by TYLER HAMILTON, ENERGY REPORTER for TheStar.com
Xantrex shares rise on clean power revenue growth
Shares in Xantrex Technology Inc. jumped 3 per cent yesterday after the company said "excellent" growth in the sale of wind and solar power products boosted revenues and profits in its second quarter.
Revenue for the period rose 18 per cent to $40.5 million compared to a year ago, based largely on 72-per-cent growth in the sale of inverters and other products for renewable power markets in North America, Europe and parts of Asia.
Profit soared to $2.3 million, up from a loss of $515,000 a year ago and more than quadrupling net income over its first quarter. Cash flow from operations grew to $3.5 million compared to $558,000 a year earlier.
The company said efforts at improving operational efficiency over the past year helped contribute to the higher profits and gross margins.
"These are solid results," said MacMurray Whale, an energy analyst with Sprott Securities, which upgraded Xantrex after its first quarter on signs the Burnaby, B.C.-based company was on the path to recovery after struggling in 2005. "These results support that."
The company's stock closed the day up 22 cents at $8.52 on the Toronto Stock Exchange.
Xantrex's inverters are the brains of renewable energy systems, managing the conversion and flow of electrical power generated by solar and wind systems.
Xantrex chairman Mossadiq Umedaly said rising energy prices, energy security concerns, and environmental issues continue to drive high interest in renewable energy.
This, he said, is leading to increased government support through subsidies.
Ontario is among a growing list of jurisdictions now offering incentives for wind development and increasingly solar.
"France and Greece recently announced incentives to encourage the use of solar energy, further increasing potential demand for our products," Umedaly said in a statement.
"During the second quarter, Xantrex began shipping solar products to Korea, which last year enacted renewable energy incentives."
In conclusion, Umedaly added, "we believe we're on track to realize our outlook of improved growth and profitability for 2006."
Also yesterday San Jose, Calif.-based SunPower Corp., a major player in the solar panel market, announced that it had selected Xantrex's inverters as part of its offering of complete solar system packages for its North American customers.
In the wind segment, which suffered from a major slowdown in 2005, Umedaly said the company could also benefit significantly over the long term from an announcement that BP Plc and Clipper Windpower PLC plan to co-develop five wind farms in the United States totalling more than 2,000 megawatts. Clipper is one of Xantrex's largest customers.
"These guys are really growing, and these deals are solid," said Whale.
Tom Astle, energy analyst with National Bank Financial, called growth in Xantrex's renewable business "impressive." But he warned that other areas need improvement.
This would include the mobile power business for commercial and recreational vehicles and marine craft, which saw revenues fall 12 per cent compared to a year ago.
"Unfortunately, the other businesses aren't performing quite as well," Astle said.
Saturday, July 29, 2006
John Hopkins study finds spiritual value in psilocybin mushrooms
Mystical magic mushroom experience a way to find Jah in nature?
Story from AP / CNN.com
Mystic mushrooms spawn magic event; Findings could lead to treatments for mental health problems such as addiction, depression
NEW YORK CITY -- People who took an illegal drug made from mushrooms reported profound mystical experiences that led to behavior changes lasting for weeks -- all part of an experiment that recalls the psychedelic '60s.
Many of the 36 volunteers rated their reaction to a single dose of the drug, called psilocybin, as one of the most meaningful or spiritually significant experiences of their lives. Some compared it to the birth of a child or the death of a parent.
Such comments "just seemed unbelievable," said Roland Griffiths of the Johns Hopkins University School of Medicine in Baltimore, Maryland, the study's lead author.
But don't try this at home, he warned. "Absolutely don't."
Almost a third of the research participants found the drug experience frightening even in the very controlled setting. That suggests people experimenting with the illicit drug on their own could be harmed, Griffiths said.
Viewed by some as a landmark, the study is one of the few rigorous looks in the past 40 years at a hallucinogen's effects. The researchers suggest the drug someday may help drug addicts kick their habit or aid terminally ill patients struggling with anxiety and depression.
It may also provide a way to study what happens in the brain during intense spiritual experiences, the scientists said.
Funded in part by the federal government, the research was published online Tuesday by the journal Psychopharmacology.
Psilocybin has been used for centuries in religious practices, and its ability to produce a mystical experience is no surprise. But the new work demonstrates it more clearly than before, Griffiths said.
