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CCBJ News Update
May 11, 2012
U.S. DOL to aid SolarWorld workers
AES to sell energy assets in China
$300 million in new financing for residential solar power
CCS funding stalls in 2011
First Solar announces $449 million Q1 loss
Costa Rica obtains financing for hydroelectric project
Coulomb raises $47.5 million in series D financing
Gamesa freezes work on Virginia offshore wind project
Schneider Electric acquires U.K. energy procurement firm
Solazyme to supply Dow with bio-based products
Juhl Wind acquires Power Engineers Collaborative
K Road acquires 25 MW solar farm
U.S. DOL to aid SolarWorld workers
Based on a finding that Chinese imports of solar panels and other solar power components led to the shutdown of SolarWorld Industries America Inc.’s 35-year-old solar-panel production plant in Camarillo, California, the U.S. Department of Labor (DOL) has determined that SolarWorld manufacturing employees laid off as a result of that shutdown will be eligible for federal trade-adjustment assistance, including grants for education and retraining. SolarWorld had invested tens of millions of dollars automating the Camarillo plant after purchasing it in 2006. The company determined in September 2011, however, that it needed to consolidate its U.S. manufacturing at its plant in Hillsboro, Oregon, in response to what the company felt was the Chinese government’s illegally subsidized dumping of solar products on the U.S. market. “We welcome the federal help that might ease the plight of our former factory workers in Camarillo,” said Gordon Brinser, president of SolarWorld Industries America. “How many more U.S. manufacturing jobs must the United States lose in this most promising renewable-energy industry, which Americans pioneered, before adequate remedies are put in place to offset the illegal practices of Big China Solar?”
AES to sell energy assets in China
As part of a strategy to exit markets in which it does not have a competitive advantage, the AES Corp. (Arlington, VA) has signed a pair of agreements to sell a substantial majority of its business interests in China, including its coal, hydropower, and wind assets, for a total of $134 million. On May 4, AES agreed to sell its 25% equity interest in the 2,100 megawatt (MW) coal-fired Yangcheng plant and its 49% equity interest in the 248 MW China Wind joint venture to Sembcorp Utilities for $86 million. Also on May 4, AES signed an agreement to sell its 49% equity interest in Jianghe Rural Electrification Development Company Ltd. (JHRH) to its joint-venture partner, China Three Gorges New Energy Corp., for $48 million. JHRH includes seven small hydroelectric plants, one wind farm, and one co-generation plant with a total gross capacity of 379 MW. Since September 2011, the Company has announced eight asset-sale transactions totaling $890 million.
$300 million in new financing for residential solar power
A subsidiary of investment bank Morgan Stanley (New York, NY) is teaming with solar power developer Main Street Power Company Inc. (Boulder, CO) and Clean Power Finance (San Francisco, CA) to establish MySolar, a program formed to provide $300 million in financing for residential solar power leases in Arizona and California. Zions Energy Link, a partner in multi-bank holding company Zions Bancorporation (Salt Lake City, UT), will be the first in a syndicate of banks that will provide debt financing for MySolar. Under the program, Main Street Power will own the rooftop solar systems and will sell surplus power to local utilities. “The MySolar program will be the largest residential solar investment facility in the nation and can help save consumers millions of dollars in electricity payments, create thousands of solar jobs, and further the easy adoption of solar for thousands of homeowners around the country,” said Jonathan Postal, Main Street Power senior vice president.
