10 January 2011
Chinese solar wafer company LDK Solar has grabbed a 70% interest in solar module designer and manufacturer Solar Power, in a $33 million deal, while another solar transaction saw Arizona-based First Solar snap up technology company RayTracker.
LDK’s buy up, announced last Thursday, will give Silicon Valley-based Solar Power a welcome capital injection, priming development of the company’s US project pipeline of large-scale power plants and generation systems.
Solar Power’s assets include the 6MW Aerojet solar installation in California. However, the company has long suffered funding delays and posted a net loss of $9.1 million for the first nine months of 2010.
For LDK, a New York Stock Exchange-listed manufacturer of multi-crystalline solar wafers and polysilicon modules, the deal opens the door to the US solar market.
Under the transaction terms, LDK will acquire components of Solar Power’s manufacturing equipment and will take control of the company’s former module manufacturing facility in Shenzhen, China. Solar Power will retain its in-house project development team.
The acquisition had little impact on the bourse, with stock prices for LDK closing at $10.29, down from an opening price of $10.41, the day the deal was announced. However, LDK shares rose more than 20% to $12.45 today after the company raised its fourth quarter forecast revenue from $710 million-$750 million to $870 million-$910 million.
RayTracker acquisition boosts First Solar shares
In a separate solar deal announced on Friday, Nasdaq-listed First Solar has bolstered its renewables offering with the acquisition of US company RayTracker for an undisclosed sum.
RayTracker’s solar tracking technology is designed to increase the energy yield of photovoltaic installations. The company was spun out of Californian solar product manufacturer Energy Innovations in 2009 and is backed by technology support company Idealab.
News of the transaction helped First Solar stocks rise 2.7% on Friday, reaching an intra-day high of $1.355 on Friday.
Charlotte Dudley
Thursday, 13 January 2011
Venture capitalists close record number of clean technology deals
12 January 2011
Venture capital (VC) firms invested $7.8 billion in clean-tech firms in 2010, up 28% year-on-year, according to figures from the Cleantech Group. The California-based research and advisory firm tracked 715 deals last year, across North America, Europe, China and India, an annual record.
Last year was also the second-highest year in terms of total investment, although it did not match 2008, which saw $8.8 billion invested by VCs.
The Cleantech Group also calculates that the last quarter of 2010 was the most active ever for clean technology company (IPOs). Thirty companies floated in the last three months of the year, raising a total of $8.3 billion. In total, 93 companies listed in 2010, the California-based group said, raising $16.3 billion – with China seeing the majority of activity, accounting for 63 of these IPOs.
Clean-tech analyst Dallas Kachan at Kachan & Co welcomed a drop in the average size of deals, to around $12 million. “Round sizes in clean-tech in the last few quarters have dropped to almost their lowest level in recorded history. And that’s good. More clean-tech companies are now getting capital than in the days of the large, exclusionary government stimulus grants and loans that skewed investment last year towards larger deals,” he said.
Kachan noted that although deal-size has dropped, it still remains higher than the average round-size in the US for other sectors, such as bio-tech ($8.7 million), medical devices ($7 million) and software ($5 million).
Chrysalix the most active clean-tech VC investor of 2010
North American clean-tech companies continued to grab most of the VC cash available, accounting for 68% of the total and raising $5.28 billion – up 45% year-on-year. Better Place, an infrastructure firm serving the electric car market, was the biggest recipient of VC money, raising $350 million in a round led by HSBC and including investors such as Morgan Stanley Asset Management, Lazard Asset Management and VantagePoint Venture Parters.
The most active clean-tech venture investors, according to the Cleantech Group’s preliminary figures, were:
•Chrysalix Energy Ventures (which participated in 16 rounds)
•Draper Fisher Jurvetson (16)
•Carbon Trust Investment Partners (12)
•Element Partners (12)
•Kleiner Perkins Caufield & Byers (12)
Bloomberg New Energy Finance (BNEF) also released numbers for VC investment this week, although the research house tracks global clean energy deals, rather than clean-tech deals. BNEF found VC investment hit $8.4 billion in 2010, a 28% increase on 2009 levels.
Jess McCabe
Venture capital (VC) firms invested $7.8 billion in clean-tech firms in 2010, up 28% year-on-year, according to figures from the Cleantech Group. The California-based research and advisory firm tracked 715 deals last year, across North America, Europe, China and India, an annual record.
Last year was also the second-highest year in terms of total investment, although it did not match 2008, which saw $8.8 billion invested by VCs.