Even two months after taking the drug, pronounced SILL-oh-SY-bin, most of the volunteers said the experience had changed them in beneficial ways, such as making them more compassionate, loving, optimistic and patient. Family members and friends said they noticed a difference, too.
Charles Schuster, a professor of psychiatry and behavioral neuroscience at Wayne State University in Detroit, Michigan, and a former director of the National Institute on Drug Abuse, called the work a landmark.
"I believe this is one of the most rigorously well-controlled studies ever done" to evaluate psilocybin or similar substances for their potential to increase self-awareness and a sense of spirituality, he said. He did not participate in the research.
Psilocybin, like LSD or mescaline, is one of a class of drugs called hallucinogens or psychedelics. While they have been studied by scientists in the past, research was largely shut down after widespread recreational abuse of the drugs during the 1960s, Griffiths said. Some work resumed in the 1990s.
"We've lost 40 years of (potential) research experience with this whole class of compounds," he said. Now, with modern-day scientific methods, "I think it's time to pick up this research field."
The study volunteers had an average age of 46, had never used hallucinogens, and participated to some degree in religious or spiritual activities such as prayer, meditation, discussion groups or religious services. Each tried psilocybin during one visit to the lab and the stimulant methylphenidate (better known as Ritalin) on one or two other visits. Only six of the volunteers knew when they were getting psilocybin.
Each visit lasted eight hours. The volunteers lay on a couch in a living-room-like setting, wearing an eye mask and listening to classical music. They were encouraged to focus their attention inward.
Psilocybin's effects lasted for up to six hours, Griffiths said. Twenty-two of the 36 volunteers reported having a "complete" mystical experience, compared with four of those getting methylphenidate.
That experience included such things as a sense of pure awareness and a merging with ultimate reality, a transcendence of time and space, a feeling of sacredness or awe, and deeply felt positive mood like joy, peace and love. People say "they can't possibly put it into words," Griffiths said.
Two months later, 24 of the participants filled out a questionnaire. Two-thirds called their reaction to psilocybin one of the five top most meaningful experiences of their lives. On another measure, one-third called it the most spiritually significant experience of their lives, with another 40 percent ranking it in the top five.
About 80 percent said that because of the psilocybin experience, they still had a sense of well-being or life satisfaction that was raised either "moderately" or "very much."
Story from AP / CNN.com
Mystic mushrooms spawn magic event; Findings could lead to treatments for mental health problems such as addiction, depression
NEW YORK CITY -- People who took an illegal drug made from mushrooms reported profound mystical experiences that led to behavior changes lasting for weeks -- all part of an experiment that recalls the psychedelic '60s.
Many of the 36 volunteers rated their reaction to a single dose of the drug, called psilocybin, as one of the most meaningful or spiritually significant experiences of their lives. Some compared it to the birth of a child or the death of a parent.
Such comments "just seemed unbelievable," said Roland Griffiths of the Johns Hopkins University School of Medicine in Baltimore, Maryland, the study's lead author.
But don't try this at home, he warned. "Absolutely don't."
Almost a third of the research participants found the drug experience frightening even in the very controlled setting. That suggests people experimenting with the illicit drug on their own could be harmed, Griffiths said.
Viewed by some as a landmark, the study is one of the few rigorous looks in the past 40 years at a hallucinogen's effects. The researchers suggest the drug someday may help drug addicts kick their habit or aid terminally ill patients struggling with anxiety and depression.
It may also provide a way to study what happens in the brain during intense spiritual experiences, the scientists said.
Funded in part by the federal government, the research was published online Tuesday by the journal Psychopharmacology.
Psilocybin has been used for centuries in religious practices, and its ability to produce a mystical experience is no surprise. But the new work demonstrates it more clearly than before, Griffiths said.
Even two months after taking the drug, pronounced SILL-oh-SY-bin, most of the volunteers said the experience had changed them in beneficial ways, such as making them more compassionate, loving, optimistic and patient. Family members and friends said they noticed a difference, too.
Charles Schuster, a professor of psychiatry and behavioral neuroscience at Wayne State University in Detroit, Michigan, and a former director of the National Institute on Drug Abuse, called the work a landmark.
