Cleantech Investments A Mixed Bag in 2Q13, But VCs Are Warming Up To Solar

New Hampshire, USA -- Investments in the renewable energy sector were a mixed bag during the second quarter of 2013, according to a trio of analyst reports and many of the same trends we've seen lately persist: the U.S. and Asia-Pacific regions were more active, and downstream activity continues to intensify.

Taking the broadest view, Bloomberg New Energy Finance (BNEF) tallies $53.1 billion in global clean energy investments in 2Q13, up 22 percent from the prior quarter, though down about 16 percent from a year ago. An upswing in investments in the U.S. and China was offset by declines in Europe and globally overall: China was the biggest cleantech investor at $13.8 billion, with the U.S. at $9.5 billion, while investments in Germany and the U.K. fell precipitously from a year ago (to $1.9 billion and $1.7 billion, respectively). South Africa surprised analysts with $2.8 billion in 2Q13 cleantech investments, "up from almost nothing" in the first three months of 2013. Biggest beneficiaries of more financing were wind and solar projects, especially utility-scale ones. Another metric: asset finance was split roughly 70/30 between domestic and cross-border investments. (Here's a video summing up the BNEF cleantech investment findings.)

The Cleantech Group, meanwhile, cites $1.76 billion specifically in global cleantech venture investments in 2Q13, a 56 percent surge from 1Q13, though the number of total deals was off from 1Q13's record high (214 vs. 246). North American venture investments leaped 74 percent to $1.25 billion, while the Asia-Pacific totaled $267 million -- far more money than in 1Q13 for the same number of deals -- and Europe saw less activity in both dollars and deals. Energy efficiency companies secured the most cleantech funding ($378 million), followed by biofuels/biochemicals ($231 million) and solar ($170 million). Bloom Energy (fuel cells), Intrexon (biotech), Skyonic (carbon capture/reuse), China XEMC (wind turbine components), Hefei (solar projects), Blu Homes (energy efficient homes), View (nee Soladigm, energy-efficient glass), Aligned Energy (energy-efficient data centers), and Lampris (renewable energy).

And narrowing even further to just the solar sector, Mercom Capital reports VC investments increased in dollar amounts in 2Q13 from the prior quarter ($189 million vs. $126 million) but the number of deals was down (19 vs. 26), suggesting that investors are interested in the sector but are increasingly picky. Top fundraisers were Chinese solar developer Hefei Golden Sun (raising $69 million) and Clean Power Finance ($42 million), with three other investments coming in between $10-$15 million. Most of the funding momentum continues to head downstream: third-party solar plays topped another record $1.33 billion in publicly-announced residential and commercial solar project funds -- already on par with what was raised during all of 2012. And large-scale project funding totaled $2.94 billion, up from $1.77 billion in 1Q13, including a record $1 billion solar bond offering by MidAmerican Energy subsidiary Solar Star Funding. Another interesting numerical nugget from Mercom: Chinese banks have pledged $53 billion to date in loans, credit facilities, and other types of debt agreements.

Know When to Hold 'Em...

Conversations with startups and a panel session at last week's Intersolar North America pointed to renewed interest from the VC community to put money into solar again, according to Fatima Toor, senior analyst at Lux Research. "Certainly the money going downstream is much more significant, but the fact is there's general interest."

What's been happening for several quarters now, points out Raj Prabhu, managing partner at Mercom Capital, is that funding activity has been below par and money's still tight -- take out that big Hefei deal and the solar sector activity was basically flat in 2Q13, he notes. Companies further downstream, including projects, continue to be the most active funding areas compared with more upstream manufacturing-centric ones. "After all the money that went into thin-film, CSP, CPV companies with no returns, VCs are very, very skeptical," he said.

Solar VC Funding, 2Q13. Credit: Mercom Capital Group LLC

Nevertheless, "when there's a unique technology it still gets funded," he said, citing recent examples in Solexel and Scifiniti. The central message is that investor insterest lies in technologies that are not new and unique, but rather ones that "can improve on existing technology and efficiency a little bit, cut costs here or there, and improve processes," he said. "These are the types we're seeing so far." Lately, for example, he's been seeing more activity in high-efficiency solar panels (specifically monocrystalline silicon tech) and an increased focus on commercial and residential installations.

