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Double-sided Story: Wind Power IPOs in China

Hans Chen
by | July 6th 2011
Posted in Asia, Cleantech Investment Insight, Wind
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On June 10th, 2011, Huaneng Renewable Energy Holding, the renewable energy (predominately wind energy) subsidiary of state-owned power company China Huaneng Group, raised HK$6.23 billion (~$800 million) through its second attempt at an IPO on Hong Kong Stock Exchange.

It would turn out to be the largest cleantech IPO globally in 2Q 2011. After Sinovel Wind Group’s $1.4 billion IPO in 1Q 2011, it’s likely that we will get used to at least one gigantic IPO in China every quarter these days.

It’s already the third IPO on the China/Hong Kong stock markets for a wind energy subsidiary of a state-owned power company. Of the five major Chinese state-owned power companies, Guodian, Datang and Huaneng have already had their wind energy subsidiaries making public market debuts. The remaining two, Huadian and China Power Investment, both already established renewable energy subsidiaries.

The story here seems to be: Wind energy in China was boosted by lucrative subsidies. Rich power companies invested billions of RMB to establish renewable business. These businesses, aided by huge financial support from parent companies, are able to develop rapidly and go public in a relatively short amount of time, bringing even more capital.

Stock …

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Solar in China, Version 2.0

Hans Chen
by | June 21st 2011
Posted in Cleantech Investment Insight, Solar
Tags:

The Chinese Government has amended the solar portion of its recently released 12th Five-year Plan. The new plan suggests that by 2015, total solar capacity within the country will reach 10,000 megawatts, doubling from the original plan of 5,000 megawatts.

Among the 10,000 megawatts, about 6,500 will come from large utility-scale solar power plants in provinces and regions such as Qinghai, Xinjiang, Gansu, Inner Mongolia, Ningxia and Shanxi, all of which are inland, less-developed provinces. Around 3,500 megawatts will be in the form of smaller-scale projects spreading throughout the mid-eastern provinces and regions, where factories need large amount of electricity to support the country’s gigantic manufacturing industry. The final 500 megawatts will be off-grid solar systems aiming to solve the issue of power shortage in countryside and the least developed regions.

Taken into consideration that the total solar capacity in China is merely 768 megawatts at this moment, this amended plan sounds quite ambitious. But let’s not forget that China owns a total solar cell production capacity of 8,000 megawatts, good for 60% of the global capacity. The problem is just that 95% of those cells were exported. Apparently , solar cells and modules will likely experience the process …

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The case against EVs in China

Stephen Marcus
by | May 31st 2011
Posted in Asia, Transportation
Tags: , , , , ,

As an analyst following the day to day happenings in green transportation, I often feel that the industry blindly accepts that the majority of the future economic opportunity for EVs is in China. Many articles often rehash the usual drivers of near double digit GDP growth, powerful government edicts, and poor urban air quality to support their statements. It certainly makes a strong case.

However, whilst the potential market for EVs in China is obviously HUGE, it is important to dig deeper in order to specifically assess the suitability of EVs as a solution to Chinese consumers rather than get overly excited every time the “C-word” is dropped into the equation. What will make Chinese buy electric vehicles over traditional ICE vehicles? Simply saying the economy is growing fast and air quality is poor, in my book, is not enough.

When taken from this standpoint, the opportunity for EVs in China looks less rosy for at least three reasons:

  • Price Sensitive Consumers: It is important to recognize that EVs will, at least for a number of years, command a significant ($10-15k) price premium over traditional ICE vehicles. And even though China’s economy is growing fast, the lion’s share of car

    • …

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Three Gorges Dam: China’s Dilemma

Hans Chen
by | May 25th 2011
Posted in Asia, Marine Energy, Water
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Think the Chinese Communist Party never admits a mistake? Think again.

The rare occurrence happened earlier this week, when China’s State Council, the country’s Cabinet, said in an official statement that while the Three Gorges Dam “provides huge comprehensive benefits, urgent problems must be resolved regarding the smooth relocation of residents, ecological protection and geological disaster prevention”. This was the first ever official acknowledgement of the dam’s negative impact.

Some background information: Three Gorges Dam is the world’s largest capacity hydroelectric dam (total generating capacity of 18,200 MW) located in the mid stream of Yangtze River, the longest river in Asia. Also, it is probably the most controversial water project in the history of mankind, as political, humanitarian and environmental issues were brought up constantly by the opposition.

One would argue that such gigantic hydro power project is not really “clean energy” because the construction itself often has a negative impact on the environment, not to mention the CO2 emission just to produce all the concrete needed. That is a valid argument, of course. But when a country with 1.3 billion people generates 75% of its electricity via coal-fired thermal power, hydroelectric power looks pretty clean.

Many people …

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Small step for Bridgelux, giant leap for US LED industry?

Emma Ritch
by | October 1st 2010
Posted in Energy Efficiency, North America
Tags: , , , , , , , ,

Livermore, Calif.-based lighting startup Bridgelux opened its U.S. factory last week, emphasizing the potential that still exists for LED developers in the United States to be competitive with China.

The key word? Potential. Only 20% of the U.S. factory is dedicated to serving U.S. customer demand, COO Karl Chicca told me. The remainder is focused on R&D and trials of LED materials, chips and packages that can produce brighter, more compact and lower-cost lights.

Chicca said the goal is to increase production at the factory to meet domestic demand…if it comes. Otherwise Bridgelux will use Livermore for R&D and manufacturing its most proprietary technology, while using partners in Asia for the bulk of production. So much for the good news that Bridgelux’s factory is the first new fab to open in 25 years in the San Francisco Bay Area, right?

The plant has brought has 170 employees and a $3.6 million-a-month payroll to Livermore, with plans to add 100 staff members in the next year. But Bridgelux CEO Bill Watkins said Bridgelux could have a significantly larger impact on the community, given the right government policy.

“It’s more important than jobs, it’s about building an industry, people, ” Watkins said.…

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Cleantech Focus Boston: Investing in the Opportunity

Dave Ewart
by | June 13th 2010
Posted in Cleantech Events
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To borrow a quote from Woody Allen, “80% of success is showing up”. If you are considering investing in the China or India cleantech markets or seeking exposure to clean technology analysts, investors and ideas, attending the recent cleantech focus event in Boston, sure felt like Woody Allen was right. Attending an event gives you insight that even today’s always on technology and media can’t replicate, and that equates to success that can be achieved by personally investing in the opportunity and just showing up.

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