The Future of Green Tech Investment

green technology investmentAccording to a recent article in Green Technica by author Joshua S. Hill, green tech investment could “skyrocket” by 2030. Hill cites research from Bloomberg New Energy Finance, including a detailed analysis of three different potential scenarios. As their research shows, wind and solar could have the efficiency and popularity needed to bring the renewable energy industry into its own.

Although clean energy ETFs have been underperforming in an era where fossil fuels have largely recovered from recession-era prices, each of the three scenarios explored by Bloomberg New Energy Finance shows an increase in green technology investing. A 230% increase in annual investment by 2030 would mean increasing to a total of $630 billion per year. Bloomberg New Energy Finance largely attributes this to the decreasing cost of wind and solar technologies, as compared to fossil fuel alternatives. The report also shows increased use of hydro power, geothermal and biomass.

Michael Liebreich, Bloomberg New Energy Finance’s chief executive, believes that we have already passed the “tipping point” for clean energy technology. He points out that, even though most news coverage is discussing the future of fossil fuels, costs for green energy and implementation are falling. He says, “The news right now is dominated by stories of pain caused by overcapacity on the supply side of clean energy, and the lure of cheap shale gas, but this is playing out against the falling costs of renewable energy and of all the technologies required to integrate it into our energy system, and falling costs win. What it suggests is that we are beyond the tipping point towards a cleaner energy future.”

The three scenarios explored by Bloomberg New Energy Finance are “New Normal”, “Barrier Busting” and “Traditional Territory”. “New Normal” is cited as the most likely, and ends with a probable $630 billion per year in green tech investing. Each scenario calls for growth in the renewable energy sector, notably in solar and wind energy, along with decreases in fossil fuels. Even the modest “Traditional Territory” scenario shows green tech investment increasing to $470 billion by 2030.

Guy Turner, the head of economics and commodities for Bloomberg New Energy Finance, says that renewable technologies will be the “anchor of new generating capacity additions” in all scenarios. He points out, “The main driver for future growth of the renewable sector over this timeframe is a shift from policy support to falling costs and natural demand.” Read the original article.

When we last looked at solar energy in particular, we noted that 2013 is a slower year for installations due to an oversupply of solar panels. However, by bringing this technology to end-users more quickly and at lowered prices, we explored the idea that solar energy may be closer to being at parity with fossil fuel based energy. Also helping the situation is a budgeted increase in spending for the Department of Energy, including a 75 percent increase in spending on advanced vehicles to $575 million, and a 29 percent increase in spending on the ongoing effort to integrate solar and wind power into the national electric grid.

1603 Babies: Another Year of Life

The so-called “lame duck” Congress has gotten itself into a productive fit over the last couple of weeks, and passed more important legislation than it had done all year long — much of it bipartisan.  In many ways nothing was more surprising than the action that preserved the “1603 Program” this morning.  Widely reported today, the 1603 Program (so-called because it was created as section 1603 of the American Recovery and Reinvestment Act of 2009 — or ARRA) will be extended by a year, allowing the clean and renewable energy industries to continue to be boosted by a 30% subsidy for qualifying projects.   Proponents of the program claim that it has been responsible for the creation of 100,000 jobs.  Here is a take on the news by Pete Danko of EarthTechling: http://www.earthtechling.com/2010/12/clean-energy-grants-get-another-year/.

Fellsmere FL large-scale Petroalgae R&D facility for algae-based fuels

The Treasury had doled out nearly half a billion dollars this year to solar projects alone: http://www.solarindustrymag.com/e107_plugins/content/content_lt.php?content.6920, and the support was very widespread, with 42 out of 50 states getting at least one grant.  Here is a brief summary from WilmerHale of the provisions of the program and related programs: http://www.wilmerhale.com/publications/whPubsDetail.aspx?publication=9682.

What does this mean for the renewables industry?  According to the American Wind Energy Association, the 1603 Program enabled the construction of 10,000 MW of new wind capacity in 2009, along with 10,000 construction jobs and 2,000 permanent jobs.  The solar industry grew by more than a third in 2009 and may grow by more than 50% in 2010 when the numbers are tallied: http://leadenergy.org/2010/12/the-importance-of-extending-the-1603-treasury-grant-program/.

What does that mean to investors?  Well, to begin with, many of the renewable-energy companies had seen their valuations whacked over the last several weeks as doubt mounted about whether 1603 would be extended.  So there may be some bounce-back profits to be made simply from that.  Look at the giants like First Solar (Nasdaq: FSLR; http://www.firstsolar.com/), whose shares have moved up nearly 10% over the last 2 weeks.  But since the trickle-down effect may not be either as fast or as efficient for the smaller companies and the supply chains, you may have more time to take a position.

