03/16/08 (www.emfis.com) Over the past few weeks, Emfis has covered a number of stories about solar energy and solar technology in China. Today, we’ll take a look at this important growth sector, and how investors can profit from renewable energy in emerging markets, especially China.
Renewable Energy Growth
According to the latest research report from Clean Edge, a leading research and publishing firm helping companies, investors, and governments understand and profit from clean technologies, growth in this sector can be expected to continue steadily. They divide clean energy sources into four categories in their research: biofuels, wind power, solar power and fuel cells. Revenue growth for the four types combined was 40 percent in 2007, increasing from $55 billion in 2006 to $77.3 billion in 2007. New global investments have expanded by 60 percent from $92.6 billion in 2006 to $148.4 billion in 2007, according to New Energy Finance.
Solar Power alone had revenues of $20.3 billion in 2007. Clean Edge expects that number to grow to $74 billion over the next decade. Annual installations in 2007 were up nearly 500 percent from just four years ago, totaling 3 GW worldwide. Installed solar PV stations totaled 2,821 MW in 2007, with Clean Edge projecting 22,760 MW for 2017, quite a rapid growth rate, considering the figure was at only 620 MW in 2003.
The cost of going green is often seen as a prohibitive factor in building green energy plants. Consider some of the numbers gathered by Clean Edge before coming to any conclusions. Their report shows that average upfront capital costs for a 1 GW nuclear plant are between $2 and $6 billion, compared with $5 to $10 billion for solar, $1.6 billion for geothermal, and $1.4 to $1.8 billion for wind. A conventional coal plant costs $750 million to $1.4 billion, in contrast. The obvious advantage to the renewable technologies over coal and nuclear is the fact that the solar, geothermal and wind plants will have zero cost for fuel while operating. In the long RUN this makes them potentially substantially more profitable.
Solar Growth in China
Solar is of particular interest in China, where about 80 percent of current energy is provided by coal. As part of the nation’s commitment to the Kyoto Protocol, the government plans to get 120 GW of new renewable energy by 2020. This is more than 10 percent of China’s total projected energy demand, and more than three times the amount it plans to get from nuclear power.
Chinese companies are rising to meet the expected demand. On February 24, Emfis reported that TRUenergy Pty, an Australian subsidiary of Clp Holdings Ltd., the largest Hong Kong power utility, plans to invest $285 million into the world’s largest solar power station. This is big News for the Hong Kong provider, but the even bigger News is that Clp Holdings has signed a 10 year agreement with Solar Systems to utilize the same technology in Asia to develop stations of up to 1 gigawatt.
These types of projects will continue. Chinese companies are forming more joint ventures with companies both inside and outside of China. Growth will likely continue to surge in the renewable energy sector around the world, but we expect even more performance and activity in China.
Recent News: Solar Companies to Watch in China
- Shenzen Topraysolar Co., a domestic maker of solar cells, debuted on the Shenzen Stock Exchange on February 28. The IPO price was set to 10.79 yuan, and the stock rose as high as 57 on the First day of trading. The stock was trading at 43.60 as of 10:35 in Beijing.
- JA Solar Holdings Co., a solar cell manufacturer, reported a 46.7 percent jump in quarterly profits on Wednesday of last week.
- Suntech Power Holdings Co., Ltd., a solar cell manufacturer, announced last week it will invest up to $100 million for a minority stake in Nitol Solar Ltd., a Russian silicon producer. Suntech had previously inked a multiyear silicon supply deal with Nitol in August 2007.
- Yingli Green Energy Holding Co. Ltd., yet another PV solar cell manufacturer, announced net revenues of approximately $969 million and $1.020 billion. According to Reuters Estimates, analysts were expecting the Company to report revenues of $901 million.
- LDK Solar Co Ltd., a solar wafer manufacturer, announced last week that it had sold out 100 percent of its production capacity for 2008, and more than 90 percent of its capacity for 2009.
- Trina Solar Ltc., a maker of solar wafers, cells and modules, announced a deal worth $49 million with U.S. solar company GT Solar to provide Trina with equipment to build and operate its polysilicon production facility in China.
- Sunvim Group Co. Ltd. has entered into a deal with German solar cell manufacturer Johanna Solar Technology GmbH to build a 60 MW solar generation facility scheduled to complete its First phase by the end of 2009.
- China Sunergy Co. Ltd., a silicon solar cell manufacturer, will be announcing its earnings this month on March 26. Expect a report from Emfis.
- Solarfun Power Holdings Co. Ltd. is a manufacturer of silicon solar cells and PV modules primarily on the Chinese domestic market.
Conclusion
With the massive amount of expected growth in renewable energy over the next decade, this sector of the energy market will continue to be of special interest to investors. China, in particular, with its rapidly expanding demand for power and its horrible pollution from fossil-fuel plants, is poised to be a leader in this market.
Emfis will continue to cover the renewable energy market, and to pay close attention to China and other Asian markets with regards to this growth sector. While we focused on solar in this column, look for future columns on other renewable technologies, especially wind and biomass, which are presently also seeing major growth in China.
For those interested in investing in the companies listed above, Emfis would like to point our readers to LDK, which may be the most important of these stocks to watch. It was trading at its 52-week low just last week, and is currently on the rise. We predict a continued upward trend on this stock.
While we have enthusiasm about recent power developments in China, we also issue a caution to investors. The Beijing Olympics in August may play a highly significant influence upon investing in environmental technologies. Be cautious at the end of the games.