"I believe this is one of the most rigorously well-controlled studies ever done" to evaluate psilocybin or similar substances for their potential to increase self-awareness and a sense of spirituality, he said. He did not participate in the research.
Psilocybin, like LSD or mescaline, is one of a class of drugs called hallucinogens or psychedelics. While they have been studied by scientists in the past, research was largely shut down after widespread recreational abuse of the drugs during the 1960s, Griffiths said. Some work resumed in the 1990s.
"We've lost 40 years of (potential) research experience with this whole class of compounds," he said. Now, with modern-day scientific methods, "I think it's time to pick up this research field."
The study volunteers had an average age of 46, had never used hallucinogens, and participated to some degree in religious or spiritual activities such as prayer, meditation, discussion groups or religious services. Each tried psilocybin during one visit to the lab and the stimulant methylphenidate (better known as Ritalin) on one or two other visits. Only six of the volunteers knew when they were getting psilocybin.
Each visit lasted eight hours. The volunteers lay on a couch in a living-room-like setting, wearing an eye mask and listening to classical music. They were encouraged to focus their attention inward.
Psilocybin's effects lasted for up to six hours, Griffiths said. Twenty-two of the 36 volunteers reported having a "complete" mystical experience, compared with four of those getting methylphenidate.
That experience included such things as a sense of pure awareness and a merging with ultimate reality, a transcendence of time and space, a feeling of sacredness or awe, and deeply felt positive mood like joy, peace and love. People say "they can't possibly put it into words," Griffiths said.
Two months later, 24 of the participants filled out a questionnaire. Two-thirds called their reaction to psilocybin one of the five top most meaningful experiences of their lives. On another measure, one-third called it the most spiritually significant experience of their lives, with another 40 percent ranking it in the top five.
About 80 percent said that because of the psilocybin experience, they still had a sense of well-being or life satisfaction that was raised either "moderately" or "very much."
UK's Gordon Brown has mistress named Gaia
from website of Friends of the Earth, FOE.co.uk
Gordon Brown's climate opportunity - World Bank Spring Meetings
April 2006
UK Chancellor Gordon Brown will be in Washington this week to call on the International Monetary Fund and World Bank to introduce a new US$20 billion World Bank fund to help developing countries invest in alternative energy sources in order to combat climate change. But Friends of the Earth has warned that the World Bank's Spring Meeting still looks set to steer energy policy in the wrong direction.
A new report, presented by the World Bank and IMF last week, to be adopted at the Spring Meetings on April 22 and 23, acknowledges the severe impacts of climate change on developing countries but still puts forward plans to invest in fossil fuel projects.
The Group of Eight (G8) richest nations at their Gleneagles Summit last July invited the World Bank to propose a plan for a sustainable energy future and to accelerate investment in these technologies. Gordon Brown proposed the US$20 billion fund for clean energy in his Budget speech to the Commons on 22 March.
The World Bank's `Clean Energy and Development: Towards An Investment Framework,' report acknowledges that just the cost of adapting to climate change is likely to be between 10 and 40 billion dollars per year. But instead of responding to those needs, the World Bank plans to continue funding substantial amounts of dirty fossil fuel projects. In 2005, only 10 per cent of the Bank's energy financing went to renewable energy or energy efficiency.
Friends of the Earth International's Climate Campaigner Catherine Pearce said:
"The proposals being put forward by the World Bank show a lack of ambition in developing clean energy projects and fail to re-direct financing away from existing fossil fuel sources. Most crucially they will not deliver sustainable energy to the two billion people who currently do not have access to a power supply.
"The World Bank seems to be more interested in the most environmentally and socially damaging projects, such as nuclear, large dams and so-called 'clean coal'. It is widely understood
that these technologies will not help to bring people out of poverty, which is the World Bank's core mission."
She added:
"Gordon Brown and the UK Government need to do more than call for more funding through the G8. The G8 currently releases 45 per cent of global emissions. They are also the main players in the World Bank. It is time they set their own house in order and established a clear plan for reducing emissions in industrialised countries. They could make a significant contribution to the fight against climate change, and must also do more to support the poorest and most vulnerable, who are disproportionately affected by its impacts."