Biomass

Biomass companies are definitely included in 1603 — and that includes companies that grow their own biomass (jatropha, algae) as well as companies that use decomposing waste to create fuels.  An article from Popular Mechanics talked about 5 of them: http://www.popularmechanics.com/science/energy/biofuel/4333722.  One of those is South San Francisco-based Solazyme (http://www.solazyme.com/company-profile), but the choice is not wide if you are looking for companies that trade on the stock markets.  The largest is Melbourne, FL-based Petroalgae Inc (EBB: PALG; http://www.petroalgae.com/), with a market cap of over $1.1 billion. 

Solar

 

Solar concentrator looking like a ferris wheel

There are as many solar companies as Arabian Nights in the story book, it seems, divided into those that make the gear (photovoltaic cells, thin film, solar concentrating devices, a myriad of different parts and pieces); those that install the gear, and those that generate electric power from the installations.  There seem to be many claimants for the title “Largest Solar Installation in the World,” but one of the most recent is due to be installed in the eastern Mojave desert near the California city of Blythe: http://www.renewable-energy-news.info/worlds-largest-solar-installation-blythe-ca/.  About 2 months earlier, First Solar announced its own “world’s biggest”: http://solarhbj.com/news/worlds-largest-solar-pv-power-plant-now-operating-in-ontario-canada-0989.  But the “dream team” solar project still has to be the electrification of the Sahara desert, even though it has no hope for 1603 funds: http://inhabitat.com/worlds-largest-solar-project-sahara-desert/

 
 
 
 
 

And pretty-made turbines all in a row (at sea)

Wind

Perhaps the most controversial renewable is one of the oldest: harnessing the wind.  When I was a kid I was taught that waterwheels and windmills were some of civilized man’s first non-combustible attempts to harness natural energy.  But as the applications have gotten bigger, the windmills and waterwheels have become gigantic — and some folks don’t like them one little bit.  The highest-profile new projects tend to be offshore these days, like the huge project planned for the area around Nantucket Island, described here: http://www.capewind.org/.  Wind farms are probably no larger than solar farms, but they stick up really high, and they create what some people see as visual pollution — “that big white thing with the rotating arms is ruining my view.”  Most of the big vendors are BIG, but there are a few smaller makers who might be good places to place a bet.  One is Irvine CA-based Composite Technology Corp (EBB: CPTC; http://www.compositetechcorp.com), founded in 1980, and with a market cap of about $66 million.  CPTC makes wind turbines for the electric utility industry, and so stands to be a fairly direct beneficiary of 1603.   Or there’s Hamburg-based REpower Systems AG (DAX: RPW; http://www.repower.de/), which just last week announced 51 additional MW for the US to be installed in PA, NY, OH and WA.  RPW is a much larger company, with a market cap in the range of 1.1 billion euros, and in the US there is an ADR, RPWSF.PK.

Hydro

Hydroelectric dam (best not to mention fish around them)

If there’s anything more picturesque than an old windmill (think Mykonos), it’s an old waterwheel, and if there’s anything more gargantuan than a big wind farm, it is the modern descendent of the waterwheel, a huge hydroelectric dam.  But if there is anything that is renewable it is mountain streams and the rivers they power, and from the time that Buffalo was electrified by Niagara Falls, the attempt to harness every fast-flowing river has been universal.  And when there are no fast-flowing rivers, we create artificial lakes to run the turbines.  Most big dams are owned or operated by utilities or groups of utilities, and many small dams are under the authority of the Army Corps of Engineers, with a popular estimate that there are 20,000 small dams in the US alone that do not yet generate any electric power. Thus the growing demand for what is called “small hydro” — miniturbines that can generate smaller amounts of electricity but that can also be installed with a minimum of environmental impact and capital expenditure: http://en.wikipedia.org/wiki/Small_hydro.  Earlier this year Russell Ray had a look at the regulatory and funding environment for small hydro: http://www.renewableenergyworld.com/rea/news/article/2010/04/regulating-small-hydro

It’s not easy to find a small hydro smallcap stock, because most of the hydroelectric stocks are big companies like Idacorp (NYSE: IDA) or AECOM Technology Corp (NYSE:ACM).  Smaller utilities in the northeast and northwest can be good places to look, and some very small nonpublic technology companies like Hydroring, a privately held Dutch company with an innovative “fish friendly” small turbine for riverine applications.  Very little data is available on Hydroring, based in The Hague, but there is a website at http://hydroring.nl/.