Reprinted with permission. I am the author of the article, and work for Emfis.
Renewable Energy Growth
According to the latest research report from Clean Edge, a leading research and publishing firm helping companies, investors, and governments understand and profit from clean technologies, growth in this sector can be expected to continue steadily. They divide clean energy sources into four categories in their research: biofuels, wind power, solar power and fuel cells. Revenue growth for the four types combined was 40 percent in 2007, increasing from $55 billion in 2006 to $77.3 billion in 2007. New global investments have expanded by 60 percent from $92.6 billion in 2006 to $148.4 billion in 2007, according to New Energy Finance.
Solar Power alone had revenues of $20.3 billion in 2007. Clean Edge expects that number to grow to $74 billion over the next decade. Annual installations in 2007 were up nearly 500 percent from just four years ago, totaling 3 GW worldwide. Installed solar PV stations totaled 2,821 MW in 2007, with Clean Edge projecting 22,760 MW for 2017, quite a rapid growth rate, considering the figure was at only 620 MW in 2003.
The cost of going green is often seen as a prohibitive factor in building green energy plants. Consider some of the numbers gathered by Clean Edge before coming to any conclusions. Their report shows that average upfront capital costs for a 1 GW nuclear plant are between $2 and $6 billion, compared with $5 to $10 billion for solar, $1.6 billion for geothermal, and $1.4 to $1.8 billion for wind. A conventional coal plant costs $750 million to $1.4 billion, in contrast. The obvious advantage to the renewable technologies over coal and nuclear is the fact that the solar, geothermal and wind plants will have zero cost for fuel while operating. In the long RUN this makes them potentially substantially more profitable.
Solar Growth in China
Solar is of particular interest in China, where about 80 percent of current energy is provided by coal. As part of the nation’s commitment to the Kyoto Protocol, the government plans to get 120 GW of new renewable energy by 2020. This is more than 10 percent of China’s total projected energy demand, and more than three times the amount it plans to get from nuclear power.
Chinese companies are rising to meet the expected demand. On February 24, Emfis reported that TRUenergy Pty, an Australian subsidiary of Clp Holdings Ltd., the largest Hong Kong power utility, plans to invest $285 million into the world’s largest solar power station. This is big News for the Hong Kong provider, but the even bigger News is that Clp Holdings has signed a 10 year agreement with Solar Systems to utilize the same technology in Asia to develop stations of up to 1 gigawatt.
These types of projects will continue. Chinese companies are forming more joint ventures with companies both inside and outside of China. Growth will likely continue to surge in the renewable energy sector around the world, but we expect even more performance and activity in China.
Recent News: Solar Companies to Watch in China
- Shenzen Topraysolar Co., a domestic maker of solar cells, debuted on the Shenzen Stock Exchange on February 28. The IPO price was set to 10.79 yuan, and the stock rose as high as 57 on the First day of trading. The stock was trading at 43.60 as of 10:35 in Beijing.
- JA Solar Holdings Co., a solar cell manufacturer, reported a 46.7 percent jump in quarterly profits on Wednesday of last week.
- Suntech Power Holdings Co., Ltd., a solar cell manufacturer, announced last week it will invest up to $100 million for a minority stake in Nitol Solar Ltd., a Russian silicon producer. Suntech had previously inked a multiyear silicon supply deal with Nitol in August 2007.
- Yingli Green Energy Holding Co. Ltd., yet another PV solar cell manufacturer, announced net revenues of approximately $969 million and $1.020 billion. According to Reuters Estimates, analysts were expecting the Company to report revenues of $901 million.
- LDK Solar Co Ltd., a solar wafer manufacturer, announced last week that it had sold out 100 percent of its production capacity for 2008, and more than 90 percent of its capacity for 2009.
- Trina Solar Ltc., a maker of solar wafers, cells and modules, announced a deal worth $49 million with U.S. solar company GT Solar to provide Trina with equipment to build and operate its polysilicon production facility in China.
- Sunvim Group Co. Ltd. has entered into a deal with German solar cell manufacturer Johanna Solar Technology GmbH to build a 60 MW solar generation facility scheduled to complete its First phase by the end of 2009.
- China Sunergy Co. Ltd., a silicon solar cell manufacturer, will be announcing its earnings this month on March 26. Expect a report from Emfis.
- Solarfun Power Holdings Co. Ltd. is a manufacturer of silicon solar cells and PV modules primarily on the Chinese domestic market.
Conclusion
With the massive amount of expected growth in renewable energy over the next decade, this sector of the energy market will continue to be of special interest to investors. China, in particular, with its rapidly expanding demand for power and its horrible pollution from fossil-fuel plants, is poised to be a leader in this market.
Emfis will continue to cover the renewable energy market, and to pay close attention to China and other Asian markets with regards to this growth sector. While we focused on solar in this column, look for future columns on other renewable technologies, especially wind and biomass, which are presently also seeing major growth in China.
For those interested in investing in the companies listed above, Emfis would like to point our readers to LDK, which may be the most important of these stocks to watch. It was trading at its 52-week low just last week, and is currently on the rise. We predict a continued upward trend on this stock.
While we have enthusiasm about recent power developments in China, we also issue a caution to investors. The Beijing Olympics in August may play a highly significant influence upon investing in environmental technologies. Be cautious at the end of the games.
Reprinted with permission. I am the author of the article, and work for Emfis.
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