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.

Volvo to resume development of gas vehicles?

Volvo CEO Stephen Odell has only been working for Volvo during a few weeks. According to a recent interview(in Swedish), Volvo may now reconsider their decision to not develop any more gas vehciles.

With their gas vehicles, Volvo had a relatively important part in the promotion of biogas in Sweden during the late 90's and early 00's. During these years the biogas sector developed considerably, with several technology companies starting up as a result. A few years later, Volvo informed about their decision to not develop gas versions of coming models. Until now, perhaps.

Wave Power Already Profitable?

According to a study by Olav Olsen A.S. on behalf of Norwegian Langlee Wavepower, wave power technlogy from Langlee and other companies may already profitable in some parts of Europe such as Great Britain, Ireland and Portugal. The reason for this is the high prices of other types of ocean based energy in these countries.

Langlee, partly (10%) owned by Swedish Borevind, is developing a wave power technology that can exploit the energy relatively small waves.

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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".

New Swedish cleantech company to promote electric car networks in Sweden

According to its CEO Patrik Nilsson, Sustainable Innovation Sust is "a national centre for energy efficiency in everyday life"
The Swedish company is so far supported by a dozen companies, among them Scania, Vattenfall and Sustainable Technology Partners.

Among the top priority for the company is to develop an infrastructue for electric vehicles in Sweden. Through a pilot project using 50-100 electric vehicles Sust and its partner companies will develop an infrastructure and a paymento model.

This project is interesting considering projects being planned or carried out in Israel, Germany and Denmark.

A mix of efforts to achieve higher transport sustainability is necessary to avoid being restrained to only one or two, potentially vulnerable technologies (such as 1st generation ethanol).

IKEA Greentech - a new Swedish cleantech investor

IKEA will invest in Swedish and European cleantech companies, through it's subsidiary IKEA Greentech AB. IKEA prospers from the interesting combination of a excellent distribution network and customer base and a very solid financial position.

In particular, IKEA will invest in cleantech companies with products that benefit it's clients (they amount to 500 000 000), warehouses (270) or suppliers (1500), from the alternative energy and energy efficiency areas.

So what should they focus on? Do the maths, 500 000 000 clients is a very interesting customer base. Hence, finding high-quality products relevant for IKEA's customer should be a top priorirt. Further on, they should be cost-efficient in small scale. An area that satisfies both of these conditions is energy efficiency (including water and material efficency). I would say that where the largest potential is to be found.
Small-scale energy generation using energy from the sun (solar power, solar heating and wind power) does fit with the first description. Small-scale energy generation is getting increasingly popular whit high petroleum prices, and solar insolation is favourable in many of the countries where IKEA is present. However, as discussed earlier, the efficiency of these installations is often far lower than medium- to large scale plants.

Considering what may be useful for their suppliers and warehouses, other areas may be interesting as well.

Sweden has got the largest share of renewable energy in the European Union

Sweden the top nation in the European Union regarding the share of energy coming from renewable sources, according to a recent study by the Swedish Energy Agency. Hydropower and forrest-based bioenergy are two contributing factors. 43,3% of the energy comes from renewable, up from 33,9% in 1990. 52% of the power supply is generated by renewable sources. The largest share is reached in the power sector, followed by the paper & pulp industries and the district heating sector. According to the study, the largest room for improvements regards the transport sector, which only represents 1% of the renewable energy use in Sweden.

Other countries in Scandinavia, while non-members of the European Union, generate an ever higher share of their energy from renewable sources. Iceland is the foremost example, with 73% of total primary energy supply and 100% of power production comes from renewable sources. Further on, an impressive 98% of Norwegian power supply comes from hydropower.

There are certainly many opportunities to increase the share of renewable energy in Sweden even further. Many medium-sized to large initiatives are under way. Large wind farms are being developed throughout the country for power production, and many medium-scale biogas plants are planned in southern and central Sweden. The biogas sector is already extensive in southern Sweden and in the Stockholm area. Further it is fairly within reach to increase the hydro power output by increasing and optimizing the generation the rivers already being used, and to develop low-temperature geothermal energy systems for heating. And as capital costs decrease, solar power and wave power will also be feasible options, although it would take many years for these types of energy to constitute an important part of the Swedish energy sector.