Storage: the 800-pound gorilla

One of the conundrums of renewables is that although they smile a lot, utilities frequently are not well-disposed toward renewables.  They present a lot of technological and cost problems.  They are frequently remote from the grid and very costly to build long lines to.  Talk to most utilities and you will quickly believe that the key to renewables is a way to store the energy generated until it is needed.  And that means batteries.  Some lithium-ion companies have major smart-grid initiatives underway, but they represent a super-expensive way to store wind-turbine energy.  Regular old lead-acid batteries are a heck of a lot cheaper, but they don’t charge up and charge down fast enough, and they wear out very quickly.  As with other areas of potential 1603 beneficiaries, there are a lot of energy storage companies, so you might look at NYC-based Ener1 Inc (Nasdaq: HEV; http://www.ener1.com/)  , which has a lot of Russian and Japanese lithium-ion technology know-how.  Another option would be Tyngsboro MA-based Beacon Power (Nasdaq: BCON; http://www.beaconpower.com/), which has a flywheel technology.  And the low-cost leader looks to be New Castle PA-based Axion Power International* (EBB: AXPW; http://www.axionpower.com), a company with a battery that is a relative of the lead-acid battery in your car, but turbocharged with nanocarbon to eliminate corrosion and increase the ability to charge/recharge.  It is worth saying that none of the 3 companies has been a mass manufacturer of their products to date, so all require due diligence with regard to their ability to scale up and serve the market.

*client of Allen & Caron, publisher of this blog.

Offshore Wind Energy Projects Generating a Buzz

Wind energy and its potential to power a large swath of the East Coast has generated a surge of news activity in recent weeks. First, in late September, conservation advocacy group Oceana released a study suggesting that offshore wind over the Atlantic Ocean could indeed power much of the East Coast and at the same time be much friendlier to the environment than other energy alternatives including natural gas, coal, oil or nuclear energy. The Oceana study (http://na.oceana.org/en/our-work/climate-energy/clean-energy/offshore-wind-report/report) came on the heels of a U.S. Department of Energy draft plan for creating a offshore wind energy program for the U.S.

Wind Turbines, photo courtesy of Western Wind Energy

Those studies were followed by a blockbuster New York Times piece on October 12 (http://www.nytimes.com/2010/10/12/science/earth/12wind.html?_r=1&scp=1&sq=matthew%20wald&st=cse) reporting that Google and two other companies, one a New York financial firm, have agreed to invest millions of dollars in a 350-mile underwater transmission “spine” cable along the Atlantic coast that would transfer the energy created by offshore wind turbines to what the Wall Street Journal estimated to be 1.9 million households along the East Coast from Virginia to New Jersey. Along with Google, the investment firm Good Energies and Marubeni, a Japanese trading company, have all agreed to invest in what is called the Atlantic Wind Connection.

As now envisioned, the five-phase project would begin in 2013, be completed in 2020 and be constructed 15 to 20 miles offshore, thereby eliminating much of the criticism of visual blight from the turbines that has plagued other high-profile wind turbine projects such as the country’s first offshore wind project called Cape Wind off Cape Cod.  The cable would have a 6,000 megawatt capacity, which The Times says is equal to the output of five large nuclear reactors.

Most experts agree that an offshore transmission line would spur the construction of various offshore wind farms since developers would not need to create their own individual transmission lines, according to the Journal story.

This has to be good news for the burgeoning smallcap companies involved in wind farms and turbines, but just who might capitalize is hard to say at this point. Here is a short list of some of those smallcaps:

Fergus Falls, MN-based Otter Tail Corporation (Nasdaq: OTTR, http://www.ottertail.com) is involved in wind energy transmission but is now focused soley on Minnesota and the Dakotas. The stock price ($21.27 this week) has rallied with the rest of the market since September but is still off its 52-week high of $52.39 set last January. Since wind energy is a small part of its business and its base is in the heartland, not the coast, this could be a stretch.

Vancouver-based Western Wind Energy (CDNX: WND.V, http://www.westernwindenergy.com) is also based far west of the Atlantic. It’s currently trading for about $1.20 but since it doesn’t trade on a U.S. exchange there is little news on progress. The last headline noted that the company had closed a $2 million corporate loan but otherwise there is not much to go on.

London-based Clipper Windpower (OTC: CRPWF.PK, http://www.clipperwind.com) is a pure wind energy play but is another small stock with very little trading. It seems to be sitting at about $0.78 with no recent activity. While it’s based overseas, it does have operations in the Americas.

Geothermal Companies Getting Hotter: Carbon-free is the New Black

Geothermal energy is like a crazy genie who is sometimes helpful and sometimes a weapon of mass destruction.  The natural escape valves of subterranean nature are volcanoes, geysers and bubbling hotsprings, not to mention the massive energy stored in tectonic plates butting into one another, which causes earthquakes.  As a source of useful energy, it has been slow to be harnessed in a big way other than by locals — Iceland, for instance, is powered almost entirely by renewable hydro and geothermal energy.  This article encapsulates the most common ways of using geothermal energy, and is descriptive of the Icelandic exemplar: http://www.energy.rochester.edu/is/reyk/works.htm.  Note the generation of hydrogen, a clean-burning fuel whose only emission is water. 

