we have developed a new technology that can create parts radically faster than traditional technologies by essentially ‘growing’ them in a pool of liquid,” said Joseph M. DeSimone, professor of chemistry at University of North Carolina-Chapel Hill and of chemical engineering at North Carolina State and CEO of Carbon3D, who co-invented the method.


Eoin Treacy's view -

It’s not difficult to get excited when you look at the pace of technological innovation. The above invention has been featured on CNBC with someone attempting to print an AR-15 which shows the negative connotations of the development. Setting that example aside, this represents an important step towards having a practical tool in one’s home but there are more important considerations from an investment perspective. 

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March 02 2015

Commentary by Eoin Treacy

Crossing the Chasm

Thanks to a subscriber for this report from Deutsche Bank focusing on Solar. Here is a section:

Despite the recent drop in oil price, we expect Solar electricity to become competitive with retail electricity in an increasing number of markets globally due to declining Solar panel costs as well as improving financing and customer acquisition costs. Unsubsidized rooftop Solar electricity costs between $0.08-$0.13/kWh, 30-40% below retail price of electricity in many markets globally. In markets heavily dependent on coal for electricity generation, the ratio of coal based wholesale electricity to Solar electricity cost was 7:1 four years ago. This ratio is now less than 2:1 and could likely approach 1:1 over the next 12-18 months.

Electricity Prices are Increasing, Despite Nat Gas Price Swings
Peak to trough, average monthly natural gas prices have decreased ~86% over the past 10 years. Yet, during this time period, average electricity prices have increased by ~20% in the US. The main driver for rising electricity bill is that T&D investments which represent 50% of bill have continued to ramp and have accelerated recently. In 2010, T&D capex levels of for US Utilities ~$27B were ~300% higher than 1981 levels. We expect electricity prices worldwide to double over the next 10-15 years making the case for Solar grid parity even stronger.

Solar System Costs Could Continue to Decline
The economics of Solar have improved significantly due to the reduction in Solar panel costs, financing costs and balance of system costs. Overall Solar system costs have declined at ~15% CAGR over the past 8 years and we expect another 40% cost reduction over the next 4-5 years. Yieldcos have been a big driver in reducing the cost of capital and we expect emergence of international yieldcos to act as a significant catalyst in lowering the cost of Solar power in emerging markets such as India.


Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

This is a fascinating report not least for its international scope and estimates of where Solar has already reached grid parity. China is where Solar has the greatest potential to impact power production for two important reasons. The first is that the world’s largest Solar cell manufacturers are Chinese. The second is that China has some of the worst pollution in the world. 

A documentary film released online over the weekend by Chai Jing, discussing the causes of China’s poor air quality, has gone viral with more than 120 million hits to date. If domestic Chinese people are as outraged at the total absence of environmental law enforcement as Mrs Treacy there is going to be a major discussion about the environment. 


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February 26 2015

Commentary by Eoin Treacy

Tesla gearing up for release of batteries for the home

This article by John Anderson for Gizmag may be of interest to subscribers. Here is a section: 

As the company’s first foray into selling directly to the home energy storage market, the batteries are expected to get plenty of attention just by virtue of the attached Tesla label. And it should be an improvement from the home batteries Tesla has been quietly supplying to its sister company, the Solar panel maker SolarCity, located up the road from Tesla in San Mateo, California. Those batteries are currently available in select markets within California, and only through SolarCity. The new batteries would be more widely available.

Tesla would face plenty of competition for their batteries, with names like Bosch, GE and Samsung involved. Honda has unveiled a demonstration smart home that features a rechargeable home battery, along with an electric vehicle, Solar panels and geothermal heat pump, and is driven by an energy management system.

Researchers from both Harvard and MIT have developed flow batteries for renewable energy storage, while Bloom Energy’s fuel cell boxes act as a power source as well as an energy storage device.

One area where Tesla might stand out is in cost. Tesla assembles its battery packs from battery cells provided by Panasonic, and is about to do it on a massive scale as soon as 2016 at its gigafactory currently under construction in Nevada. Such an economy of scale – producing 50 gigawatt-hours of battery capacity each year – is expected to push the company’s car battery costs down by 30 percent. Based on the same technology, Tesla's home battery costs should come down as well.