The Bank is proposing to combine efforts under the framework on both alternative energy sources and adaptation to climate change. Rich countries urgently need to step forward to provide resources for sustainable energy services and, separately, to help the most vulnerable communities and countries adapt to climate change. A combination of the two implies that similar funding mechanisms are being considered. For an equitable approach to climate change, Friends of the Earth believes a separate funding system for adaptation would be required.
Two billion people currently have no access to energy services. Friends of the Earth is calling for the Introduction of clean, affordable, decentralised renewable energy services which can help alleviate poverty, reduce regional and local air and water pollution, generate jobs and income and empower local communities.
Funded energy projects should be subject to input and approval by local communities, should be carried out by appropriate institutions that will be responsive to civil society, and should have clear, ambitious commitments with targets and timetables, the organisation said.
Friends of the Earth campaigners from Asia, Africa, Central America and Europe, are in Washington DC April 19-26 to demand that the World Bank and the US Congress respond to the real needs and challenges that climate change poses to the world.
Gordon Brown's climate opportunity - World Bank Spring Meetings
April 2006
UK Chancellor Gordon Brown will be in Washington this week to call on the International Monetary Fund and World Bank to introduce a new US$20 billion World Bank fund to help developing countries invest in alternative energy sources in order to combat climate change. But Friends of the Earth has warned that the World Bank's Spring Meeting still looks set to steer energy policy in the wrong direction.
A new report, presented by the World Bank and IMF last week, to be adopted at the Spring Meetings on April 22 and 23, acknowledges the severe impacts of climate change on developing countries but still puts forward plans to invest in fossil fuel projects.
The Group of Eight (G8) richest nations at their Gleneagles Summit last July invited the World Bank to propose a plan for a sustainable energy future and to accelerate investment in these technologies. Gordon Brown proposed the US$20 billion fund for clean energy in his Budget speech to the Commons on 22 March.
The World Bank's `Clean Energy and Development: Towards An Investment Framework,' report acknowledges that just the cost of adapting to climate change is likely to be between 10 and 40 billion dollars per year. But instead of responding to those needs, the World Bank plans to continue funding substantial amounts of dirty fossil fuel projects. In 2005, only 10 per cent of the Bank's energy financing went to renewable energy or energy efficiency.
Friends of the Earth International's Climate Campaigner Catherine Pearce said:
"The proposals being put forward by the World Bank show a lack of ambition in developing clean energy projects and fail to re-direct financing away from existing fossil fuel sources. Most crucially they will not deliver sustainable energy to the two billion people who currently do not have access to a power supply.
"The World Bank seems to be more interested in the most environmentally and socially damaging projects, such as nuclear, large dams and so-called 'clean coal'. It is widely understood
that these technologies will not help to bring people out of poverty, which is the World Bank's core mission."
She added:
"Gordon Brown and the UK Government need to do more than call for more funding through the G8. The G8 currently releases 45 per cent of global emissions. They are also the main players in the World Bank. It is time they set their own house in order and established a clear plan for reducing emissions in industrialised countries. They could make a significant contribution to the fight against climate change, and must also do more to support the poorest and most vulnerable, who are disproportionately affected by its impacts."
The Bank is proposing to combine efforts under the framework on both alternative energy sources and adaptation to climate change. Rich countries urgently need to step forward to provide resources for sustainable energy services and, separately, to help the most vulnerable communities and countries adapt to climate change. A combination of the two implies that similar funding mechanisms are being considered. For an equitable approach to climate change, Friends of the Earth believes a separate funding system for adaptation would be required.
Two billion people currently have no access to energy services. Friends of the Earth is calling for the Introduction of clean, affordable, decentralised renewable energy services which can help alleviate poverty, reduce regional and local air and water pollution, generate jobs and income and empower local communities.
Funded energy projects should be subject to input and approval by local communities, should be carried out by appropriate institutions that will be responsive to civil society, and should have clear, ambitious commitments with targets and timetables, the organisation said.
Friends of the Earth campaigners from Asia, Africa, Central America and Europe, are in Washington DC April 19-26 to demand that the World Bank and the US Congress respond to the real needs and challenges that climate change poses to the world.
