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What Did We Learn This Week?

Daniel Englander: February 22, 2008, 9:06 AM
Everybody's workin' for the weekend... Everybody wants a new romance... Everybody's goin' off the deep end... Everbody needs a second chance... ...to read about what we learned this week!

Tarred And Feathered

Daniel Englander: February 22, 2008, 7:54 AM
Tony Hayward, BP's baby-faced CEO, has seen the future. And it's got nothing to do with moving beyond petroleum. As part of a cost cutting scheme during which the oil major will shed 14,500 jobs and cut nearly $1 billion in overhead costs, BP will also eliminate many of its renewable energy projects. At the company's annual investor presentation next Wednesday, Hayward is expected to announce the company is getting back to basics - expanding its CAPEX from $19 billion in 2007 to around $22 billion in 2008 with a focus on bumping up oil production. The British energy giant recently signed on to a joint venture with Husky Energy, a Canadian firm operating in Alberta's tar sands. Apparently the lure of oil on the high side of $90 is too much for BP to ignore, regardless of long term impact. Following John Browne's dubious departure after 12 years of leading the company into renewables, Hayward's back to business moves are both disappointing and short sighted.

The Morning Feedstock

Daniel Englander: February 22, 2008, 5:28 AM
  • Xiaofeng Peng always seems to have another trick up his sleeve. LDK Solar's CEO announced this morning the company has signed an eight year, 450 MW supply deal with Hyundai Heavy Industries. LDK will begin shipping off multicrystalline wafers to Hyundai later in the year. Kwon-Tae Kim, a Hyundai VP, remarked he was impressed with LDK's progress on their new facility and the quality of their revolutionary zeal. I'm impressed that LDK wasn't eaten alive by an unholy alliance of Chris Cox and Bill Lerach.

  • The mother and son team of Dan Whaley and Dr. Margaret Leinen have announced a $4 million A round for Climos, their plankton-based outfit. But, wait. Haven't we been here before? Climos and Planktos (the other plankton company - I know, right?) use the same method to stimulate oceanic plankton blooms for carbon capture. Except that Climos was able to avoid the vast, anti-plankton conspiracy that brought down their rival. Wait a second... I smell the work of evil robots. Or Dick Cheney.

  • Miles Electric, a quiet builder on non-ugly electric vehicles (well, ugly is really relative here), has just raised $15 million in private equity in a round lead by the Angeleno Group. The money will go towards continued development of its MILES XS500, a li-ion powered four door with a top speed of 80 mph and 120 mile range. The company is already well established in the low-speed EV market, and its hoping now that its new sedan will blow away the mightiest of golf carts.

  • File under lame. General Motors will sponsor an E85 ethanol pump in the Brentwood neighborhood of Los Angeles on February 26 from noon to 2 p.m. The pump, which is the city's only one, will dispense E85 at $0.859 a gallon. This is sure to please the city's 46,000 flex fuel drivers, who until know have been getting around through sporadic carjacking. Patrons are cautioned to watch out for white Ford Broncos.

  • And finally this week... An experimental form of renewable energy.

Suntech Takes A Licking, Listens For Faint Ticking Sound

Daniel Englander: February 21, 2008, 11:02 AM
Proving once again how beholden solar companies are to bottlenecking silicon supply, Suntech Power took a big hit following its earnings call on Wednesday. The company announced an EPS of $1.02 for 2007, below the $1.09 analyst consensus, with 4Q EPS at $0.29 versus a consensus of $0.36. Following the call, Suntech shares closed out the day down 12.3 percent to $40.24. A limited number of silicon supply contracts has forced Suntech to revise down its 2008 output plan to 530 MW, a far fall from previous estimates between 600 MW and 700 MW. The company has largely failed to lock in silicon supply contracts, which is a problem with silicon prices surging up to 30 percent higher on the spot market. Suntech's history of blowing past estimates has many investors disappointed in the company's performance. This must have SunPower's Tom Werner laughing all the way to the bank. Werner told the Piper Jaffray renewable energy investors conference on Wednesday he expects prices on long term supply contracts to drop between 30 and 50 percent by 2010 or 2011. Werner also told the crowd SunPower has 100 percent of its poly needs under contract. Clearly the Sun's Tech is no match for its Power.

