IPO Shows Appetite for Green

A123 Systems Inc (AONE), a lithium-ion battery maker, jumped 50% over the IPO price on its first day of trading yesterday. Shares were sold at $13.50 and closed over $20 on their debut.

The initial jump gives the company a market capitalization of $1.9 billion. This is clearly a highly speculative valuation for a company that has yet to turn a profit. Investors are showing a strong appetite for a piece of the green industry given its potential.

Nuclear vs. Coal: A Pollution Comparison

Excerpted from Trashing the Planet by Dixy Lee Ray with Lou Guzzo:

First, comparing the effluents from a 1,000 megawatt electric (MWe) coal plant with a nuclear plant of similar size reveals that the coal plant produces carbon dioxide at a rate of 500 pounds per second or seven million tons per year; the nuclear plant produces none. The coal plant produces sulfur oxides at a rate of one ton every five minutes, 120,000 tons per year; the nuclear plant produces none. The coal plant produces nitrogen oxides equivalent to 200,000 automobiles, 20,000 tons per year; the nuclear plant produces none. The coal plant produces quantities of smoke whose large particles are generally filtered out, but the small, dangerous ones remain and are spread widely; the nuclear plant produces none. The coal plant produces more than 40 different organic compounds that are released without control to the atmosphere; the nuclear plant produces none. Finally, since all coal contains some uranium, radium, and thorium, coal plants release unmonitored amounts of radioactivity; the only radioactive element released to the atmosphere by nuclear plants in Krypton-85, a harmless, noble gas, which is released in minute quantities under strict control.

Turning to solid waste, it is produced in a coal-burning plant at a rate of 1,000 pounds per minute, or 750,000 tons per year; the annual amount of spent fuel from a nuclear plant is about 50 tons. The hazardous ingredients in coal ash include arsenic, mercury, cadmium, and lead, all of which maintain the same degree of toxicity forever. This material is discharged to the environment without controls. The nuclear plants' spent fuel continuously loses radioactivity, eventually decaying to background levels. Disposal of nuclear waste is strictly controlled. The annual amount of fuel required for a 1,000 megawatt coal-burning plant amounts to 38,000 rail cars of coal, three million tons per year; for a nuclear plant of similar size, six truckloads, or about 50 tons of fuel per year (and that includes the heavy metal-carrying casks), are all that are used...

Since many of the wastes from coal-burning plants are airborne, their ultimate disposal takes place on land, in water, and, of course, in people's lungs. Comparative risk studies put the health effects of coal burning at about 50,000 fatalities annually. From nuclear power there are none...

The lack of environmental effect in using nuclear power relates to the fact that the process does not involve chemical combustion and operates on the principle of containing wastes, not dispersing them.*

Expanding nuclear power capability seems to be the only logical choice.

*Emphasis mine.

BRIC Doubts Us

Editor's Letter: Cutting greenhouse gas emissions

In spite of their pledges and promises, the world’s industrialized nations are unlikely to take serious action to cut carbon emissions.

Let’s suppose for a moment that a friend tells you he’s decided to give up smoking—40 years from now. How seriously would you take him? Not very, which is the only rational response to last week’s empty pledge by the world’s industrialized nations to make an 80 percent cut in their greenhouse gas emissions by … yes, the year 2050. This Augustinian pledge—Lord, give me chastity, but not just yet—did not fool India, China, and Brazil, which said in effect: When the wealthy societies actually cut emissions, let us know. Otherwise, we’re going to keep burning fuel and improving our standard of living, just as you did for the past 150 years.

It makes sense, of course, for Western governments to try to limit the warming trend scientists now say is inevitable. But the same scientists say we need to cut emissions by 40 percent in just the next 20 years. It won’t happen, not if recent history—and human nature—is any indication. Despite a lot of fine talk, most of the major countries that signed on to the Kyoto accords failed to meet their very modest emissions targets. And any future small reductions will be negated by all the cars and coal-burning plants going on line in China and India. The world has but one real hope of halting global warming, and that’s a technological breakthrough—a new source of energy that doesn’t produce greenhouse gases, and is cheaper than oil, gas, and coal. Until that day comes, promises about creating “green,” carbon-free societies fall in the same category as “family values” politicians prattling on about sexual morality and the sanctity of marriage. These are all fine things, as long as they come at some future date.

