Renewable Energy:
"It's like the Oklahoma Land Rush . . . stake your claim!"
written by George St. Onge

Solar & Wind Energy’s Growing Power Boosts
Economy, Environment and Energy Security

Associates of the Biz-Ed Guide & Ecological Systems renewable energy installation team recently attended the
WINDPOWER 2006 Conference & Exhibition in Pittsburgh, PA and a
Finance Forum for Renewable Energy near Wall Street in New York City.

These are boom times for the renewable energy industry, with exponential growth possible for years to come. The market capitalization of the top five renewable energy stocks went from $3.5 billion to $23 billion in the 12 months ending with the high in May 2006. After a pullback to work off the overbought condition, the next leg up in renewable energy stocks could be interesting.

Billions of dollars are now being deployed into the future of Energy. CALPERS, the California state retirement fund is spreading $200 million among Venture Capital funds, getting their feet wet in the renewable energy field. The VC’s are scouring the horizon, searching for the next great idea. One VC made 36 investments after reviewing 3600 proposals. These investments show evidence of a growing industry. With investment comes new factories and then reduction in costs. As solar PV becomes more mainstream, with new advances and technologies being refined every year, the prices can begin to come down.

Germany, Spain, the UK, China and Japan are driving solar/renewable demand overseas, with California and New Jersey leading in the USA. The CEO of Sunpower, a growing photovoltaic manufacturer, forecasts the price of solar PV will be cut in half five years from now.

The Wind Power 2006 Expo
The wind generating systems featured at The WINDPOWER 2006 conference & exhibition in Pittsburgh are examples of some of these advances. On display were giant 2.5 MW Clipper turbine machine heads with gear boxes and small 10 kw turbines for residential wind or farm installations, along with a 1.5 kw “silent” turbine for installation over the roof.

In 2005, wind turbines generating 2,400 MW were installed. Forecasts predicted a 25% growth rate for 2006, with 3,000 MW of new installations. Industry participants are hoping to persuade Congress to extend the production tax credit (PTC) after 2007, a popular federal incentive that rewards wind plant productivity and other renewable energy technologies, thus benefiting consumers and the economy. The President stated this year that “it’s possible we could generate up to 20% of our electricity needs through wind.” Factors such as global warming, reducing pollution, clean air, energy security, new jobs in a growth industry and revitalizing farms and rural communities in the vast American heartland where the wind energy potential is enormous, all point to tremendous growth for renewable energy now and in the future.

Companies from around the world were in attendance: General Electric, Clipper, Vestas, Caterpillar, Shell, Johnson Controls, Chevron, John Deere, Owens Corning, Entergy, FPL, Lubrizol, Mitsubishi, US Steel, Oregon Steel, Saint-Gobain, Hitachi, Rockwell, Siemens, Gamesa, and Dow Chemical were among the familiar names. Numerous small manufacturers of metal gears, cables, bolts, towers, and cranes were there. Germany, Spain, the UK, Ireland, Finland, Korea, China and Japan were also represented.

The time has come for solar, wind and other renewable energy technologies.
Financial State of the Renewable Energy Industry: Now Experiencing
Explosive Growth

Over 600 top renewable energy CEOs, investors and developers met at the Renewable Energy Finance Forum on Wall Street last spring to discuss the financing of windpower, solar energy and biofuels. The industry is predicted to have accelerated growth for three decades. Solar PV is a booming high tech industry. Windpower is a global market surging ahead. Biofuels are taking off this year with rapid expansion to build the facilities.

The two day conference on Wall Street covered trends in financing solar, wind and biofuels.

Alexander Karsner, US Department of Energy’s Assistant Secretary of Energy Efficiency and Renewable Energy, opened the event stating the federal government has not done well at the task of putting renewable energy technologies into use in our country. "I have come into government from the private sector to build a stronger relationship between the DOE and the private sector," he promised.

Also at the conference was Governor Edward G. Rendell of Pennsylvania who keynoted, "While there is a definite lack of leadership on energy and the environment at the federal level, I am seeing more and more governors defining smart strategies for their states, and working together on regional plans.” He called on the Federal government for better leadership, saying, "This is not just a nice thing to do, it is imperative, it is central and it is urgent."

Erik Thorsen, President and CEO, Renewable Energy Corporation, also shared news at the event. He sees good news for the future of solar, and reported their company had completed its IPO successfully, raising over $1 Billion in an offering that was 22 times oversubscribed. His company has an "upstream" strategy that proves to be timely considering the recent and ongoing shortage of raw material silicon. "In the next several years, the cost of solar can be half of what it is today," stated Thorsen.

"While biodiesel costs more today than petroleum-based diesel, this has the ability to change with advanced technology, volume production and incentives," said Martin Tobias, CEO & Chairman of Imperium Renewables. He went on to describe Imperium's strategy for developing a biodiesel production facility and business, indicating that the “potential was enormous."

Other sectors of the financial industry are seeing the possibilities in investing in renewables. "There are a range of capital markets open for renewable energy projects, and the project finance markets have never been more supportive," said John Anderson, head of Power Finance, John Hancock Financial Services.

Bruce Usher, CEO, EcoSecurities added, "The climate change sector is well-positioned for the IPO market, but investors are cautious on valuation analysis in this sector."

Overall, many in the renewable finance community agreed with Dr. Shi Zhengrong, Founder & CEO of the Chinese solar company Suntech, who stated, "The industry will advance in efficiency and continue down the cost curve in the upcoming years. The present growth, which has come on rapidly, indicates the move towards renewables has finally begun. Consequently, the role of Wall Street has never been more important and many anticipate the advances leading up to next June's REFF-Wall Street 2007."

REFF-Wall Street 2006 was supported by the American Wind Energy Association (AWEA), Biomass Coordinating Council (BCC), National Hydropower Association (NHA), Renewable Fuels Association (RFA), Solar Energy Industries Association (SEIA), US Energy Association and American Council On Renewable Energy (ACORE), a membership nonprofit organization headquartered in Washington, DC.

ACORE is dedicated to bringing renewable energy into the mainstream US economy and lifestyle through information programs, and serves as a forum through which parties work together on common interests.

George St.Onge is a commodities trader and also freelances as a finance writer for the biz.ed Guide. He can be reached at geosaint@yahoo.com.

For information about Renewable Energy Finance Forum Wall Street 2007 see www.reff-wallstreet.com

Other resources: www.awea.org and www.acore.org