How Green Is My Google?

Daniel Englander: February 21, 2008, 8:32 AM
Like a pre-teen girl meeting Hannah Montana, my rather awkward run in with Google's Dan Reicher was an encounter neither of us will soon forget. Except Dan Reicher, who probably ditched my card seconds after his bodyguards pried my fingers from his arm. My date with destiny happened on the same day Reicher announced Google's RE<C initiative, which lead many of us to wonder if there was anything these guys couldn't accomplish. Eco-villian? Well, now we've got at least one thing to add to Google's FAIL list - clean energy. A recent Harper's article lays bare the consequences of Google's efforts to support their expanding search and advertising empire. The company's massive data centers require access to cheap, abundant energy - usually in the form of hydroelectric power. But isn't hydro clean? For that answer, just ask the salmon.

Abengoa-A-Go-Go

Daniel Englander: February 21, 2008, 5:56 AM
Abengoa Solar announced this morning plans to build a 280 MW CSP plant in Gila Bend, AZ, about 70 miles southwest of Phoenix. The Spanish company will build, own, and operate the new plant, and has contracted to sell 100 percent of the plant's electricity to the Arizona Public Service Co. Though deal details weren't disclosed, this looks to be one big PPA. Abengoa estimates they'll receive about $4 billion in revenue from the sale of electricity over the next 30 years, after which point the Spanish will have enough money to buy back the Mexican Territory. Not quite the Alamo The plant, which is scheduled to come online around 2011, will use about three square miles of solar troughs coupled with molten salt thermal storage to drive two 140 MW steam generators, producing about 900,000 MWh yearly for 70,000 homes. It is billed as "the largest solar-power facility in the world if operational today." Well, that depends on what your definitions of "largest", "plant" and "today" are. Our Clintonian grammatical melodrama starts a few hundred miles northwest in the middle of the Mojave Desert.

The Morning Feedstock

Daniel Englander: February 21, 2008, 4:31 AM
I've been in New York the last few days for GTM's Solar Market Outlook show. And now, back to work.
  • The California Public Utilities commission has approved to the use of feed-in tariffs. The new program will support the development of 480 MW of small-scale generation capacity. CPUC President Michael Peevey explained "until now, only large renewable projects were able to effectively participate in the [RPS] program," but now large utilities like PG&E and SoCal Edison can buy power directly from these small projects. That splash you hear in the background is Pete Darbee taking a header into the Calistoga geyser field.

  • Spain's Abengoa Solar will build the world's largest solar power plant in Arizona. Weighing in at a mean 280 MW, the 1,900 acre plant will generate an estimated $4 billion over a 30 year period. Abengoa plans to sell electricity produced at the plant to Arizona Public Service Co., once the plant comes online in 2011. But, according to the company "construction of this solar plant and others under contract in the U.S. are subject to a long-term extension of the solar investment tax credit by the U.S. Congress." No sweat, those giant mirror things looked kind of silly out there in the desert with all that sun.

  • Ethanol supporters, fear no more! Magellan Midstream Partners, a large oil and gas distribution firm, has announced it is planning a 1,700 mile long, $3 billion ethanol pipeline with Buckeye Partners LP. The pipeline will stretch from South Dakota to New York, ensuring a supply of fresh, non-polluting American corn ethanol to the East Coast. No word on whether the federal government plans on going to war with South Dakota to defend the pipeline, err... defend freedom. Yeah, freedom.

  • Omaha's Tenaska Inc. filed an air permit application with Texas officials on Tuesdays seeking permission to build a 600 MW coal plant that captures more than 90 percent of its emissions. The plant, which will take several years to approve, will be situated over the Permian Basin and will cost nearly $3 billion (a popular figure this morning). Captured carbon dioxide from the plant will be pumped into empty oil wells in the basin, forcing out as yet unreachable oil. Well, at least now we know what the President is going to do after his term is up. President Bush in Happier Times

  • And finally today... Have it out with Coskata's Wes Bolsen on a GM-sponsored live chat at 1 p.m. Just don't ask him what he's wearing.