But in these days when renewable energy is approaching Holy Grail status (for good reason), geothermal companies merit a good look-see.  See this virtually evangelical message from the very persuasive Jigar Shah regarding carbon emissions: http://news.carbonwarroom.com/2010/10/04/creating-wealth-by-reducing-carbon/.  There is a useful survey of geothermal generating companies in this article by Tom Konrad in Seeking Alpha: http://seekingalpha.com/article/229522-8-geothermal-stocks-for-your-consideration.  As he points out, the clear leader as a pure-play geothermal company is Reno-based Ormat Technologies Inc (NYSE: ORA, http://www.ormat.com/), which, at $1.35 billion market cap, is a bit large for this blog — but worth looking at for its relatively complete picture of geothermal potential.

In the United States, federal government incentives can be a powerful impetus toward “clean” renewable energy (keeping in mind that almost every industrial process, no matter how “clean” generates some detritus that can present problems at some point).  As with most such incentives, the big bucks are frequently sucked up by big companies that in some ways don’t need them, but on the other hand may be more likely to create jobs, an unmitigated political good. 

One company to look at is Boise ID-based US Geothermal (NYSE Amex: HTM; http://www.usgeothermal.com/).  Like a lot of semi-development-stage companies, it is pretty short on revenue, long on cash consumption, with revenue of less than $1 million in its latest (June 30) quarter, and a cash balance that dropped from $13 million to $8.7 million in 90 days while the P&L only showed a loss of $1.5 million.  Its projects are all in the Idaho-Oregon-Nevada area, over the hotspots they need to produce their electricity.  Numerous analysts in Canada and the US cover HTM, a list of them being available on the HTM website.  HTM shares are at about half their 52-week high, selling for $0.84 vs the high of $1.74 on average volume of 200,000+ shares per day.  Market cap is about $66 million.

Provo UT-based Raser Technologies (NYSE: RZ; http://www.rasertech.com/)  is not a pure play in geothermal energy, but close enough.  It qualifies on price action as a “fallen angel,” having sold for as much as the mid-teens a couple of years ago (you could hear the champagne corks popping), but today it is a pennystock, trading at about two bits ($0.25) vs a 52-week high of $1.69.  The low price seems to indicate a skepticism on the part of investors about RZ’s ability to achieve power production goals, and a conservative position about what looks like fairly sizeable financing needs in the short and medium terms.  Revenue is moving up (looks like an annual rate of $4.5 million, mas o menos), but the losses are staggeringly large compared to current revenue size, and much of the “game” here is dependent on government grants — which, to give credit where credit is due, RZ has been good at so far.

There are other geothermal plays, several of them mentioned by Tom Konrad in his Seeking Alpha article referenced above: Magma Energy (OTC: MGMXF.PK); Nevada Geothermal Power (OTC: NGLPF); and Ram Power Corp (OTC: RAMPF.PK).

But no serious discussion of renewable energy makes total sense without a discussion of how to USE the energy that is produced.  The part of most renewables is that they are time-and-space-restricted, and geothermal is more so than most.  Geothermal energy can only be generated when there is access to the hot core of the earth, or to the hot water/steam that is generated by the heat of the core.  That’s a relatively uncommon situation: being able to tap into the earth’s molten core.  In most cases the geothermal fields are pretty far out in the middle of BFE, as this picture of US Geothermal’s San Emidio plant aptly demonstrates: 

The practical side of that is that in order to USE the energy that is generated, there are 3 options (and possibly only 3): (1) build power lines to the site, with the cap-ex and ongoing maintenance that implies; (2) convert the power into a power substitute, such as hydrogen, so that it can be transported to a place where it can be used; or (3) store the energy in a battery or by other means, such as a flywheel contraption or as compressed air (which could drive a turbine when released).

It seems sensible at this point in time to just eliminate expensive energy storage technologies, because even with stimulus money, nobody is in a mood to light cigars with $100 bills these days.  That means there are principally 2 or 3 small-cap companies to look at for energy storage.  There is a useful survey of such companies in this article by Swiss expatriate John Petersen, also from Seeking Alpha: http://seekingalpha.com/article/229197-battery-technologies-no-secret-sauce.