Eoin Treacy's view -

The same efficiency gains observed in how Moore’s Law is applied to semiconductors can also be seen in Solar technology. This has changed how companies perceive the growth of the domestic energy production sector. This requires a much more flexible electric grid and a utility sector that will have to evolve if it is to avoid obsolescence. As the potential to cut one’s personal expenses through the application of technology develop, homebuilders will be happy to see that the benefits of owning a new home equipped with the wide range of modern gadgetry is becoming increasingly convincing. 

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February 19 2015

Commentary by Eoin Treacy

Shale Giant Says U.S. Output Will Fall This Year on Big Cuts

This article by Bradley Olson for Bloomberg may be of interest to subscribers. Here is a section:

U.S. oil production is set to fall this year as drastic drilling cutbacks take hold faster than world governments expected, according to the biggest, fastest-growing shale company.
EOG Resources Inc.’s forecast contradicts most estimates that see U.S. production rising, including those by the U.S. Energy Information Administration and the International Energy Agency. The company said the crude market would rebound quickly and labeled the current downturn a “short cycle.”

The Texas producer said its own production would bottom in the second and third quarter, resulting in output remaining unchanged for the year compared to last year’s breakneck pace of growth. The deciding factor in what has been viewed as a price war with Saudi Arabia and its OPEC allies is how many of the thousands of U.S. producers will follow suit.
“EOG is viewed as the premier company in shale development, and if they’re not going to grow, it is a very important signal to the market,” said Michael Scialla, a Denver-based analyst at Stifel Nicolaus & Co. “The argument that this slowdown is going to take a while to have an impact on supply is completely wrong.”


Noble Energy Inc., Devon Energy Corp. and Marathon Oil Corp., three other companies with significant shale operations, said they will boost output this year. More than half of Devon’s 2015 oil production is hedged at a price of $90.75 a barrel. Apache Corp. plans to pump about the same volume of oil as last year.


Eoin Treacy's view -

The mechanics of unconventional oil and gas wells means that supply growth is not possible without constant drilling of new wells to make up for the early peak in production from older ones. It is for this reason that the Baker Hughes Rig Count has become such a focus of attention as prices fell. In a low oil price environment, at least relative to that seen early last year, unhedged producers have little choice but to cut back on expansion plans. Those that have hedged have secure cash flow, provided their counterparties are solvent, so they will be under less pressure to cut.

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February 11 2015

Commentary by David Fuller

What Apple Just Did in Solar Is a Really Big Deal

Here is the opening of this topical article from Bloomberg:

It was a year ago this week that Apple Chief Executive Officer Tim Cook responded to a climate-change heckler at the company's annual shareholder meeting with an impassioned rebuttal in which he famously told investors who care only about profits to "get out of the stock."

Now Cook is putting his prodigious sums of money where his mouth is, proclaiming the “biggest, boldest and most ambitious project ever,” an $850 million agreement to buy Solar power from First Solar, the biggest U.S. developer of Solar farms. The deal will supply enough electricity to power all of Apple’s California stores, offices, headquarters and a data center, Cook said Tuesday at the Goldman Sachs technology conference in San Francisco.

It’s the biggest-ever Solar procurement deal for a company that isn't a utility, and it nearly triples Apple’s stake in Solar, according to an analysis by Bloomberg New Energy Finance (BNEF). “The investment amount is enormous,” said Michel Di Capua, head of North American research at BNEF. “This is a really big deal.”

David Fuller's view -

Iconic Apple can only increase US and also global interest in Solar power.  It remains far more flexible and adaptable in terms of instillations than any other source of electricity.  It also has more scope for lower costs because Solar benefits more from technological progress than any other source of power.

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February 02 2015

Commentary by Eoin Treacy

Oil Bears Miss Biggest Rally Since 2012 as Rigs Withdraw

This article by Moming Zhou for Bloomberg may be of interest to subscribers. Here is a section:

The United Steelworkers union, which represents employees at more than 200 U.S. oil refineries, terminals, pipelines and chemical plants, began a strike at nine sites on Sunday, the biggest walkout called since 1980. A full walkout of USW workers would threaten to disrupt as much as 64 percent of U.S. fuel production.

The U.S. oil rig count dropped to a three-year low of 1,223, Baker Hughes said Jan. 30. Drillers idled 352 oil rigs in eight weeks.