One positive indicator is that more financial institutions and investment groups are getting involved in solar project acquisitions, because of the calculated returns. "Solar has reached the point in the last 12 months or so where investors do feel it's safe enough, especially institutional investors, and expect a healthy return," he said. He's also seeing more use of bonds to finance projects, which "shows some maturity for solar as an asset class." With bond interest above 5 percent, "where can you park your money right now in the U.S. and get five-plus percent? You can't even get a percent for a CD," Praghu said. With money abundantly available thanks to friendlier federal policies, "5 percent looks like a really good bet, with a lower risk profile," he said.

... And Know When to Fold 'Em

Part of the mindset of an investor is knowing how to identify and ride an early wave of success -- and knowing when to get off the ride. In the case of the boon in solar third-party funding, "that's what a lot of people are wondering," Prabhu said. The third-party business model, which relies heavily on vendors taking the tax credits, has some fundamental uncertainty once the 30 percent investment tax credit (ITC) times out in 2016. And if prices continue to come down, will solar become so attractive that direct ownership makes more sense than leasing? As investors, particularly those who look ahead to annual tax obligations, start to look at solar investments, the thinking around these types of concerns "has to evolve pretty soon," he said.

One last data point Prabhu points out: bankruptcies and insolvencies are actually dropping, roughly half what they were at this time a year ago. "That's what I look at when I tell people, 'we're a little better off than where we were,'" he said. "But [we're] not completely off the hook."

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Move mixed reaction to New Jersey Fracking

TRENTON, n.j., 26 Aug. UPI)-oil State groups a New Jersey advance applause shale gas but said environmental groups continue to Glencore would send the wrong message.

Governor of New Jersey Chris Christie conditionally veto legislation, which, would have banned permanently hydraulic Division or Glencore in the State. He appointed officials, the process of the elaboration of rules, to ensure that the process is carried out safely.

James Benton, executive Director of the New Jersey petroleum, in a statement welcomed Christie's decision as to the natural gas-rich state.

"A balanced approach for the development of our domestic resources remarkable can be opportunity for New Jersey and our nation's energy security," he said.

Christie opted for a one-year moratorium Glencore instead of a full ban.

Interest group for food and water watch, said the decision showed oil and gas profits before public interest come.

"The legislative New Jerseyans of public health and environmental risks which should protect Glencore, by tipping over Christie's decision", said in a statement the Group Executive Director Hamburg Hauter.

The ban on approved State legislators in the mostly democratic State. Christie and his Lieutenant Governor are Republicans.

Critics of the Glencore say that chemicals used in the process can contaminate ground water. Several energy companies and some State regulators are calling for these claims.

The United States has some the richest deposits of shale gas in the world.

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Turkey sends mixed messages on climate change position

Heavy rains brought to a halt due to excessive flooding various provinces such as Erzurum, Gaziantep, Siirt, Malatya and Antalya. But Turkey remains hazy attitude to climate change.

A signatory of the Kyoto Protocol, but a bad renewable energy producer, Turkey currently seeks the answer to the optimization of energy production. At the same time tried to ensure that the greenhouse gases released not increase power generation Turkey. Turkey has one of the lowest greenhouse gas emissions per capita in Europe.

Dr. Mikdat Kad?oglu, the Director of disaster management research and Application Center on Istanbul Technical University (ITU), suggested that Turkey didn't feel the adverse effects of climate change still has. He argued that climate change drastic impact on the weather, would suggesting that it would be "City floods" and droughts, add, that the State Waterworks Authority (DSI) does not have the capacity to deal with "City floods."

Kad?oglu Turkey also criticized attitude to climate change, that no organization in Turkey has the ability to deal with climate change, argue, that there no future-oriented perspective in dealing with the future environmental consequences of climate change.