The Cleantech Group also calculates that the last quarter of 2010 was the most active ever for clean technology company (IPOs). Thirty companies floated in the last three months of the year, raising a total of $8.3 billion. In total, 93 companies listed in 2010, the California-based group said, raising $16.3 billion – with China seeing the majority of activity, accounting for 63 of these IPOs.
Clean-tech analyst Dallas Kachan at Kachan & Co welcomed a drop in the average size of deals, to around $12 million. “Round sizes in clean-tech in the last few quarters have dropped to almost their lowest level in recorded history. And that’s good. More clean-tech companies are now getting capital than in the days of the large, exclusionary government stimulus grants and loans that skewed investment last year towards larger deals,” he said.
Kachan noted that although deal-size has dropped, it still remains higher than the average round-size in the US for other sectors, such as bio-tech ($8.7 million), medical devices ($7 million) and software ($5 million).
Chrysalix the most active clean-tech VC investor of 2010
North American clean-tech companies continued to grab most of the VC cash available, accounting for 68% of the total and raising $5.28 billion – up 45% year-on-year. Better Place, an infrastructure firm serving the electric car market, was the biggest recipient of VC money, raising $350 million in a round led by HSBC and including investors such as Morgan Stanley Asset Management, Lazard Asset Management and VantagePoint Venture Parters.
The most active clean-tech venture investors, according to the Cleantech Group’s preliminary figures, were:
•Chrysalix Energy Ventures (which participated in 16 rounds)
•Draper Fisher Jurvetson (16)
•Carbon Trust Investment Partners (12)
•Element Partners (12)
•Kleiner Perkins Caufield & Byers (12)
Bloomberg New Energy Finance (BNEF) also released numbers for VC investment this week, although the research house tracks global clean energy deals, rather than clean-tech deals. BNEF found VC investment hit $8.4 billion in 2010, a 28% increase on 2009 levels.
Jess McCabe
Impax assets rise 44%, portfolios defy clean-tech stock gloom
13 January 2011
Impax Asset Management reported a 44% rise in its assets under management last year to £1.8 billion ($2.8 billion), while its portfolios defied the gloom that afflicted indexes tracking clean technology and clean energy stocks. Since the end of the year, Impax’s assets have risen again to £2.3 billion.
Investors in Impax’s Environmental Specialists strategy saw a rise of 12.0% over the year, while the Environmental Leaders strategy posted a 15.1% rise. The benchmark MSCI World index rose 15.3% in 2010.
This happened against the backdrop of a sharp fall in the broader listed clean-tech sector: the WilderHill New Energy Global Innovation Index, for example, was down 14.6% last year, underperforming the S&P 500 by more than 20%.
“We were underweight in renewables and were overweight in energy efficiency,” a strategy which paid off for the asset manager, explained Iain Simm, chief executive of Impax.
The London-based asset manager reported a 48% increase in revenues in 2010, to £15.3 million. Its pre-tax profit rose to £5.2 million, from £2.5 million in 2009, boosted by the redemption of a £1 million loan note related to the firm’s exit from a legacy oil business in 2004.
Keith Falconer, chairman of Impax, said: “The backdrop to environmental investing has continued to strengthen over the past 12 months as governments around the world have declared ambitious policies to reduce pollution, improve energy security and stimulate the growth of domestic clean technology sectors.
“Evidence continues to build that the environmental sector is growing more rapidly than the overall economy, and Impax is ideally positioned to build its base of institutional clients who are interested in allocating capital to this area.”
Jess McCabe
Impax Asset Management reported a 44% rise in its assets under management last year to £1.8 billion ($2.8 billion), while its portfolios defied the gloom that afflicted indexes tracking clean technology and clean energy stocks. Since the end of the year, Impax’s assets have risen again to £2.3 billion.
Investors in Impax’s Environmental Specialists strategy saw a rise of 12.0% over the year, while the Environmental Leaders strategy posted a 15.1% rise. The benchmark MSCI World index rose 15.3% in 2010.
This happened against the backdrop of a sharp fall in the broader listed clean-tech sector: the WilderHill New Energy Global Innovation Index, for example, was down 14.6% last year, underperforming the S&P 500 by more than 20%.
“We were underweight in renewables and were overweight in energy efficiency,” a strategy which paid off for the asset manager, explained Iain Simm, chief executive of Impax.