Royal Dutch Shell Plc, Occidental Petroleum Corp. and ConocoPhillips alone said they would reduce spending by almost $10 billion this year.

Chevron Corp. cut its drilling budget by the most in 12 years and said it may delay some shale projects. The company is targeting $35 billion in capital projects this year, from $40.3 billion in 2014.

“Oil production growth should be flat or declining by May or June unless there’s some substantial recovery in oil prices,” James Williams, an economist at WTRG Economics, an energy-research firm in London, Arkansas, said by phone Jan. 30.


Eoin Treacy's view -

Falling prices necessitate that those heavily impacted by the decline act. Oil companies cutting investment is an expected response and they will be slow to ramp back up now that they have relearned how swiftly prices can fall when supply exceeds demand. Striking union workers introduces a fresh dynamic and could act as a bullish catalyst if they succeed in withholding supply from the market. 

Brent Crude rallied by an additional $1.80 today to take the bounce to almost $10 from the mid- January low. This is the largest rally since the onset of the decline in June and suggests short covering is underway. Considering the speed and depth of the decline there is ample room for mean reversion and an unwind of the short-term oversold condition. However once this rally has run its course a potentially lengthy period of support building will probably be required before a return to medium-term demand dominance will be in evidence.  


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January 15 2015

Commentary by David Fuller

Dubai Doubles Power-Plant Size to Make Cheapest Solar Energy

Here is the opening of this interesting report from Bloomberg:

Dubai’s government-owned utility plans to double the size of a Solar power project that it expects will produce some of the world’s cheapest electricity.

Dubai Electricity & Water Authority awarded a contract to build the 200-megawatt plant to a group led by Saudi Arabia’s ACWA Power International. The 1.2 billion dirham ($330 million) generating station will be completed in April 2017, DEWA Chief Executive Officer Saeed Mohammed Al Tayer said yesterday at a news conference in the Persian Gulf emirate.

ACWA will sell electricity from the plant to DEWA at 5.85 cents per kilowatt-hour, a price that will be “the lowest by far” for Solar power globally and among the cheapest from other sources, Paddy Padmanathan, the Riyadh-based company’s CEO, said in an interview.

Dubai plans to build 1,000 megawatts of Solar capacity by 2030, enough to meet 5 percent of its forecast electricity needs that year, as it seeks to reduce reliance on natural gas as its main source of energy for local use. Saudi Arabia and Abu Dhabi, the U.A.E.’s capital and largest emirate, are also developing renewable energy as oil producers in the Gulf try to reduce the burning of costlier fossil fuels to produce power.

David Fuller's view -

There will be no stopping Solar power, which is by far the most flexible energy source, coming in units of variable sizes and shapes.  The efficiency of new Solar panels improves every year, simultaneously lowering costs.

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November 03 2014

Commentary by David Fuller

CSEM White Solar Panels Are Made to Blend into Buildings

Here is the opening of this informative article from Gizmag:

Solar panels are seen as a way of making buildings greener and more sustainable, as well as making them less dependent on the grid for power. The problem is that the blue/black panels stick out like sore thumbs and end up exiled to rooftops. With the goal of making Solar panels aesthetically invisible, the Swiss private, nonprofit technology company CSEM has developed what it bills as the world's first white Solar modules – designed to blend into buildings instead of sitting on the roof.

The reason why most Solar panels look like something off of a beetle’s back is because of the need to absorb visible light. Since nothing absorbs like something colored black, the photovoltaic cells that make up the panel are as dark as possible. That may do the job, but it also means that any Solar panel installation looks like exactly what it is, which doesn’t leave architects with much latitude.

CSEM reasoned that what designers wanted was a panel that would come in different colors and has no visible connections, with white being the most desirable because of its versatility. The way in which the company managed this is with a plastic layer that goes over the panel. This layer acts as a scattering filter that reflects all visible light, yet lets in infrared rays, which allows the panel to generate electricity. CSEM claims that this layer works with any crystalline silicon cell and can be applied to any existing panel whether it’s flat or curved.

The company says that the technology has a number of advantages beside the cosmetic. Being white, the layer keeps the Solar panels at a lower temperature, making them more efficient, as well as reducing air conditioning costs.