CCS funding stalls in 2011
The slow development of an international regulatory framework and the requirement for a scale of investment that is apparently beyond current means have put the brakes on growth in global funding for the development of carbon capture and storage (CCS) technology, according to a recent report by the Worldwatch Institute (Washington, DC). The report said that global CCS funding totaled $23.5 billion in 2011, unchanged from the previous year, and that while 75 large-scale CCS projects are in various stages of development in 17 countries, only eight are operational—a figure that hasn’t changed since 2009. “Although CCS technology has the potential to significantly reduce carbon dioxide emissions----particularly when used in greenhouse gas-intensive coal plants----developing the CCS sector to the point that it can make a serious contribution to emissions reduction will require large-scale investment,” said Matthew Lucky, sustainable energy fellow at Worldwatch and the report’s author. “Capacity will have to be increased several times over before CCS can begin to make a dent in global emissions.” Citing International Energy Agency data, the report concluded that an additional $2.5 trillion to $3 trillion will need to be invested in CCS between 2010 and 2050 in order to cut greenhouse gas (GHG) emissions in half by mid-century.
For a comprehensive global overview of investment in CCS, see CCBJ's Future of Fossil Fuels edition.
First Solar announces $449 million Q1 loss
Plunging prices for solar panels and a restructuring initiative that’s expected to result in the elimination of 30% of the company’s work force are the principal factors behind losses of $449 million reported by First Solar, Inc. (Tempe, AZ) for the first quarter of 2012. First Solar announced on May 3 that it generated net sales of $497 million for the quarter, down substantially from $660 million in sales generated during the fourth quarter of 2011 and $70 million less than sales recorded for the first quarter of 2011. Once the largest solar panel maker in the world, First Solar’s cost advantage over competitors has disappeared and its stock price has plummeted to less than $20 per share after reaching $140 per share one year ago. “First Solar’s performance in the quarter was impacted by an aggressive competitive environment resulting from persistent supply-demand imbalances in the market, as well as restructuring costs that will improve our operating efficiency and help position us for the future,” said Mike Ahearn, company chairman. Ahearn has stepped down as interim CEO, a position that will be assumed by James Hughes, First Solar’s chief commercial officer. First Solar is closing a factory in Germany and idling a portion of its production capacity in Malaysia, moves that will result in the elimination of about 2,000 jobs.
Costa Rica obtains financing for hydroelectric project
The Inter-American Development Bank has approved $670 million U.S. in loans to finance the construction of the Reventazón Hydroelectric Dam, a project that is reportedly the most complex hydroelectric power project ever to be built in Costa Rica. The 305.5 MW hydroelectric dam will be located near the Caribbean slope town of Siquirres and will cost an estimated $1.1 billion U.S. to build. The dam will provide energy for approximately 525,000 families and is scheduled to begin generating power in 2016. Costa Rica derives approximately 90% of its electricity from renewable resources, and most of that is hydroelectric power. The nation is seeking to raise the contribution of renewables to 95% of all electricity consumed by 2014 and to 100% by 2021, when it hopes to be the world’s first carbon-neutral country.
Coulomb raises $47.5 million in series D financing
Moving to accelerate the deployment of its electric vehicle (EV) charging station network in the United States, Coulomb Technologies, Inc. (Campbell, CA) announced that it has raised $47.5 million in Series D financing from new and existing investors. Braemar Energy Ventures and Kleiner Perkins Caufield & Byers led the financing and were joined by Toyota Tsusho Corp. and existing investors Rho Ventures, Voyager Capital, Siemens Venture Capital GmbH, Harbor Pacific Capital Partners, and Hartford Ventures. “Our new investors bring a wealth of industry acumen and expertise in driving commercial scale around innovative technologies,” said Pat Romano, Coulomb’s president and CEO. “These funds enable us to provide cloud-based solutions to cities, retailers, employers, parking operators, and property managers that will drive the adoption of clean transportation.”
Gamesa freezes work on Virginia offshore wind project
Citing the uncertainty surrounding the extension of the U.S. production tax credit (PTC) for wind energy and the lack of progress in establishing the necessary grid infrastructure for offshore wind power, Spanish turbine maker Gamesa Technology Corp. and Newport News Shipbuilding have reached an agreement to suspend the development of an offshore turbine prototype off the Virginia coast. The two entities said that they will wind down operations at their joint Offshore Wind Technology Center in Chesapeake, Virginia, by the end of 2012 as they come to the end of their critical design review (CDR). The Virginia Marine Resources Commission (VMRC) had approved the installation of the prototype near Cape Charles, Virginia, in March. Gamesa said that it will build the prototype, a 479-foot, 5 MW unit, in the waters off the Canary Islands.
