Wind Power to Increase in Sweden

The 30 largest wind power developers in Sweden are planning to develop wind farms amounting to approximately 18GW in power during next few years. This calculation considers approximately 6000 new towers, generating in total 55 TWh per year.
With increasing possibilities for EU member countries to count emission reductions from projects developed in other Annex I countries, this number may as well increase even further.

Further beneficial factors for the wind power industry are looming at the horizon, through a from a recent Swedish government proposal. According the proposal, bureaucratic obstacles will be removed, and the possibility for wind farm neighbors to appeal court decisions will be reduced.

Short term challenges, long term opportunities

No sector is immune to the current financial unrest, and also many cleantech companies will face hard times during the next year or two. And highly leveraged projects, as often is the case with many wind power, may be postponed or cancelled.

Still, there are reasons to believe that the cleantech sector will fare relatively better than other areas. And in the long term, the outlook is still positive. The reasons are several:

• Renewable, domstic energy is a measure to improve national security. It's a long-term necessity independent of the current financial unrest. Public funding will continue to reach the necessary goals.
  

• The possible physical mechanisms behind climate change are indifferent to a Wall Street crisis. Companies who embrace this fact will act accordingly and invest in renewable energy and related technology as a long term strategic resource. Further on, renewable energy will be a priority for public funding.

• Emerging economies will participate in the global emissions market. Sooner or later, giant economies like China and India need to share the burden and reduce the CO2/$ growth ratio.
  
  
• Higher living standards in emerging economies will increase consumer consciousness and the demand for a cleaner near-environment. When you are starving you don't have time to bother about smog or inadequate waste-management, but as conditions improve, these issues will come closer to the top of the agenda. That is good news for companies within these sectors.
  
  
• Energy efficient is more important than ever when times are hard and resources scarse.

In particular, projects and technologies that benefit from public funding will find less problems than others. So will those companies and projects financed by equity rather than debt. The situation is troubling, but there is no need to panic.

Cleantech Opportunities in the Eye of the Storm?

The current financial crisis could possibly affect the energy industry in profound ways, according to Wall Street Journal

Although most opportunities may seem risky at this point, for investor with financial soundness and strength now could be a good period to acquire and take over undervalued assets. With banks turning down borrowers, projects could remain undeveloped and innovations left unfinanced.
Speaking of acqusitions, the largest Swedish power company Vattenfall has made an offer on British Eclipse Energy. The offer at £18 per share roughly amounts to £51,5 million. The company has a 250MW combined natural gas and wind power offshore project, on the coast of England, and five land based wind power projects in Wales. Iberdrola and EON are mentioned as other "predators".

Quote of the day

"Don't get the idea that I've turned green. My business is making money, and I think this is going to make a lot of money."

-- T. Boone Pickens in the Guardian

Takeover king & oil baron T-Boone is planning a $10bn, 4GW wind farm in Texas, which would be the world's largest. He still thinks that wind turbines are ugly. Despite the merits of wind power, I do understand that many find wind turbines as not appealing. It would be far less visually obtrusive to generate power from waste heat (which is possible with the Opcon Power box).

By the way, Boone's biography is entertaining and can be find at bargain prices.

Morphic to get another break-through order

Morphic is one of four contenders for a 4 Bn SEK (approximately US$600 Million) wind power deal. The deal regards the delivery of approximately 100 turbines for the Laholm project of Arise Windpower. The delivery of fuel cells was considered a breakthrough order (in Swedish). This would definitely be another one.

The competition is stiff, however: GE, Siemens and Nordex are the other three contenders.

The Value of Young Cleantech Investment Companies?

While the blog Investeringar i vindmöllor och förnyelsebar energi" (in Swedish) recommends Borevind as an investment, considering it's rather low value, it would not be an investment free of risk. The price/equity ratio is 225%, which is lower to other Swedish cleantech companies. But should Borevind be compared to technology companies such as Morpic or generation asset owner Elous Vind? They have a rather different focus (Morpic develop technology solutions and Elous own wind power projects). No doubt about Borevind having chosen an interesting market niche. Metainvestments in the renewable energy field, if conducted wisely, could be more profitable than focusing on a few specific technologies or one kind of power projects. The Borevind portfolio is not very diverse however, focusing mainly on wind power. The tiny investment in Rindi Energi may be a step in the right direction, considering the stable conditions and increasing demand for this type of bioenergy solutions.

placera.nu (in Swedish) confirms that the Borevind investments need to be quite successful to meet the high expectations. Investors, often institutional ones, may create a hype in the cleantech area when pumping in money into the market without proper previous research, because a general political and public interest in renewable energy. The valuation of companies like Borevind may be a sign of this hype.

Further on, the price-to-equity ratio should be used with care when analyzing young cleantech companies. There is little historical data available and thus difficult to make a comparative analysis. Thus, other factors should be considered to estimate the value and assess the investment opportunity. Price-to-earnings is of one them.

Morphic soon to ship pilot plants

Swedish energy technology company Morphic will soon start to market pilot plants of their hybrid wind power-hydrogen energy systems. Surplus wind power is used to produce hydrogen. The hydrogen can be used in fuel cells when the power demand increases (or for other fuel cell applications). Thus, the system is suitable for places where the conditions don't allow continuous power generation. Further on, the plant is compact enough to be transported on a truck or a jeep - making it useful in remote locations.

The capacity of the plant is not known.