The London-based asset manager reported a 48% increase in revenues in 2010, to £15.3 million. Its pre-tax profit rose to £5.2 million, from £2.5 million in 2009, boosted by the redemption of a £1 million loan note related to the firm’s exit from a legacy oil business in 2004.
Keith Falconer, chairman of Impax, said: “The backdrop to environmental investing has continued to strengthen over the past 12 months as governments around the world have declared ambitious policies to reduce pollution, improve energy security and stimulate the growth of domestic clean technology sectors.
“Evidence continues to build that the environmental sector is growing more rapidly than the overall economy, and Impax is ideally positioned to build its base of institutional clients who are interested in allocating capital to this area.”
Jess McCabe
Duke and Progress merger to ease financing for replacing coal
13 January 2011
The merger of Duke Energy and Progress Energy will create the largest utility in the US, a super-utility that will be in a better position to finance the replacement of its ageing coal fleet than the companies could separately.
The combined company, to be named Duke Energy, will have an enterprise value of about $65 billion and a $37 billion market capitalisation. Under the merger agreement, Progress Energy’s shareholders will receive 2.6125 shares of Duke Energy common stock in exchange for each Progress share, for a value of $46.48 per share, or $13.7 billion in total equity value based on Duke Energy’s closing share price on 7 January. Duke Energy also will assume about $12.2 billion in Progress Energy net debt.
The proposed merger presents opportunities for synergies, including the ability to operate under a single open access transmission tariff, which reduces transmission costs for inter-utility transactions, said William Booth, a partner with law firm SNR Denton who advises electric utility companies. It would also likely improve the ability of the combined company to finance projects, because of its huge rate base and an improved debt rating, Booth said, “which makes the cost of borrowing money less expensive".
The domestic generation capacity of the combined company would be about 57GW, with 42% from coal-fired units, 35% fuelled by gas and oil, 16% nuclear power and 7% from wind and hydropower resources. But both companies are pursuing significant fleet modernisation strategies, retiring about 3400MW of older coal-fired units and replacing them with natural gas facilities or highly-efficient coal plants.
Due to these modernisation efforts, the combined company is “well positioned” to meet the new hazardous air pollutants MACT (HAPS MACT) rule to be unveiled by the Environmental Protection Agency this year, said Bill Johnson, chairman, president and chief executive officer of Progress Energy, who will lead the new company. “We’re further down the road of compliance than many other companies with large coal fleets,” he said.
But significant capital investments and additional plant closures could be required as the combined company will still own 3500MW of older coal facilities once the merger is complete, Johnson noted, and the combination of the two companies eases the financing of more efficient power projects and smart grid infrastructure.
“The cost of financing will be less because generally we can get more favourable loan rates,” said Duke Energy spokesman Dave Scanzoni.
The boards of directors of both companies unanimously approved the transaction, but it will take about a year to secure all mandatory state and federal regulatory approvals, including a federal review for antitrust implications. The companies must seek approval from the Federal Energy Regulatory Commission (FERC), the Nuclear Regulatory Commission, the North Carolina Utilities Commission and the South Carolina Public Service Commission.
"The combined utilities will need to pay careful attention to state regulators, who will have to approve the merger and who will be trying to ensure that anticipated savings from the tie-up will be shared generously with ratepayers in each jurisdiction," said Clinton Vince, chairman of the energy, transport and infrastructure practice at SNR Denton.
Meanwhile, FERC will “no doubt take a close look at combined market power issues regarding the dominant position the combined utilities will present, especially in the Carolinas and Central region”, he said, but added: "I expect that FERC, overall, will look favourably on the merger."
Gloria Gonzalez
The merger of Duke Energy and Progress Energy will create the largest utility in the US, a super-utility that will be in a better position to finance the replacement of its ageing coal fleet than the companies could separately.
The combined company, to be named Duke Energy, will have an enterprise value of about $65 billion and a $37 billion market capitalisation. Under the merger agreement, Progress Energy’s shareholders will receive 2.6125 shares of Duke Energy common stock in exchange for each Progress share, for a value of $46.48 per share, or $13.7 billion in total equity value based on Duke Energy’s closing share price on 7 January. Duke Energy also will assume about $12.2 billion in Progress Energy net debt.
The proposed merger presents opportunities for synergies, including the ability to operate under a single open access transmission tariff, which reduces transmission costs for inter-utility transactions, said William Booth, a partner with law firm SNR Denton who advises electric utility companies. It would also likely improve the ability of the combined company to finance projects, because of its huge rate base and an improved debt rating, Booth said, “which makes the cost of borrowing money less expensive".
