Daniel Englander
Our weekly, continent-spanning list of greentech events. If you have an event to list for next week, e-mail me at englander at greentechmedia dot com. Also, a friendly reminder to register for Greentech Media’s PV Annual 2008 on May 28 in Boston.
May 12
- SF Green, 5:00 p.m. - 2:00 a.m. @ 111 Minna Gallary, San Francisco, CA
- Capturing Solar Energy for Transportation Fuel, 5:30 p.m. - 7:00 p.m. @ 2015 Addison St., Berkeley, CA
- MIT Energy Club End of the Year BBQ, 6:00 p.m. - 8:00 p.m. @ MIT Sailing Pavilion, Cambridge, MA
- 14th Annual Alternative Fuels & Vehicles Conference + Expo 2008, Rio All-Suite Hotel, Las Vegas, NV
- National Green Building Conference, Sheraton New Orleans, New Orleans, LA
May 13
- Enhancing and Commercializing Sustainable Products, 8:30 a.m. - 11:00 a.m. @ Las Americas Conference Center, 55 Exchange Pl., 5th Floor, New York, NY
- Energy Technology Innovation Policy Seminar Series - “Emerging Energy Technologies for Climate Change Mitigation: Comparative State-level Media Analysis,” 9:30 a.m. - 11:00 a.m. @ Belfer Center Library, L-369, Kennedy School of Government, Harvard University, Cambridge, MA
- Third Party PV Installer Workshop, 9:00 a.m. -12:00 p.m. @ WilmerHale, 60 State. St., 26th Floor, Boston, MA
- MIT Clean Energy Entrepreneurship Prize Finals, 3:00 p.m. - 9:00 p.m. @ LeMeridien, 20 Sidney St., Cambridge, MA
- 14th Annual Alternative Fuels & Vehicles Conference + Expo 2008, Rio All-Suite Hotel, Las Vegas, NV
- National Green Building Conference, Sheraton New Orleans, New Orleans, LA
May 14
May 15
May 16
Michael Kanellos
The world could see an unprecedented spike in oil prices toward $200 a barrel that could plunge the world into a panic.
Or it might drop to $90 a barrel after a new president is inaugurated in 2009 as the Saudis try to cozy up to a new U.S. president.
Arjun Murti of Goldman Sachs put out a recent report, according to the Telegraph, that demand from China and lackluster growth in supply will push oil near the $200 mark over the coming months.
“We believe the current energy crisis may be coming to a head. A super-spike end game may be in the early stages of playing out,” Murti wrote, according to the paper.
But wait! Edward Morse over at Lehman Brothers in a report speculated that Saudi Arabia may boost output by 1.3 million barrels a day next year, more than the growth in demand. This could push prices toward $90 a barrel, according to the report, as reported by Forbes. The Saudis recently said that three new fields have entered production. And the country has used oil for diplomatic overtures before. A weakened correlation between the dollar and oil prices may also help push prices down.
Lehman, however, admits it predicted oil would drop to $90 a barrel this quarter in an earlier report. It sells for around $122 to $126 a barrel. Hurricane season could also hurt a drop in prices.
I also had my cat, Fraulein Katze, walk across my keyboard. She came up with $132 a barrel. (disclosure: Frost and Sullivan sometimes employs her as a consultant.).
News like this really must be tough on survivalists. I mean, do you stock up on more canned foods and ammo, beating the surge in demand that’s going to occur, or do you unload all that powdered milk you have stored in that cave near McGill, Nevada and buy more armor for the Hummer?
No matter who you believe, however, it does point to an essential truth in the oil business. It is wildly unpredictable. I recall once attending an oil technology conference in Qatar in 2005. Oil had just come down from $70 a barrel to the mid-50s range. Despite the drop, companies were enjoying a surge in profits. So you’d expect everyone to be excited.
Not so. Most of the speakers went out of their way to remind the audience that boom times only last for brief periods.