Of the companies mentioned by Petersen, there are two that are worth a deeper look: New Castle PA-based Axion Power* (OTC: AXPW; http://www.axionpower.com) and Tyngsboro MA-based Beacon Power (Nasdaq: BCON; http://www.beaconpower.com/).  The similarities and contrasts between the two are worth noting.  In the first  place, AXPW is a battery company with a singular technology that no one else can pursue (PbC batteries) and BCON is a flywheel company with lots of IP.  Their market caps are very similar (today BCON is $63 million and AXPW is $60 million).  Both are lightly traded.  Both companies are the only “pure plays” in their technology niches.  Both companies tend to be treated as footnotes to the lithium-ion industry, which has taken off like a striped-assed ape while AXPW works on a singularly thorny manufacturing issue and BCON labors for acceptance of an old-but-new physics approach to energy storage.  Both companies have had issues with federal support — in AXPW’s case the grant money was given to their partner, Exide Technologies instead of being split with AXPW.  In BCON’s case, the feds, having underwritten earlier BCON work, elected to back out for a second round (http://phx.corporate-ir.net/phoenix.zhtml?c=123367&p=irol-newsArticle&ID=1480786&highlight=). 

Nonetheless, both technologies are potential winners, though both look like dark horses at the moment.  Petersen has some sensible things to say about both companies, as well as numerous other energy storage companies. 

Nothing’s ever as easy as it looks.  You look at Old Faithful and you think, well, that would be relatively easy to harness and make it turn a turbine wheel.  But it just ain’t that simple.

*client of Allen & Caron, publisher of this blog

EVs and HEVs: Mushy Veggies or the Hope for the Future?

“Like mothers who push healthy food at skeptical children, carmakers insisted that despite the mushy-veggies taste of smaller engines and hybrid everything, Americans will learn to love gas sippers and drive them without shame.” (from coverage of the New York Intl Auto Show by the NY TIMES: http://www.nytimes.com/2010/04/04/automobiles/autoshow/04SHOW.html?hpw)

Now while it’s clear that automobile writers may be wondering where the muscle cars went (and choosing to write about ever-clunkier-looking crossovers and sport utility vehicles),  it turns out the first mass-market pure EV is hitting the showrooms in Japan, and auto buyers are taking to it like the proverbial duck to water: http://finance.yahoo.com/news/Japanese-start-buying-apf-3281658505.html?x=0&sec=topStories&pos=1&asset=&ccode=.  It’s a 4-seater from Mitsubishi called the i-MiEV and it costs about $30,000 after tax and other incentives.  The car is rated for 100 miles between charges, and can be charged in as little as 30 minutes at a turbo-charged charging station (no, there are not very many of them).  See this article from AutoBlogGreen: http://green.autoblog.com/2010/04/02/mitsubishi-aims-for-sub-30-000-price-tag-on-u-s-i-miev/

i-MiEV from Mitsubishi, Japan's first mass-market EV

At the same time, Nissan announced that its new EV, the Leaf, will be in showrooms by December, and they have started taking orders.

We’re anxiously awaiting the Tesla IPO announced earlier this year (http://earth2tech.com/2010/01/29/tesla-ipo-electric-car-startup-files-for-100m-public-offering-finally/), and that offering, when it happens, may herald the first true US EV “muscle car” public company.

For the smallcap investor, there are ways to invest in the EV as a passenger-car trend, both by investing in cross-border companies and by investing in companies that make parts and pieces of EVs.  One hint at the broad influence that EVs will have if they are widely accepted (and we assume they will be) is written between the lines in an announcement by Ford and Microsoft, and released on the first day of April.  It deals with a cooperative agreement between the two companies as to a program called Hohm (a combination of the place you live and a measure of electrical energy), which may help EV owners calculate the cheapest and most efficient ways to re-charge their cars, considering that charging a car is likely to double the energy usage of some homes. http://www.greencarcongress.com/2010/04/hohm-20100401.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+greencarcongress%2FTrBK+%28Green+Car+Congress%29

Also mentioned in that announcement are Ford’s plans to introduce 5 new electric vehicles over the next few years, the first of which is the electric Transit Connect, which was shown at the Chicago Auto Show earlier this year, and which will start being delivered in the 4th quarter of 2010.  The Transit Connect is a co-product of Ford and Oak Park MI-based Azure Dynamics Corp* (TSX: AZD and OTC: AZDDF; http://www.azuredynamics.com/), and while it has been announced as a commercial vehicle, there seems a strong likelihood that some portion of the Transit Connects that hit the roads will find themselves serving at least partly as family vehicles.  It’s worth noting that the Transit Connect (which will be available in gas-powered and EV versions) was named North American Truck of the Year for 2010: http://www.northamericancaroftheyear.org/.  AZDDF and AZD shares closed Thursday at $0.26, with average volume of well over 800,000 shares a day in Toronto.   

Privately held Norwegian company, Think Electric, announced last week that it will begin selling its Think City, a mini-sized urban vehicle, in New York City and other US cities: http://www.thinkev.com/Press-Material/Press-releases/THINK-to-begin-selling-city-electric-car-in-New-York.  Think’s US cars will be built in Elkhart IN, near the operations center of its battery supplier and significant partial owner, Ener1 Corp (Nasdaq: HEV; http://www.ener1.com/), which has been the recipient of a hefty federal stimulus award for its own battery operations.  HEV shares closed at $4.40 vs a 52-week high of $7.90 on Thursday, for a market cap of $550 million and daily average trading of  nearly a million shares.  One could own Think indirectly through HEV shares.

