Tuesday, December 18, 2007

Iberdrola update, groSolar funding, energy trends, green collar jobs and oil watch

A few items of note today:

EDP to decide on sale of renewables business: the Iberdrola Renovables IPO isn't making much noise (although it is a huge traffic draw to this site for some reason), but Portuguese power company EDP is considering a similar path:

EDP will decide on the sale of 20 to 25 percent of its renewables business in the first quarter of 2008, EDP's chief financial officer Nuno Alves was cited as saying. Alves said in an interview...that some banks had shown interest in carrying out the sale of its renewables business, which includes NEO in Europe and recently acquired U.S. wind-farm company Horizon Energy. He said EDP's renewables business could be worth around 10 billion euros.

EDP plans to invest 7.6 billion euros until 2010 in NEO, which has wind farms in Portugal, Spain, France and Belgium. Portugal's biggest industrial group recently bought U.S. wind-farm company Horizon Energy for $2.2 billion.
We should see continued consolidation in the wind power industry over the next few years, and those companies with the capacity to go public or raise private capital will do so soon. As onshore wind nears approximate grid parity with traditional energy sources, wind finance becomes as much a real estate, scale and turbine sourcing play as anything else. Those companies with available capital and market leadership should be best positioned to take advantage of this maturing sector.

Meanwhile, a quick update on Iberdrola Renovables (IBR) – it saw a second day bump of almost 7%, before falling back and is now trading about 5% higher than its first day opening price.

groSolar Raises $10 million in Growth Equity Financing:
groSolar, a national solar energy firm, announced today that it has secured $10 million in a Series B financing…NGP Energy Technology Partners…led the investment round. Each of the company’s original investors (SJF Ventures, Calvert Social Funds, and Allco Financial Group) also participated in this latest round of funding. groSolar closed its $2.25 million Series A financing in September 2006.
While usually I’d leave this up to various cleantech investment blogs, there are couple things I wanted to note. First, there are several positive signs for groSolar in this news: solid but not excessive second round valuations, follow-on investments from all original investors, quick close for new funding round. Second, groSolar isn’t a pure technology play in the solar space, so much as a distributor and installer, in both the commercial and residential sectors. This is one small example of the growing maturity of the solar industry – that traditional business models (grafted onto high-tech plays) are seeing significant interest, funding and growth.

The World of Energy in 2007: just wanted to highlight this excellent post, which discussed 11 highlights and trends in energy this year. It also serves as a good demonstration of the diversity and breadth of opportunity in this space, but also the challenges in keeping it all straight. To really play in renewable energy, the perceived expertise necessary can sometimes feel overwhelming. Fluency in innumerable unique technologies, mastery of global, regional and domestic policy, familiarity with entrepreneurship, capacity to understand a variety of finance and investment strategies (project finance, VC/PE, debt, public offerings). The list is endless. Or you could just be a blogger and opine ad naseum, no skill set necessary...

Green Collar Jobs Could Fill Many Needs: I came across a similar report a year ago, when I read the Apollo Alliance’s New Energy for America report, detailing how U.S. clean energy investment could lead to 3 million ‘green collar” jobs, especially in inner-city neighborhoods, the manufacturing sector, and rural communities. The new report referenced above came out of the Ella Baker Center, and focuses on the Bay Area in particular, and how green business:
[has the] ability to provide green collar jobs to those lacking high school diplomas or work experience, or who were formerly incarcerated. These jobs -- which are blue collar jobs within the green economy -- can be found in non-profits, social enterprises and the public sector.

Oilwatch Monthly - December 2007:
1) Plateau production - Both the International Energy Agency (IEA) and Energy Information Administration (EIA) figures show that the plateau of global liquids production that began in 2005 recently ended due to a large production increase of 1.4 million b/d in September/October. This production increase has been sustained during October/November.

2) Total liquids - In November world production of total liquids increased by 55,000 barrels per day from October according to the latest figures of the International Energy Agency (IEA). Resulting in total world liquids production of 86.55 million b/d, which is the all time maximum liquids production.

Where this gets interesting is in the actual report:
For the second consecutive month the International Energy Agency (IEA) has published figures showing a new all time high in world liquids production. As oil production increased from 85 million barrels per day in September to 86.5 million barrels per day in November, some breathing space has been created….

This new all time high brings to question whether those who called the peak in conventional crude in at may 2005 have been proven wrong. Called peak because that has so far been the month of all time high conventional crude production at 74.30 million b/d. If proven wrong by reality due to higher production, the case for a nearby peak in all liquids production is much less defensible.
Again, feel free to review the actual report here, for Oil Drum’s detailed monthly analysis of the present state of oil and other global fuels production.

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