Daniel Englander
The IPO market for greentech companies has always been a little spotty. Between 2005 and 2007, only five greentech companies listed on the NASDAQ, “raising an average of $77 million each and reaching average post-IPO valuations of $245 million.” First Solar, which raised $400 million in its 2006 IPO, has so far been the great success story in greentech exits. With American VCs literally killing each other to fund greentech companies, investing $3.43 billion in the first three quarters of 2007 - up roughly 50 percent in 2006, the nagging question of how far the tide can rise before it lifts all the boats remains. How will VCs, who typically expect a 10x return over a five to seven year investment horizon, squeeze $34.3 billion out of a relatively tight exit market? Will there be a killer amp? Will there be a greentech Google?
The answer is a little murkier that many have expected. A primary difference between greentech and, say, the web or telecom, is that with greentech we’ve got a defined endpoint: to disrupt and revolutionize the global energy infrastructure. Simple, huh? The company or companies or sector that wins out and becomes the Next Big Thing will need to build products that are easily integrated and accessible, satisfy demand in a major market, and can get by without requiring a vast restructuring of policy-backed incentives, subsidies, or consumer habits. In short, the Next Big Thing might not be what we need. Instead, we may need to look for The Silent Killer.
Who among you aspires to rise to the level of heart disease, radon, or cooties? The hope is that all of the big deals announced in the recent past, including Heliovolt’s $101 million, Project Better Place’s $230 million, and the $250 million+ raised by perennial favorite Bloom Energy over the past years, will come to fruition this year. Surely IPOs from any of these companies will generate investor interest, big returns, and more than a few new Ferraris in the Valley. In fact, the NVCA and PricewaterhouseCooper have gone out on a limb, naming 2008 the year “cleantech comes of age.”
But do these companies satisfy all of our Silent Killer criteria? Not quite. (…)
Daniel Englander
When José Ignacio Sánchez Galán woke up yesterday morning, he looked in the mirror, saw what he had to put on, and then he went to the gym and put it on. With the bid deadline looming, Galán’s Iberdrola is reportedly putting the final touches on its proposal to acquire 35 percent of British Energy. And it looks like it’s moving in alone. Despite reports that Iberdrola would partner with Centrica, the owner of British Gas, to take on French nuclear giant EDF, late breaking news this morning has Centrica jumping ship. The UK utility has reportedly signed on to a joint bid with EDF as a junior partner in a 75/25 joint venture. This surprise doesn’t necessarily leave Iberdrola in the lurch. Though the company had said it wouldn’t consider an independent bid as late three days ago, it may have seen the writing on the regulatory wall and imagined an opening for itself on the Continent. EU lawmakers voted on May 7 to push ahead with unbundling regulations, which will lead to a break up of transmission and generation capacity throughout Europe.
Unfortunately, some of our lawmakers in the Senate appear not to have been inspired by Galán’s intestinal fortitude. The Lieberman-Warner climate bill, a mildly lame attempt to regulate emissions is becoming lamer, and may eventually pass into obscurity. As Sen. Barbara Boxer (D-CA) struggles to wrangle up the 60 votes she and her supporters need to move the bill through the Senate, many worry that the climate bill will become watered down, limiting severely its already limited effect. A proposal meant to appease moderates currently on the table would allow the president to, in the words of John Warner (R-VA), “pull back the throttle” if emissions targets weren’t getting met by current technology or if consumer prices increased sharply. Kind of like now.
Perhaps because we were a little bit jealous of ethanol’s very special episode, Greentech Media has decided to have one of its very own. Today we learn about the importance of community and openness as we welcome aboard Mike Kanellos - pro blogger, technologist extraordinaire, media guru, and greentech analyst to the stars. Mike joined us on Monday after a 12 year stint at CNET and has been blogging on Green Light for the past few days - his are the posts without typos. We’re happy Mike’s here and are sure you’ll be too.
Michael Kanellos
I watch PowerPoint presentations so you don’t have to. Here are some numerical gems from the solar sessions at the CLEO QELS conference, a diode/laser academic shindig that took place this week in San Jose. (The letters stand for Conference on Lasers and Electro-Optics Quantum Electronics and Laser Science, but you probably knew that.)