Saturday, July 22, 2006
Norway is setting up a 20 billion Norwegian crowns ($3.24 billion) fund to promote renewable energy
from www.planetark.com
full story at http://www.planetark.com/dailynewsstory.cfm/newsid/36782/newsDate/13-Jun-2006/story.htm
Norway Sets Up $3.2 Billion Clean Energy Fund
OSLO - Norway is setting up a 20 billion Norwegian crowns ($3.24 billion) fund to promote renewable energy such as wind and hydropower while spurring energy savings, the government said on Monday.
It said the cash would help Norway achieve a goal of raising available power by 30 terawatt hours (TWh) by 2016, compared with 2001, from alternative energy sources and by greater efficiency. Its previous goal was a saving of 12 TWh by 2010 versus 2001.
Norway's total power output, mostly from hydropower, is about 120 TWh a year.
"Bioenergy, windpower, hydropower, and energy efficiency will contribute to new possibilities, new jobs and new optimism over the whole country," Oil and Energy Minister Odd Roger Enoksen said in a statement.
The fund would be managed by state energy firm Enova.
Under the scheme, Enova would strengthen infrastructure for district heating, stimulate energy efficiency and renewable energy in households and set up a deposit scheme to encourage scrapping of oil boilers.
Norway needs to promote alternative energy use partly because its emissions of heat-trapping carbon dioxide, mainly from burning oil, were far above target and about 9 percent above 1990 levels in 2005.
Under the UN's Kyoto Protocol on curbing global warming, Norway has to limit any rise in emissions to no more than one percent by 2008-2012 compared to 1990 levels.
That goal is hard to reach because fossil fuel use is rising in Norway, the number three oil exporter behind Saudi Arabia and Russia. Norway generates almost all its energy from hydropower and has few rivers left to dam.
Under the new scheme, about 10 billion crowns would be put into the fund from January 2007 through the government's annual budget, and another 10 billion from January 2009.
full story at http://www.planetark.com/dailynewsstory.cfm/newsid/36782/newsDate/13-Jun-2006/story.htm
Norway Sets Up $3.2 Billion Clean Energy Fund
OSLO - Norway is setting up a 20 billion Norwegian crowns ($3.24 billion) fund to promote renewable energy such as wind and hydropower while spurring energy savings, the government said on Monday.
It said the cash would help Norway achieve a goal of raising available power by 30 terawatt hours (TWh) by 2016, compared with 2001, from alternative energy sources and by greater efficiency. Its previous goal was a saving of 12 TWh by 2010 versus 2001.
Norway's total power output, mostly from hydropower, is about 120 TWh a year.
"Bioenergy, windpower, hydropower, and energy efficiency will contribute to new possibilities, new jobs and new optimism over the whole country," Oil and Energy Minister Odd Roger Enoksen said in a statement.
The fund would be managed by state energy firm Enova.
Under the scheme, Enova would strengthen infrastructure for district heating, stimulate energy efficiency and renewable energy in households and set up a deposit scheme to encourage scrapping of oil boilers.
Norway needs to promote alternative energy use partly because its emissions of heat-trapping carbon dioxide, mainly from burning oil, were far above target and about 9 percent above 1990 levels in 2005.
Under the UN's Kyoto Protocol on curbing global warming, Norway has to limit any rise in emissions to no more than one percent by 2008-2012 compared to 1990 levels.
That goal is hard to reach because fossil fuel use is rising in Norway, the number three oil exporter behind Saudi Arabia and Russia. Norway generates almost all its energy from hydropower and has few rivers left to dam.
Under the new scheme, about 10 billion crowns would be put into the fund from January 2007 through the government's annual budget, and another 10 billion from January 2009.
Wednesday, July 12, 2006
Alternative Energy stocks drop sharply in June
from http://www.nytimes.com/2006/07/09/business/mutfund/09alter.html?_r=1&oref=slogin
By NORM ALSTER
Published: July 9, 2006
AFTER a year of stellar performance, producers of alternative energy — from ethanol to solar and wind power — took a beating in the stock market this spring.
Up more than 80 percent from May 2005 to May 8 this year, the PowerShares WilderHill Clean Energy fund, an exchange-traded fund that tracks the sector, tumbled more than 20 percent by June 30.
The sell-off unnerved the managers of some mutual funds that own alternative energy stocks. David J. Schoenwald, co-manager of the New Alternatives fund with his father, Maurice L. Schoenwald, acknowledged being fearful and uncertain of the causes or likely duration of the stock slide. "I don't know what's going on," he said. For the first six months of this year, the fund was still up 18.9 percent.