Think City EV (in a bubble)

I attended a presentation last month by Henrik Fisker, founder of venture-backed Irvine CA-based Fisker Automotive, which has announced a plug-in electric luxury sports car, the Karma, and is taking orders for it now.  Fisker Automotive has been awarded more than $500 million in federal stimulus loans conditioned on the company’s posting adequate investment matching funds.  While Fisker is privately held, a small minority of its shares are owned by its strategic partner, also based in Irvine CA, Quantum Fuel Systems Technologies (Nasdaq: QTWW; http://www.qtww.com/).  QTWW shares closed at $0.67 on Thursday, vs a year-high of $1.77, with average trading volume climbing toward 2 million shares a day, and a market cap of just under $100 million.  While it seems obvious given the high level of venture capital that has been invested, that Fisker will eventually go public, no plans have been announced to date.

The cloud that hangs over the EV and HEV industries is some worry about whether the car-driving public will give up their gas-powered cars.  Hybrids (there really are very few EVs yet available) as a percentage of sales dropped year-to-year in March: http://blogs.edmunds.com/greencaradvisor/2010/04/march-us-hybrid-sales-rise-18-percent-but-lag-overall-vehicle-growth.html, although the figures are not complete since not all hybrid makers reported.  The Prius still leads the pack with 53% of hybrid sales last month. 

It could be that the EV will attract a more willing audience than the technologically complex dual-system hybrids.  Standard-looking cars like the Tesla and Fisker will be needed to establish that EVs are not glorified golf carts, a moniker still thrown at some of the smaller ones, and once the big car companies are putting EVs in their showrooms that will help as well.  For now, the electric Transit Connect by Ford and Azure Dynamics looks to be the first of those big-name cars in the US, probably followed by their Japanese brethren from Nissan and Mitsubishi.

*client of Allen & Caron, publisher of this blog

CleanEquityMonaco: A Must-Do for the Greentech Aficionado or Investor March 4-5

One of the high points of the greentech year is coming up March 4-5: CleanEquityMonaco (http://www.cleanequitymonaco.com) in the picturebook-lovely city of Monte Carlo.  Interestingly enough it is not a costly conference to attend, probably because it has very distinguished sponsors, and probably worthwhile even for Americans to fly to.  The conference has arranged very attractive hotel rates, a fraction of what one would expect on the Riviera, and quite reasonable flights can be found from the Northeast to Nice (which is the airport for Monaco as well).

Monaco Harbor from the Old City

CEM is a meetingplace for people with new and significant green technologies of all types, and from all over the globe.  There are several plenary meetings set, and some very distinguished guest speakers as well.  Awards for the best technologies and best commercializations will be made by Sir Stelios Haji-Ioannou and HSH Prince Albert II.  The conference coincides with an annual meeting of the United Nations Environmental Programme (UNEP) and green technocrats from all over the world will be in town at the same time.

But the real show are the new technologies themselves.  The publisher of this blog, Allen & Caron (http://www.allencaron.com) is working with the conference organizers on a pro bono basis, and we have admired the arrangements as they have been made over the last 6-8 months. 

Loopwing Wind Turbine from Japan -- meet them at CEM March 4-5

For obvious reasons, the largest category of new technologies will be in the field of alternative energy: solar, wind, new fuels, etc.  But there will also be environmental technologies that run the gamut.  The sponsor and organizer is London-based Innovator Capital (http://www.innovator-capital.com), a boutique investment bank and financial advisor with a devotion to environmental causes, and there will be investment bankers prowling around looking for clients, as well as technocrats from big multinationals looking for acquisitions and partnerships.  Many of the companies that are showing new technologies are not listed or publicly traded, and quite a few are really post-academic, though all have demonstrated proof of what they claim to be able to accomplish.  All are scrappy, feisty, fearless and have new mind-bending ideas.

Some “hot” publicly listed companies will also be presenting, including Shanghai-based China Energy Recovery, Oak Park MI-based Azure Dynamics, Torrance CA-based Enova Systems, Oxford UK-based Oxford Catalysts, Southboro MA-based Protonex, Cuxhaven Germany-based PNE Wind, Perth Australia-based Enerji Ltd,  and Griesheim Germany-based BGI EcoTech.

Jigar Shah, CEO of The Carbon War Room

The keynote speaker will be Jigar Shah, CEO of The Carbon War Room(http://www.carbonwarroom.com) , a noted authority on renewable energy, and the founder of SunEdison, which has more megawatts of solar energy under management than any other company in the world.  Mr Shah is an alumnus of BP Solar, a DOE contractor on fuel cells and alternative energy, and a member of several boards, including Greenpeace USA and the Prometheus Institute. 