CSEM sees the technology as having not only applications in architecture, but in consumer goods such as laptops, phones, and vehicles such as cars and buses, as the layer is adapted to cover a range of colors.

The video below introduces the white Solar panel technology.

David Fuller's view -

Hardly a week goes by without another new, creative breakthrough for Solar power, which is by far the most versatile form of renewable energy.  Yes, they do not work at night and they do not have the capacity to be a standalone solution to our power needs.  However, these Solar panels are likely to be ubiquitous within a few years, available in all shapes, sizes and colours for our buildings, and even our laptops and mobile phones.  Mass production of these panels will lower costs helping to reduce our dependence on the grid for power.

This item continues in the Subscriber’s Area. 

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July 22 2014

Commentary by Eoin Treacy

Global Ripple Effects Of American Energy Independence

Thanks to a subscriber for this highly informative report which ties a number of energy themes together. Here is a section: 

It’s rare for more than one disruptive change to occur, but the unfolding of seven disruptive changes at once is unique to energy market today.

Much attention is rightfully being placed on the shale revolution in the US, which is impacting both sweet and sour crude flows starting in North America, but soon after that, the world.

Not far behind is the deep water revolution, also focused substantially on N. America, but also the Atlantic and Pacific Basins.

Refinery capacity build-out in the Middle East and East Asia are turning global flows on their head.

Russia’s move from a lumpy European supplier of oil and gas to a global supplier is having significant repercussions on the balance between pipeline and seaborne transportation.

China’s preference for pipeline sourcing, is impacting not just Central Asian supply lines, but is reinforcing Russia’s move toward tied pipeline transportation.

New sources of LNG in the US, Canada and Australia are about to have dramatic impacts on the pricing and flows of natural gas globally.

The dramatic drop in Solar pricing, combined with ongoing drive to boost renewable generation, is already impacting coal and natural gas markets, but is posing questions of economic viability for various high-cost LNG projects. 

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

We are living through an incredibly interesting period in the energy markets. The high price environment that has prevailed for much of the last decade has translated into a supply response where new supplies and adoption of alternatives will change the complexion of the market for years to come. 

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June 16 2014

Commentary by Eoin Treacy

Email of the day on European solar ETFs

Hello, I was wondering if you could analyse the Solar power sector, in Europe there are no funds or ETFs to invest in this sector. In the US I found the Guggenheim Solar ETF. I notice that this ETF is very correlated with the heaviest weighted stock, First Solar, so I will probably buy this as being in Europe we are fiscally punished if we buy us ETFs which are not compliant with UCITS regulations. Anyway First Solar seems to have a very interesting chart could you please comment thanks

Eoin Treacy's view -

Thank you for this question and following a search on Bloomberg I did not find a dedicated Solar fund listed in Europe. I’ve reviewed Solar companies on a number of occasions over the last year not least because they were rallying from deeply depressed levels and because the technological advances seen in the sector hold out the potential for a truly game changing innovation in the energy sector globally. Here is a link to the Tag for Solar comments. 

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May 30 2014

Commentary by Eoin Treacy

Blackstone Unit Foreshadows Google Path to Power Company

This article by Ehren Goossens, Mark Chediak and Jim Polson for Bloomberg may be of interest to subscribers. Here is a section: 

Meanwhile, Comcast, the cable giant, is in a pilot project with NRG in Pennsylvania that adds electricity to its cable, phone and Internet packages. AT&T last year entered the home automation and security business in 15 markets; while not yet planning power sales, it has introduced a smart thermostat that puts it solidly in the home energy-management business. It could do what Comcast and Vivint are doing.

Google’s $3.2 billion acquisition of smart-home startup Nest in February “ought to give utility officials a sinking feeling in the pit of their stomachs” since it makes clear the Technarians have begun to seriously eye at least the periphery of utility business if not its core, said Adrian Tuck, CEO of Tendril Networks Inc. a Boulder, Colorado-based energy-services management company.

Google Energy
While coy about its ultimate energy ambitions, Google is already a power generator through more than $1.4 billion in clean energy investments and holds a wholesale power license.

Last month it contributed $100 million to a program to promote rooftop Solar power with SunPower Corp.