18: That’s the number of proposals floating in California right now to build 100 megawatt power plants with solar panels, according to Hal LaFlash, director of emerging clean technology policy at Pacific Gas & Electric. There are over ten proposals for erecting 100 megawatt to 500 megawatt plants, he added.
To date, large solar power plants like this have been the purview of solar thermal companies. (The largest existing PV plants, like the ones owned by Sharp, Applied Materials and Google, generate between 5 and 1.5 megawatts.) Solar thermal plants, however, only work well in desert areas. Photovoltaic plants can be erected in a wider variety of environments. OptiSolar, for instance, hopes to build a 550-megawatt facility with PV panels in San Luis Obispo County, north of Los Angeles and not nearly as sunny as the Mojave.
87.1 megawatts: the amount of solar panels, in terms of potential power generation, in California. Approximately 21,000 PG&E customers have solar panels while 1,000 commercial customers do.
60 percent: that’s, roughly, the percentage of people working on solar projects that attended a recent meeting held by PG&E for companies bidding on alternative energy projects for the utility. Five years ago, solar represented only a fraction of the attendees.
$1.44: That’s the estimated cost per watt for silicon photovoltaic panels in 2013, according to LaFlash. In 2000, it was at $3.89. In 2010, it is supposed to hit $1.89.
3.25 Euros: that’s the price of putting in cadmium telluride solar panels from First Solar, according to Benny Buller, director of device improvement from First Solar, the cadmium telluride kings. Installation is about half of the cost of a solar panel system. In terms of U.S. dollars (the new lira) that’s $5 a watt.
$1.12 per watt: the amount First Solar was making panels for during the fourth quarter not including installation. Thus, the company is a bit ahead of the general curve.
19 percent: the amount silicon solar panels decline in price with each doubling of manufacturing capacity.
Michael Kanellos
Not all solar IPOs are created equal.
Real Goods Solar, a solar installer that says it erected the first residential solar panel in the U.S. in 1978, started trading in a public offering at $10 a share today. The stock, however, is hovering around the $9 level at the moment. It has traded mostly between $8.25 and $9.25 so far. It’s not the end of the world. Dell geared up for its IPO amid the 1987 stock meltdown. Nonetheless, it’s not the best news in the world. The $10 offering price was at the low end of the pre-IPO $10 to $12 offering price range.
Solar installation is, according to some, the next hot frontier in solar. Installation takes up about half of the cost of a residential solar system, but it’s still relatively antiquated. Basically, guys with tool belts clamber up onto your roof, do a lot of measuring and cutting, and then hand you a bill for several thousand dollars. (There’s your answer when some dolt says “Why can’t the solar industry grow like Facebook or Google?”). Most of the research in the solar panel universe has been spend on improving the efficiency of solar cells.
In recent years, however, SolarCity, Standard Renewable Energy and others have come up with ways to reduce some of those onerous install costs. SolarCity organizes installations to reduce time in the field truck runs. Sungevity, a newcomer to the field, has developed software that can give a customer a solar system estimate over the Internet, a process that most companies can only accomplish with a visit to the home. Real Goods’ main selling point is that it has done a lot of installations—more than 2,400—and can use this experience to expand rapidly. The company is part of the Gaiam lifestyle group, which also sells yoga tapes. Some may scoff, but lifestyle products are expected to grow too.
Still, installation is essentially a branch of contracting and thus margins are tight. The queasiness surrounding the solar tax credits doesn’t help either. Not counting two acquisitions, Real Goods pulled in $16.8 million in revenue in fiscal 2007 and $102,000 in net profit. Including the acquisitions of Marin Solar and Carlson Solar, Real Goods had revenue of $32.7 million and net income of $491,000, according to the S-1 filed with the SEC.
Real Goods hopes to expand beyond its traditional base in California and Colorado into Arizona, Nevada and other states rolling out solar incentives.