William Falk

Carbon Trading 65% Off Lows

The European Climate Exchange (ECX) is the leading marketplace for trading carbon dioxide (CO2) emissions in Europe and internationally. Prices for carbon steadily declined over the past year along with most other traded markets falling from the high $20s to a low of $8.06 in February. Since the low carbon allowance contracts are trading up 65% for an average price of $13.35 as of yesterday.

Carbon trading is dominated by European exchanges but the United States is seeing impressive growth while awaiting legislation from Congress. The European Climate Exchange is owned by Climate Exchange Plc, traded under symbol CLE on the London Stock Exchange's AIM market. CLE also owns the Chicago Climate Exchange and the Chicago Climate Futures Exchange here in the US in hopes that it can take a foothold in the developing US market.

Carbon credit markets seem to be the inevitable future and TWS is dedicated to educating its readers on developments in these markets. While having been seen as a future possibility for some time now, the recent legislation in Congress leads us to believe that this market may become much more highly developed sooner rather than later. More to come in future months.

Congress Eases Towards Nuclear

Nuclear could benefit from U.S. climate bill

By Timothy Gardner
NEW YORK, July 7 (Reuters) - The U.S. climate bill, a centerpiece of President Barack Obama's green agenda, could stall in the Senate unless it contains incentives to help the nuclear power industry build the next generation of reactors.

The House of Representatives narrowly approved its version of the bill late last month and it included little mention of nuclear energy.

But that looks set to change as a group of moderate Democratic and Republican senators who strongly back nuclear power tries to wrest industry concessions.

A key question is whether the industry and its allies can convince enough lawmakers that nuclear power, long seen as an environmental headache due to its radioactive waste and potential safety risks, is actually a solution to worsening global warming.

Senate Begins Work on Climate Bill

U.S. Senate begins push for climate change bill

By Richard Cowan

WASHINGTON, July 7 (Reuters) - Democrats in the U.S. Senate on Tuesday began a drive to advance climate change legislation, a top Obama administration priority, amid warnings that a bill recently passed by the House of Representatives to reduce carbon emissions would have to be changed.

Among changes that could be sought to win broader Senate support for the bill are less ambitious carbon emission reduction goals, the inclusion of nuclear power as an alternative energy source, and tougher regulation of the pollution permits that companies could trade to each other.

President Barack Obama sent four Cabinet secretaries to Capitol Hill to testify at the Senate Environment and Public Works Committee as it tries to build support for legislation to reduce greenhouse gas emissions blamed for global warming.

While Congress grapples with ways to control U.S. carbon emissions, Obama also wants the United States to play a significant role in global efforts. Currently, the United States and China are the world's leading carbon polluters...

Solar Company Growth Snapshot

A quick snapshot of publicly-traded solar companies on US exchanges shows absolutely impressive growth year-over-year. Even through this global recession, not a single company on this list has revenue growth less than 40% YOY. Clearly, most of these companies are very small but their ability to sustain extremely high growth rates in a contracting economy must attract investor interest. Companies such as these should be the first ones to rebound as the economy turns the corner.

Solar Company	Ticker	Market Cap	YOY Revenue Growth
First Solar	FSLR	$14.7B	131.5%
Suntech Power Holdings	STP	$2.8B	42.7%
Yingli Green Energy	YGE	$1.7B	98.9%
SunPower Corporation	SPWRA	$1.3B	51.7%
LDK Solar	LDK	$1.2B	213.7%
JA Solar Holdings	JASO	$836M	206.4%
GT Solar International	SOLR	$831M	169.2%
Trina Solar Limited	TSL	$680M	175.6%
Canadian Solar	CSIQ	$466M	132.8%
ReneSola	SOL	$419M	121.6%
Evergreen Solar	ESLR	$381M	56.3%
Solarfun Power Holdings	SOLF	$344M	219.5%
China Sunergy	CSUN	$206M	88.8%
Ascent Solar Technologies	ASTI	$159M	54.5%

World Carbon Emissions

Green Investment Picks Up in Q2

Q2 2009 Greentech Deal Summary: VC, M&A, IPOs

This month's finance portion of the Greentech Innovations Report looks at the 2009 second quarter venture capital investment in greentech.