Nest, maker of the Learning Thermostat that memorizes and adjusts to users’ preferences, gives Google a leap-ahead presence in the burgeoning smart-home market at the precise time that power in the U.S. has begun to flow both ways with the rise of rooftop Solar and other forms of decentralized, home-grown energy, collectively called distributed generation.

Though Tuck said he has no special insight into Google’s thinking, he believes that its Nest acquisition may well be a “Trojan horse” that gives Google a back door into the utility industry with the ability to leverage its smart thermostats into massive quantities of salable demand response even as it begins to compete directly with utilities with its own green-power projects.

Google spokesman Tim Drinan declined to comment on Tuck’s speculation.
Tuck’s company Tendril is also doing a brisk business in advising regional cable, home-security and home-automation companies how to exploit this opening. He said the utilities he talks to feel constrained by tradition, phobia or regulatory uncertainties from wading in -- a mistake he likens to Eastman Kodak Co. being slow to join the digital camera revolution.


Eoin Treacy's view -

As a society we need cheap abundant energy if we are to generate the type of productivity growth that can fuel a secular bull market. We don’t have it yet but the advent of unconventional oil and gas coupled with technological innovation across a whole host of sectors increases the likelihood that energy price inflation will be much less of a factor in the next decades than it was in the last one. 

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May 02 2014

Commentary by Eoin Treacy

Email of the day on Energy, Bank Capital & Cars

Have you noticed US oil producers are having trouble capitalising on these higher global Oil prices.  We both agree the world needs a cheap energy.  I think it is unlikely that cheap energy source will be conventional or unconventional Oil and Gas.  My concern is that cheap energy solution may take another 10 years to materialise.

I still think European banking looks like Zombie banking.  We know European banks have capital deficiencies.  I think these banks are holding back a broad recovery in the European economy.  My sources continue to tell me European banks are still trying to shrink balance sheets.  I believe the ECB needs to be more proactive in solving this problem.  I see ECB is talking of QE - I am not sure this idea is the solution more likely the problem.   However the bank capital dilemma needs to be addressed quickly otherwise Europe faces a possible Japanese situation of low growth for decades.

Like you I am a strong believer in the big European global business brands and product solutions.  However the availability of credit is stifling growth in Europe's smaller companies and businesses.   From what I observe VW increasingly looks like it is going to dominate the global car industry.  Unless Toyota can catch up in this technology race they will lose their cherished Crown of the dominate global car producer.  As for old world car companies Ford , GM etc. sadly they look like a great short to me.  Every time I hire rental car in the US I come away with the thought how do US car companies do it so badly and remain in business.  I don't expect US cars to handle like my Porsche but US cars are just plain scary to drive.

Please keep up the good service.

Eoin Treacy's view -

Thank you for sharing your perspective on a range of topics. The revolution in unconventional supply of oil and gas can be viewed in terms of a supply response to high prices. At the beginning of the last decade $40 was considered the highest price possible for oil with the result that a great deal of additional supply was simply uneconomic.

Canadian bitumen becomes economic in the region of $40. Generally speaking more established offshore oil fields, such as the North Sea, have a breakeven in the region of $20-$25 while newer offshore such as Brazil’s pre salt ultra-deep water fields comes in closer to $45. A number of the unconventional plays have breakevens closer to the $50-60 area. As a result, we can conclude that price is the determining factor in which sources of potential supply are ultimately moved into production. 

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April 23 2014

Commentary by David Fuller

April 09 2014

Commentary by David Fuller

Email of the day

On Solar power:

“You probably saw this already, being (like me) a fan of the tremendous progress and potential in Solar power. A new cheap energy source is one of the key requirements to drive the expanding Third Industrial Revolution - and it is right on track to power the next secular bull market.”

David Fuller's view -

Many thanks for this informed email and an exceptionally good article.  Actually, while Eoin and I read as much as we can, we see only a fraction of what is potentially informative for the Collective.  Therefore we really appreciate these contributions from subscribers, contributed in the spirit or Empowerment Through Knowledge.

The report is posted in the Subscriber’s Area.

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March 07 2014

Commentary by Eoin Treacy

Zombies Spreading Shows Chaori Default Just Start: China Credit

This article from Bloomberg News may be of interest to subscribers. Here is a section: 

Total debt of publicly traded non-financial companies in China and Hong Kong has surged to $1.98 trillion from $607 billion at the end of 2007. Some 63 companies have a debt-to- equity ratio exceeding 400 percent, compared to the average of 73 percent. In latest filings, 351 have negative ratios of earnings before interest, taxes, depreciation and amortization to interest expenses, while 409 have coverage of less than 1.