The domestic generation capacity of the combined company would be about 57GW, with 42% from coal-fired units, 35% fuelled by gas and oil, 16% nuclear power and 7% from wind and hydropower resources. But both companies are pursuing significant fleet modernisation strategies, retiring about 3400MW of older coal-fired units and replacing them with natural gas facilities or highly-efficient coal plants.
Due to these modernisation efforts, the combined company is “well positioned” to meet the new hazardous air pollutants MACT (HAPS MACT) rule to be unveiled by the Environmental Protection Agency this year, said Bill Johnson, chairman, president and chief executive officer of Progress Energy, who will lead the new company. “We’re further down the road of compliance than many other companies with large coal fleets,” he said.
But significant capital investments and additional plant closures could be required as the combined company will still own 3500MW of older coal facilities once the merger is complete, Johnson noted, and the combination of the two companies eases the financing of more efficient power projects and smart grid infrastructure.
“The cost of financing will be less because generally we can get more favourable loan rates,” said Duke Energy spokesman Dave Scanzoni.
The boards of directors of both companies unanimously approved the transaction, but it will take about a year to secure all mandatory state and federal regulatory approvals, including a federal review for antitrust implications. The companies must seek approval from the Federal Energy Regulatory Commission (FERC), the Nuclear Regulatory Commission, the North Carolina Utilities Commission and the South Carolina Public Service Commission.
"The combined utilities will need to pay careful attention to state regulators, who will have to approve the merger and who will be trying to ensure that anticipated savings from the tie-up will be shared generously with ratepayers in each jurisdiction," said Clinton Vince, chairman of the energy, transport and infrastructure practice at SNR Denton.
Meanwhile, FERC will “no doubt take a close look at combined market power issues regarding the dominant position the combined utilities will present, especially in the Carolinas and Central region”, he said, but added: "I expect that FERC, overall, will look favourably on the merger."
Gloria Gonzalez
Clean energy sees record $243bn investment in 2010
12 January 2011
Global investment in clean energy reached a record of $243 billion in 2010, a 30% increase on 2009 levels, according to research house Bloomberg New Energy Finance (BNEF).
“2011 will have to be a very strong year to beat 2010. At this stage, the signs are encouraging,” said Michael Liebreich, chief executive of London-based BNEF, citing the likelihood that costs will come down for solar panels and wind turbines, and the increasing availability of private sector debt and equity finance.
“This is a spectacular result, beating previous record investment levels by a clear margin of more than $50 billion,” he added. “We have been saying for some time that the world needs to reach a figure of $500 billion per annum investment in clean energy if we are to see carbon emissions peak by 2020. What we are seeing in these figures for the first time is that we are half-way there.”
China attracts $51bn clean energy investment
China led the way in 2010, with a 30% increase from 2009 in investment in clean energy assets, listed equity, private equity and R&D, to $51.1 billion – the largest figure for any country, BNEF said.
A surge in investment in smaller-scale renewable power, or ‘distributed generation’, projects also contributed to the record year, with a 91% increase in investment to $59.6 billion.
The solar sector saw a 49% increase in investment to $89.3 billion, largely driven by this rush into small-scale projects, particularly in Germany, the US, the Czech Republic and Italy.
Global wind investment grew 31% to $96 billion and BNEF noted that investment in China and large offshore wind farms in Europe accounted for 38% of the total investment in 2010.
Clean energy investment in public markets up, despite share prices
Growth in investment was not reflected in the performance of publicly listed clean energy stocks, which BNEF described as “lacklustre”. The WilderHill New Energy Global Innovation Index (NEX), tracking 100 listed global clean energy companies, was down 14.6% last year, underperforming the S&P 500 by more than 20%. Meanwhile, Bank of America Merrill Lynch’s global clean-tech index dropped 17% during 2010, underperforming the S&P 500 by 30 percentage points.
This did not deter a bounce-back in levels of investment in listed clean energy companies, however, with fund raising by listed companies up 18% to $17.4 billion, according to BNEF. Enel Green Power’s initial public offering in November raised $3.5 billion, and was the biggest deal of the year, according to BNEF, followed by the October listing of Xinjiang Goldwind Science & Technology in Hong Kong, which raised about $1.1 billion.
Spending on R&D by governments and companies is also recovering from the recessionary budget cuts, BNEF said, reaching $35.5 billion, compared to around $28.6 billion in 2009.
Jess McCabe
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