Yunus Muluk, a political representative of the Green Party in Istanbul explains that "climate change a problem with that is the whole world." Climate change will have a course, Turkey. Weather inconsistencies are an example of how climate change has affected Turkey. Previously, witness the Akdeniz region never weather inconsistencies. Prior to recent weather inconsistencies common in the region become. In Istanbul have similar inconsistencies were experienced. In addition were typhoons and storms never really in Turkey. "But seem they are now much more often."

The Government currently trying alternative energy procedure set, to reduce the level of greenhouse gases and to minimize the Turkey international energy dependency. As a result continue to hydroelectric power plants at a rapid pace to open. Three new nuclear power plants will be built by 2023 set.

Nuclear energy, effective preventive action for climate change?

In order to counter the adverse effects of climate change, Turkey recently has the decision, nuclear power plants, create, which are to a viable option for the fight against climate change. Much controversy surrounds this latest decision. Muluk argues: "Scientists in Turkey believe nuclear energy will solve the problem of climate change." This is true but not completely. First of all, the construction of a nuclear power plant is a large amount of time. Secondly, as soon as the power station works, it can affect his environment. "Therefore climate change will continue with or without nuclear power plants."

International criticism followed Turkey's decision to go nuclear. More recently, the newspaper the guardian outlines the potential risks of Turkey building a nuclear power plant so near a fault line. "Turkey planning three nuclear power plants in Akkuyu on the Aegean Sea." The website is only a few kilometres from the active Ecemis error and is in an area where large earthquakes in the past occurred. "A 1999 earthquake in Turkey killed nearly 20,000 people."

Germany, once a strong supporter of nuclear power plants, has confirmed that they all will end their nuclear power plants by 2022. This decision re-sparked debate in Turkey's nuclear decision.

Electricity generated from hydropower more profitable?

Turkey has also the capacity for the development of hydroelectricity. Necdet Pamir, an energy expert who taught at the Bilkent and Istanbul Kultur earlier told universities, Zaman Sunday, that Turkey energy easily be could met by alternative and renewable energy sources, that Turkey is not yet detected.

According to the Pamir, the potential hydroelectric power in Turkey is the area large. He added that hydropower is one of the most important energy sources for conservation as its technical and economic potential is around 140 billion kilowatts, beats arguments that claim Turkey lacks sufficient alternative energy sources are not entirely true, hours (kWh) and 170 billion kWh with the right technology has been increased. Such potential will be realized only 35 percent of the hydroelectric energy and 65 per cent is waiting to develop energy needs for Turkey says Pamir.

There are currently 172 operational hydroelectric power stations in the country, while 148, which are more built at this time. However, a large number of environmental non-governmental organisations in Turkey are strong against the existence of the hydroelectric power plants. Hydroelectric power plants have significant ecological disadvantages, including eco-system damage, loss of land and methane emissions.

Turkey, which imports 70 percent of the energy, as is currently the dilemma of trying, minimize its impact on climate change by you produce home-made, safe and sustainable long-term options for energy.

"Improved the capacity of the Turkey to adapt to climate change"

A project entitled "improving the capacity of the Turkey to adjust, climate change," the together by the Ministry of environment and forestry and development programme of the United Nations (UNDP) run was, was to develop a "capacity to manage climate risks change, rural and coastal development in Turkey".

"This was achieved by mainstreaming climate change adaptation in the national development framework, capacity-building in national and regional institutions, to integrate piloting community based adaptation projects in the river basin of the Seyhan and climate change adaptation into all United Nations agencies in Turkey." The project had a 7 million US-dollar-budget, and just completed, running from June 2008 - June 2011.

The project however not attracted a large amount of criticism for the handling of questions of climate change. The Ankara Photographers Association (AFSAD) and Middle Eastern Technical University Alumni Association (Turkey MD) proposed that plan to combat climate change is not yet clear to Turkey. Argued that the plan will not plan to change climate, such as with the hydro power plants, which will destroy a large amount of Turkey ecosystem reality with Turkey. Also beat Dr. Gunay can, regularly writes for the Yesil Gazete (green newspaper), that the plan not to questions of climate change significant, such as for example Turkey energy dilemma.

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