Renewable energy, materials, household appliances and software companies dominate the rankings.

Premier Li Keqiang is trying to balance efforts to avoid sharper slowdowns in economic growth with steps to rein in debt.

Expansion in gross domestic product is set to cool to a more than two-decade low of 7.5 percent this year from 7.7 percent in 2013, according to the median estimate in a Bloomberg survey.


Eoin Treacy's view -

$630 billion in Chinese corporate debt will need to be paid off or refinanced this year and we have just seen the first onshore default. It is a reasonable expectation that more will follow. Until now, investment vehicles have been supported by government largesse and investors have been made whole in the event of trouble. That is simply unsustainable, not least because the debt market is now so large that to continue on that trajectory would eventually bankrupt the country. 

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February 25 2014

Commentary by David Fuller

Email of the day 2

On developments in Solar power:

“Hello David, it's me again. The article below on Solar power appeared in today's City A.M. paper (London). The author draws a graphic analogy of panels installed to date with the Ford Model-T which was produced from 1908-1927. Look at the sophistication, reliability and affordability of modern cars by comparison and we get some idea of how amazing Solar power is likely to become in coming decades. It will transform the world, in my humble opinion.”

Ed: Here is a section:

First, grid parity – when electricity generation is competitive with grid-electricity rates without subsidies – is edging closer. In 2012, Bloomberg reported that Germany, Denmark, Italy, Spain, Portugal, Australia, and Brazil could already expect to achieve at least a 6 per cent return on PV investments. Many of these countries still offer indirect subsidies, so the market isn’t competitive quite yet. But the direction is clear. The average US PV market will likely reach proper grid parity around 2020, and states like California should reach that point sooner. Within a few years, arguments about feed-in tariffs will become irrelevant in many countries, because the Solar industry won’t need subsidies.

Second, large companies are flocking to Solar. Thanks in part to cheap PV modules, non-energy businesses are becoming mini power generators. The retail giant Walmart already has a Solar-energy capacity of almost 90 megawatts (MW) in the US. If the retailer installed panels on every US store, it could generate 1.5 to 2 gigawatts – or about twice the output of my local nuclear power station. If other big-box retailers follow – and many are already doing so – we could see collective generation capacity skyrocket, making Solar increasingly viable as part of the energy mix.

Its potential goes beyond retail. Solar is well-suited to industrial and processing applications: in Saudi Arabia, the Al-Khafji Solar-powered seawater desalination plant is set to produce 30,000 cubic metres of salt-free water per day. And entrepreneurs are honing new applications. The US startup WaterFX, for example, is developing Solar “troughs” that remove salt from water by distillation to deal with drought.

But these innovations are only possible because Solar technology is developing rapidly. Today’s domestic PV modules are the Ford Model-Ts of Solar: cheap, mass-produced, commercial pioneers. But they are poor at converting sunlight into electricity (efficiencies of around 10 to 15 per cent are common). These figures, however, could easily double.

Scientists from the California Institute of Technology and partners are developing a new multi-junction cell with a target efficiency of over 50 per cent. Building-integrated PV – glazing that generates power – could further popularise Solar power. And PV is not the only form of Solar energy. Improvements in other approaches, such as concentrated Solar power (CSP), are possible. CSP uses mirrors to concentrate a large amount of sunlight onto a small area, driving a turbine. Just look at Spain’s 50MW Solnova Solar power station.

David Fuller's view -

Many thanks for the article, as informative emails are most welcome, not least in the field of technology.  Solar farms can be understandably contentious if they are anywhere near recreational areas and sights of natural beauty, although they are considerably less menacing than noisy windmills. 

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January 02 2014

Commentary by Eoin Treacy

Solar companies

Eoin Treacy's view -

Solar and wind shares were among the big winners in 2013 as they recovered from what amounted to brushes with bankruptcy for a number of the weaker companies. The rationalisation of global capacity, lower prices for Solar cells on a per unit of electricity basis and recovering demand all helped to fuel investor interest. 



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