At the Winslow Green Growth fund, Matthew W. Patsky, co-manager of the portfolio with Jackson W. Robinson, said high stock prices had been the issue. "There was obviously froth in the market," he said. "You saw excessive valuations in some areas like solar." Winslow Green Growth was up 8.6 percent for the first half of the year.
Despite the spring sell-off, there were some reassuring developments for investors in alternative energy, and they came from what might seem unlikely sources. In May, Chevron announced that it was creating a business unit to research and invest in ethanol and biodiesel fuels.
"We like to form business units around key strategic objectives," said Donald L. Paul, vice president and chief technology officer at Chevron. "We're going to spend a significant amount of money in this area to get going."
In June, BP said it would spend $500 million to create a research center for biofuels. It also said it was forming a biofuels partnership with DuPont that would produce a sugar-based fuel for the British market in 2007. In November 2005, BP announced that it would invest $8 billion over the next decade in wind and solar power and in other technologies that produce electric power with lowered carbon emissions.
Chevron, Mr. Paul said, wants to find its place in the developing supply chain of biofuels, beginning with the sourcing of raw materials and extending to production, distribution and marketing. BP, a spokesman said, wants to address environmental concerns while developing longer-term supply alternatives to petroleum-based fuels.
The fact that major oil companies are scouring the field for investments could help create a floor for alternative energy share prices, said Stuart Bush, an analyst at RBC Capital Markets. For the major companies looking to hedge their bets with biofuels, "it would be easier to buy than to build capacity," Mr. Bush said. For example, Chevron announced in May that it was taking an equity position in Galveston Bay Biodiesel, which is building a plant to turn soybeans into diesel fuel.
Mr. Bush likes the prospects of a broad range of alternative energy stocks. He predicts a 35 percent increase in the next year for the WilderHill Index, a basket of 40 stocks mirrored by the PowerShares E.T.F.
Wind is "the most economically viable" alternative technology, Mr. Bush said. He favors Zoltek, which makes carbon fibers used in wind turbine blades. Blades made of carbon fibers can be longer than steel blades, allowing them to sweep a larger area and generate more electricity.
In solar power, Mr. Bush likes MEMC Electronic Materials, which supplies silicon for building solar cells. Silicon has been in short supply, and MEMC has taken advantage of the situation to lock up customers with long-term contracts at today's high prices, he said.
Though solar, wind and ethanol stocks have moved largely in concert, ethanol has been perhaps the most controversial industry sector. Ethanol is in great demand because of the high price of gasoline and because of a rush to replace MTBE, a gasoline additive intended to cut air pollution but now the subject of several lawsuits that say it contaminates groundwater.
In the United States, ethanol is generally made from corn. Those skeptical of the prospects for ethanol say that only so much farmland can be used to grow corn for fuel and that any rise in corn prices or drop in oil prices would jeopardize the profits of ethanol producers.
Elif Acar, an analyst at Standard & Poor's, said in June that most ethanol companies deserved only B-grade "speculative" ratings because of the up-and-down nature of the business.
"At its best, it could be very high margins," Ms. Acar said. "At its worst, it could be negative margins."
But while the S.& P. analysis focused on corn, Mr. Paul and other long-term ethanol investors are betting that cellulosic ethanol, derived from nonfood plant matter like grasses and farm waste, will one day be cheaper to convert into fuel. Producing cellulosic ethanol could also take far less energy than ethanol made from corn and yield considerably less pollution.
"There's big opportunities potentially in cellulosic," Mr. Paul said. Reflecting that outlook, Chevron announced last month that it would finance cellulosic research for the next five years at the Georgia Institute of Technology.
For all its promise, however, cellulosic ethanol does not offer simple investment choices. There are few publicly traded companies with cellulosic technology. Diversa of San Diego and Novozymes and Danisco of Denmark have reported progress in reducing the cost of enzymatic conversion of plant matter to fuel. Xethanol, in New York, has plans to use waste plant matter to make ethanol. Pacific Ethanol of Fresno, Calif., is one of several companies building corn-processing plants that could also make cellulosic ethanol if it could be produced at a competitive cost. But valuations on these companies are rich by most conventional measures. And because cellulosic technology is still evolving, it is difficult to identify eventual winners.