Sir Stelios Haji-Ioannou

Sir Stelios will introduce the Next Wave segment of new technologies on the second day of the conference.  He is best known for having founded EasyJet, a leading lowcost airline that has revolutionized European travel, but he is also the founder of several other companies.  His Stelios Philanthropic Foundation is devoted to environmental sustainability, education and entrepreneurship. 

We highly recommend that you consider attending.  The cost is reasonable and the technology rewards potentially earth-changing.  Some of these concepts will completely reorder the way you see the world.

Lithium: Auto Industry Loves It, Feds Throw $$ At It

Last week  there were (at least) two articles that pointed out some important issues in the increasingly big business of electric vehicles.  Neither was front-page news. 

Sexy Tesla Roadster -- and you own part of it theoretically

One was the announcement that a small but widely heralded company, privately held, San Carlos CA-based Tesla Motors (http://www.teslamotors.com) , has gotten the signature of DOE’s Steve Chu and will harvest a bounty of $465 million in federal loans to throw its EV business plan into high gear: http://green.autoblog.com/2010/01/23/done-deal-tesla-doe-complete-loan-paperwork/.  As AutoBlogGreen’s Sebastian Blanco laconically points out, if you’re a citizen of the United States, “you’re officially an investor in Tesla Motors.”  Of course rumors of a Tesla IPO have floated around for quite a while, so you may be able to invest directly one of these days instead of funneling your cash through DOE.

Bolivia's lithium resources are vast -- and look like another world

And in the same week, a distinctly different type of news was purveyed by The Associated Press: Bolivia, which just re-elected Evo Morales as its leader, is unquestionably the Saudi Arabia of lithium, the prize mineral that Tesla and so many others are staking their futures on.  http://autos.aol.com/article/lithium-resource.  Out of the frying pan of oil and into the fire of scarce lithium deposits under dried-up lakes in the Andes?  Notice the sub-headline on the article: “Toyota secures lithium supply in Argentina.”  Argentina may not be a paragon of stability, but compared to Bolivia, it’s Gibraltar (remember that President Morales’s political party is called MAS: Movement for Socialism).  For a slide show of Bolivia’s lithium resources, go to http://www.nytimes.com/slideshow/2009/02/03/world/0203-LITHIUM_index.html (the photo above is from this slide show).

It was not long ago that Toyota’s ice-breaking Prius was a solo act, and most Americans thought of electric vehicles as glorified golf carts.  Now there is a dizzying array of EVs, HEVs, BEVs, PEVs, etc — and they  come with the brand names of virtually every carmaker in the world.   To some extent Prius is still the act to beat, though: http://www.dailytech.com/Honda+Goes+Back+to+the+Drawing+Board+to+Beat+Toyotas+Prius/article17501.htm

And if you think Tesla is pulling in a big fish, have a look at its archrival, Irvine CA-based Fisker Automotive, which secured $115 million in private equity funding this week, in order to allow it to harvest $528 million from DOE.  Basically that means the federal government is committing $1 billion to two very small companies with very pretty cars and very short track records.  And you, as a US citizen, are part of that bounty.

Sexy Fisker Coupe: Feds Have Put $1 billion into loans for Fisker & Tesla

In addition to your taxpayer-funded pending investment in Fisker, though, there is a way to put some Fisker equity into your portfolio, even though it is, like Tesla, privately held.   Irvine CA-based Quantum Fuel Technologies (Nasdaq: QTWW, http://www.qtww.com) owns a stake in Fisker that was said to be 21.9% in a financing document QTWW filed with the SEC about a year ago.  QTWW shares are trading at $0.89, down about half from its year-high of $1.77, and one assumes that the QTWW stake in Fisker has been further diluted in the meantime, because the Fisker financing mentioned in the previous paragraph was also released as QTWW news last week: http://finance.yahoo.com/news/Quantums-Affiliate-Fisker-prnews-2355193003.html?x=0&.v=1.  Smaller slice, but a much bigger pie.

But the distinctly uncomfortable feeling that comes with lithium’s presence in a series of US-unfriendly locations does not seem to be slowing anyone down.  The government of Taiwan makes it clear why this bandwagon continues to roll: according to their forecasts, sales of EVs will grow to 7.29 million units by 2018, of which 86% (or 6.26 million units) will be powered by lithium-ion batteries.  The line of thought leads directly to an increase in Taiwan’s support for Li-ion technology: http://www.greencarcongress.com/2010/01/moea-20100124.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+greencarcongress%2FTrBK+%28Green+Car+Congress%29.  What would a li-ion-powered EV sell for?  What if it were $30,000 per unit?  That would create a worldwide sales projection of  nearly $188 billion for that 2018 theoretical demand.  Hefty, hefty, hefty.