Optimism prevailed amongst greentech venture capital investors in the second quarter of 2009. Despite the eulogies delivered for the greentech sector because of a less-than-stellar first quarter, VC investment in greentech rebounded in the second quarter with more than $1.2 billion invested in 85 startups - a 50 percent increase. This is up from $836 million in 59 deals in the first quarter of 2009.

Solar power was once again the leading investment segment at more than $330 million. Unlike previous quarters - the second quarter saw a much more balanced distribution across the various sectors with a marked increase in automotive (more than $202 million) and energy storage (more than $180 million).

One of the drivers for steady second quarter venture investment was the promise of stimulus monies offering startup investors a non-dilutive funding source. Meanwhile, early-stage and late-stage investments dominated, while mid-stage funding was harder to come by, and the average round sizes were slightly smaller. There were no giant $100 million+ solar or biofuel rounds as in 2008.

Following Green Legislation

American Clean Energy And Security Act of 2009

"To create clean energy jobs, achieve energy independence, reduce global warming pollution and transition to a clean energy economy.

"This is the Waxman-Markley comprehensive energy bill, known for short as "ACES," that includes a cap-and-trade global warming reduction plan designed to reduce economy-wide greenhouse gas emissions 17 percent by 2020. Other provisions include new renewable requirements for utilities, studies and incentives regarding new carbon capture and sequestration technologies, energy efficiency incentives for homes and buildings, and grants for green jobs, among other things."

The American Clean Energy And Security Act of 2009 barely passed through the House of Representatives by a 7-vote margin. Most onlookers do not expect much from the Senate as support is mixed and the bill will likely be drastically changed before any attempt at passage. Yet, the Obama adminstration has been a strong supporter of green legislation and there is a chance the Senate will move on this bill.

Track the bill's progress here at TWS Investments!

Follow the Smart Money: Green!

Where is smart money heading as the market turns? A large amount of capital is racing to the clean energy sector as investors see a new wave of innovation and the possibility of explosive growth. The path to a sustainable energy strategy is likely transformational to the world economy. The transition from a carbon-based energy economy to one of alternatives seems inevitable and only a matter of time. The difficultly lies in entering the field at the right time so as not to be too early or too late to the upcoming wave. Yet, the tide seems to be incoming. Where should recent graduates look for employment? Green technology!

Instituations see major growth in the clean energy sector over the coming years. The Obama administration appears to be committed to implementing a clean energy investment plan. To achieve his administration's goal of generating 25% of energy from renewable sources by 2025, they will be making unprecedented investments in renewable energies. While expectations have been reduced with the current economic downturn, 75% of institutional investors see increased investment over the next 3 years.



The world has seen rapid growth in clean energy investment over the past 5 years. 2008 was the first year of less than 50% growth registering a mild 5% growth in investment as a result of the global economic downturn. A total of 10% of global energy infrastructure spending is allocated to clean energy. The maintaining of a positive growth rate in investment through this recession is relatively impressive confirming the high probability of greater investment down the road.



Investors can benefit from this wave by establishing a position in the PowerShares Global Clean Energy Portfolio (PBD). The PBD tracks the WilderHill New Energy Global Index (NEX) which is comprised of 85 clean energy companies listed on 24 exchanges in 21 countries around the world. The fund focuses on companies "whose innovative technologies and services focus on the generation and use of cleaner energy, conservation, efficiency and the advancement of renewable energy in general". The Index has 30% weightings in both wind and solar with smaller weightings in energy efficiency, biofuels & biomass, other renewables, power storage and energy conversion. The NEX is determined by a group of 45 industry analysts working for the industry-leading New Energy Finance.

Major stock market downturns typically cause the greatest pain to the most speculative stocks. These large declines in price are great buying opportunities prior to a revival in economic growth and a stock market turnaround. The PBD is already up 19% year-to-date outpacing the S&P 500 by over 17%. Investors see large growth in this sector and are snatching up shares in anticipation. An investment in a broad, diversified sector fund may see market-beating capital appreciation over the long-term.