Finding any ethanol stock that is cheap is not easy, said Tim Guinness, manager of the Guinness Atkinson Alternative Energy fund. But he thinks he has one in Australian Ethanol, which is building production in Australia and the United States and is priced far more reasonably, he says, than American producers.
Investors in alternative technology stocks, Mr. Guinness asserted, must look beyond current market gyrations. "You need to take a medium-term view — at least two to four years," he said. Nobody, after all, can displace petroleum overnight.
By NORM ALSTER
Published: July 9, 2006
AFTER a year of stellar performance, producers of alternative energy — from ethanol to solar and wind power — took a beating in the stock market this spring.
Up more than 80 percent from May 2005 to May 8 this year, the PowerShares WilderHill Clean Energy fund, an exchange-traded fund that tracks the sector, tumbled more than 20 percent by June 30.
The sell-off unnerved the managers of some mutual funds that own alternative energy stocks. David J. Schoenwald, co-manager of the New Alternatives fund with his father, Maurice L. Schoenwald, acknowledged being fearful and uncertain of the causes or likely duration of the stock slide. "I don't know what's going on," he said. For the first six months of this year, the fund was still up 18.9 percent.
At the Winslow Green Growth fund, Matthew W. Patsky, co-manager of the portfolio with Jackson W. Robinson, said high stock prices had been the issue. "There was obviously froth in the market," he said. "You saw excessive valuations in some areas like solar." Winslow Green Growth was up 8.6 percent for the first half of the year.
Despite the spring sell-off, there were some reassuring developments for investors in alternative energy, and they came from what might seem unlikely sources. In May, Chevron announced that it was creating a business unit to research and invest in ethanol and biodiesel fuels.
"We like to form business units around key strategic objectives," said Donald L. Paul, vice president and chief technology officer at Chevron. "We're going to spend a significant amount of money in this area to get going."
In June, BP said it would spend $500 million to create a research center for biofuels. It also said it was forming a biofuels partnership with DuPont that would produce a sugar-based fuel for the British market in 2007. In November 2005, BP announced that it would invest $8 billion over the next decade in wind and solar power and in other technologies that produce electric power with lowered carbon emissions.
Chevron, Mr. Paul said, wants to find its place in the developing supply chain of biofuels, beginning with the sourcing of raw materials and extending to production, distribution and marketing. BP, a spokesman said, wants to address environmental concerns while developing longer-term supply alternatives to petroleum-based fuels.
The fact that major oil companies are scouring the field for investments could help create a floor for alternative energy share prices, said Stuart Bush, an analyst at RBC Capital Markets. For the major companies looking to hedge their bets with biofuels, "it would be easier to buy than to build capacity," Mr. Bush said. For example, Chevron announced in May that it was taking an equity position in Galveston Bay Biodiesel, which is building a plant to turn soybeans into diesel fuel.
Mr. Bush likes the prospects of a broad range of alternative energy stocks. He predicts a 35 percent increase in the next year for the WilderHill Index, a basket of 40 stocks mirrored by the PowerShares E.T.F.
Wind is "the most economically viable" alternative technology, Mr. Bush said. He favors Zoltek, which makes carbon fibers used in wind turbine blades. Blades made of carbon fibers can be longer than steel blades, allowing them to sweep a larger area and generate more electricity.
In solar power, Mr. Bush likes MEMC Electronic Materials, which supplies silicon for building solar cells. Silicon has been in short supply, and MEMC has taken advantage of the situation to lock up customers with long-term contracts at today's high prices, he said.
Though solar, wind and ethanol stocks have moved largely in concert, ethanol has been perhaps the most controversial industry sector. Ethanol is in great demand because of the high price of gasoline and because of a rush to replace MTBE, a gasoline additive intended to cut air pollution but now the subject of several lawsuits that say it contaminates groundwater.
In the United States, ethanol is generally made from corn. Those skeptical of the prospects for ethanol say that only so much farmland can be used to grow corn for fuel and that any rise in corn prices or drop in oil prices would jeopardize the profits of ethanol producers.
Elif Acar, an analyst at Standard & Poor's, said in June that most ethanol companies deserved only B-grade "speculative" ratings because of the up-and-down nature of the business.