Schneider Electric acquires U.K. energy procurement firm
Expanding its energy management services to multinational companies and medium-size concerns, Schneider Electric (Rueil-Malmaison, France) has acquired M&C Energy Group (Dunfermline, U.K.), a provider of energy procurement and sustainability services, from London-based private equity firm Lyceum Capital. M&C, which provides its services on a subscription basis, is projected to generate revenue totaling ₤35 million (about $56.5 million U.S.) during the fiscal year ending on June 30, 2012. Schneider Electric plans to integrate M&C into its Summit Energy business, a provider of similar services that Schneider acquired in 2011 for $268 million U.S. “M&C is a bolt-on acquisition that will strongly complement Summit’s offerings, significantly enhance the group’s position in energy management services, and accelerate our growth in countries where our presence is limited,” said Chris Curtis, executive vice president of Schneider’s buildings business. “In addition, this acquisition is totally in line with the group’s strategy to boost services growth. The combination will allow us to connect their supply-side expertise with our lead in demand-side solutions and generate significant synergies.”
Read more about Schneider Electric, Siemens, Daimler, Johnson Controls and other leading companies in the global climate change industry in CCBJ's August 2011 edition.
Solazyme to supply Dow with bio-based products
Under a contingent off-take agreement signed on May 2 by renewable oil and bio-based products maker Solazyme, Inc. (South San Francisco, CA) and the Dow Chemical Co. (Midland, MI), Dow has agreed to fulfill all of its needs for non-vegetable microbe-based oils used in dielectric fluid applications through 2015 by purchasing those oils from Solazyme. The agreement is contingent upon Solazyme’s ability to supply those oils to agreed-upon specifications, the companies said. Concurrently, Solazyme and Dow have entered into a Phase 2 Joint Development Agreement (JDA2), an exclusive, multi-year extension of their current joint-development agreement that includes accelerated commercialization timelines based on Solazyme’s progress in the production of tailored algal oils. “In the fast-growing space of bio-based dielectric insulating fluids, Solazyme’s tailored algal oils will serve as a technology platform for our continued efforts to bring innovative solutions to the power industry,” said Tim Laughlin, general manager of Dow Electrical & Telecommunications. “Advanced field trials in transformers will be initiated to further prove the technology and value proposition of these new products in the near term.”
Juhl Wind acquires Power Engineers Collaborative
In a move to expand its base of business and increase its service portfolio, Juhl Wind, Inc. (Pipestone, MN) has acquire Power Engineers Collaborative, LLC (PEC), an engineering firm with offices in Milwaukee and Madison, Wisconsin, and Chicago, Illinois. PEC generates approximately $4.5 million in revenue from services to electric utilities, independent power producers, industrial companies, and building management concerns. “By adding PEC to our team, we significantly boost our ability to grow well beyond community wind and into the full range of clean energy sectors, including natural gas, biomass, waste-to-energy, medium-to-large on-site solar, and support to larger wind farm construction,” said John Mitola, president of Juhl Wind. “This move represents a natural expansion on top of the credibility we enjoy in the medium-scale wind industry.”
K Road acquires 25 MW solar farm
Adding to a growing portfolio of utility-scale power projects, K Road Power Holdings, LLC (San Francisco, CA) has reached an agreement with SunPower Corp. (San Jose, CA) under which K Road Power will acquire the 25 MW McHenry Solar Project under development by SunPower in Modesto, California. SunPower has completed the design work and has commenced construction on the solar photovoltaic (PV) project, which will deliver its electric power to the Modesto Irrigation District under a 25-year power purchase agreement. To finance the purchase, K Road arranged non-recourse construction and term project financing with a syndicate of three institutions—Union Bank, N.A., Rabobank, and CIT Energy.