Please keep in mind that we do not recommend stocks; we simply write about companies that we find interesting.  Do your own diligence.

There are various flavors of lithium batteries, including the somewhat under-wraps “Ferrous battery” that China’s BYD introduced at the Detroit Auto Show.  From what we can tell, a Ferrous battery is a lithium iron phosphate battery, so President Morales can rest easy on that one.

There are many ways to invest in the EV movement, or in the lithium sweepstakes.  Most obviously there are the shares of the 3 leading lithium-ion battery makers in the US.  First to consider is Milwaukee-based Johnson Controls Inc (NYSE: JCI; http://www.johnsoncontrols.com/), but they are way too big for us to look at, and besides, they are very diversified.  In terms of pure plays in Li-ion, the two best-known (and bigtime federal funds recipients) are NYC-based Ener1 Inc (Nasdaq: HEV: http://www.ener1.com/), which has recently been screaming ahead, not only announcing car deals, but working with Japan’s ITOCHU on a series of futuristic li-ion applications involving buses and an advanced smart grid.  HEV shares are trading Monday at $4.76, vs a year-high of $7.90, so there are doubts out there in spite of the federal money fountain spewing dollars at them.  HEV has good volume of nearly 1 million shares per day, and a market cap that flirts with $600 million.

The second name that comes to mind is Watertown MA-based A123 Systems (Nasdaq: AONE; http://www.a123systems.com/), which started out making batteries for power tools and has graduated up and up to transport applications.  Since its IPO last year, the stock has always traded above its initial sale, and is trading today at $17.83, with a market cap of $1.8 billion and daily volume of about 2.5 million shares.  Smokin!

Less well known, but just as interesting is Reno-based Altair Nanotechnologies (Nasdaq: ALTI; http://www.altairnano.com/), which may well have more interesting IP than either of its larger peers, but, like the NY Jets, got knocked out of the SuperBowl, at least for this year.  Thomas Weisel initiated on Altairnano in December with an “overweight” rating, but the stock is sagging at half its year-high price of $1.55, trading today at $0.81, and in some danger of being delisted by Nasdaq as a result.   Market cap is about $85 million, and the shares trade pretty well at 400,000+ per day.  Worth a look.

If you want to place your bets outside of Bolivia, however, your options with regard to transportation are fairly limited.  You could start, however, by looking at a company that has, surprisingly, been marginalized among investors because its heritage is in old-fashioned lead-acid batteries.  That is New Castle PA-based Axion Power Inc* (OTCBB: AXPW; http://www.axionpower.com/.  AXPW owns patents on nanocarbon ultracapacitors used in lead-acid batteries in various ways, and is in partnership with one of the world’s largest batterymakers, Milton GA-based Exide Technologies (Nasdaq: XIDE; http://www.exide.com/).  There is good reason to believe that the AXPW-XIDE team may be a contender in the early hybrid-vehicle business, especially in European markets, where carbon-emission regulations come into play in a matter of months, as opposed to the US, where the timeline is longer (but the pair was named for a federal grant of about $35 million last year, and AXPW has received various other federal and state grants as well).  The name of the battery here is PbC, comprised of the chemical symbols for lead and carbon — and whatever the outcome, these batteries will be the low-cost choice for consumers and carmakers, costing a fraction of the more exotic lithium batteries.  AXPW is trading at $1.34 today, vs a year-high of $2.75, so it is off at a rate similar to many of its battery peers.  Market cap is about $80 million after taking into account its December financing, and the shares trade about 32,000 per day.  AXPW will be presenting at the Piper Jaffray conference the last week of February in NYC.

XIDE is trading at $8.30 on volume of 650,000 shares per day for a market cap of about $630 million.  Year-high on XIDE was $8.87.

Equally interesting in the non-lithium part of the world is San Diego-based Maxwell Technologies (Nasdaq: MXWL: http://www.maxwell.com/) .  MXWL delivered it 1-millionth largecell ultracapacitor this month (http://maxwell.investorroom.com/index.php?s=43&item=107), which gives it more operating muscle than most of its peers, and is on track to do about $100 million in revenue for 2009.  MXWL will also be presenting at the Piper Jaffray conference in NYC the week of Feb 22.  MXWL shares are trading at $16.63 at the moment, vs a 52-week high of $21.81.  Average daily volume is about 220,000 shares, and the market cap is $440 million. 

Clearly there are LOTS of players in this arena — we couldn’t possibly survey them completely.  If you use a news aggregator, you will be amazed at the quantity of news on lithium-ion batteries in particular, and on EV batteries in general. 

*Client of Allen & Caron, publisher of this blog