"At its best, it could be very high margins," Ms. Acar said. "At its worst, it could be negative margins."
But while the S.& P. analysis focused on corn, Mr. Paul and other long-term ethanol investors are betting that cellulosic ethanol, derived from nonfood plant matter like grasses and farm waste, will one day be cheaper to convert into fuel. Producing cellulosic ethanol could also take far less energy than ethanol made from corn and yield considerably less pollution.
"There's big opportunities potentially in cellulosic," Mr. Paul said. Reflecting that outlook, Chevron announced last month that it would finance cellulosic research for the next five years at the Georgia Institute of Technology.
For all its promise, however, cellulosic ethanol does not offer simple investment choices. There are few publicly traded companies with cellulosic technology. Diversa of San Diego and Novozymes and Danisco of Denmark have reported progress in reducing the cost of enzymatic conversion of plant matter to fuel. Xethanol, in New York, has plans to use waste plant matter to make ethanol. Pacific Ethanol of Fresno, Calif., is one of several companies building corn-processing plants that could also make cellulosic ethanol if it could be produced at a competitive cost. But valuations on these companies are rich by most conventional measures. And because cellulosic technology is still evolving, it is difficult to identify eventual winners.
Finding any ethanol stock that is cheap is not easy, said Tim Guinness, manager of the Guinness Atkinson Alternative Energy fund. But he thinks he has one in Australian Ethanol, which is building production in Australia and the United States and is priced far more reasonably, he says, than American producers.
Investors in alternative technology stocks, Mr. Guinness asserted, must look beyond current market gyrations. "You need to take a medium-term view — at least two to four years," he said. Nobody, after all, can displace petroleum overnight.
Carlyle/Riverstone Renewable Energy Infrastructure Fund invests in Canadian Ethanol Plant
NEW YORK, July 10 (Reuters) - Private equity firm Riverstone Holdings on Monday said it plans to link up with Blackstone Energy Inc. to build a 15 million-gallon-per-year ethanol plant in Ontario.
The investors will convert an existing starch production facility in Collingwood, Ontario, to ethanol production expected to come online in mid-2007 pending provincial and federal approval.
The Carlyle/Riverstone Renewable Energy Infrastructure Fund will buy a 77 percent interest in the plant, known as Collingwood Ethanol GP.
Buyout firm Carlyle Group and Riverstone have teamed up to invest in the renewable energy space, having just raised a $685 million renewable energy fund. The fund will invest in wind, solar, geothermal, biomass, ethanol and biodiesel.
Soaring energy prices have prompted state and federal governments to explore alternative fuel sources such as ethanol -- a renewable, corn-based fuel additive. That in turn has created hot investing opportunities and pushed up stock prices tied to the sector.
"The ethanol production from the Collingwood facility will help meet national and provincial renewable fuel targets, and the corn supply and labor will be drawn from the local community," said Curtis Chandler, executive director of Blackstone Energy. Blackstone Energy is a Canadian energy group that has developed and operated commodity brokerages, natural gas marketing companies and natural gas storage facilities. It is not affiliated with New York private equity firm Blackstone Group.
© Reuters 2006. All Rights Reserved.
The investors will convert an existing starch production facility in Collingwood, Ontario, to ethanol production expected to come online in mid-2007 pending provincial and federal approval.
The Carlyle/Riverstone Renewable Energy Infrastructure Fund will buy a 77 percent interest in the plant, known as Collingwood Ethanol GP.
Buyout firm Carlyle Group and Riverstone have teamed up to invest in the renewable energy space, having just raised a $685 million renewable energy fund. The fund will invest in wind, solar, geothermal, biomass, ethanol and biodiesel.
Soaring energy prices have prompted state and federal governments to explore alternative fuel sources such as ethanol -- a renewable, corn-based fuel additive. That in turn has created hot investing opportunities and pushed up stock prices tied to the sector.
"The ethanol production from the Collingwood facility will help meet national and provincial renewable fuel targets, and the corn supply and labor will be drawn from the local community," said Curtis Chandler, executive director of Blackstone Energy. Blackstone Energy is a Canadian energy group that has developed and operated commodity brokerages, natural gas marketing companies and natural gas storage facilities. It is not affiliated with New York private equity firm Blackstone Group.
© Reuters 2006. All Rights Reserved.
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