Clean Tech: Unlocking the New Green Economy

"How do we begin reorganizing the industrial economy?" Umair Haque asked in his Edge Economy essay "A Manifesto for the Next Industrial Revolution."

Haque answers his own question: "By using markets, networks, and communities to alter the way resources are managed: to weave a fabric of incentives for sustainable growth and authentic value creation into the economy – a new economic fabric that's meaningful to people."

I've been thinking a lot about this call to action while developing my new idea to "organize" (to use Haque's term) the green energy financing space. And I've been wrestling with the following questions (among others):

What would it take to infuse new DNA into the way green energy is financed?

Can we redraw the boundaries of value creation in the 21st century?

Can we expand the access to participation in this space?

Can we create a company that is based on the values of integrity, openness, transparency, and "a fierce embrace of what's good" (as Haque writes elsewhere)?

Can we create a company that develops incentives for people to reorganize and manage resources in a way that reduces the barriers to entry for most people?

I'm becoming obsessed by these questions and am trying to create a response to Umair's challenge.

I hope that what I'm working on with a few very smart people will help reduce or eliminate the "clear, durable, structural barriers to efficiency and productivity" in this space.

The pursuit of answers to these questions is one of the reasons I'm leaving Ashoka at the end of this month. I need to focus my time and energy on trying to explode the boundaries of value creation and unlock the new green economy.

Call me a fool, wish me luck – or come along for the ride.

Global Climate Change: World Bank Says, Oil Will Come Down Hard; Sovereign Wealth Can Fund Climate Fight

So, this morning on CNBC's Squawk Box, the show that never met a bear it didn't like, Uri Dadush, the dowdy and drowsy chief of International Economics at the World Bank, told the lovely and smart Becky Quick (she's quick too) that oil will be at $95/barrel by end of year and $88/barrel by 2010.

Watch video: Squawk Box

But how does that jibe with what the World Bank's Latin America chief, Pamela Cox told Reuters today that, "essentially, emerging economies can help fund the fight against climate change through sovereign wealth funds, swollen by oil and other exports receipts"?

"'It would be great if some of these sovereign wealth funds started investing in alternative technologies, some of the climate change funds that are being put forward,' Cox said, but added that the World Bank could not tell countries how they should invest their sovereign wealth."

"Emerging economies control up to US$3 trillion in sovereign wealth funds," according to Reuters, much of which have been padded by skyrocketing oil and commodities prices," along with bulging trade imbalances.

But those sovereign wealth funds will be a lot less swollen at $95-88/barrel.

Meanwhile, CNBC reported that oil prices fell today, despite an earlier advance to $137 on greatly reduced oil consumption projections from the Energy Department.

"The Energy Department, in a monthly report, indicated that high prices are cutting oil consumption more than expected in the industrialized world," according to CNBC. "Consumption is now expected to fall by 240,000 barrels a day in 2008; last month, the department forecast consumption would be unchanged from 2007 levels."

Still a long way to go from $131/barrel to $95. And it remains to be seen what this news will have on investments in climate change initiatives and alternative energy?

Very little, it appears.

According to Reuters, some emerging economy oil exporters are already planning clean energy and other climate initiatives:

--OPEC is planning a US$750 million research fund into burying greenhouse gases underground and has committed about US$35 million so far.

--The United Arab Emirates has launched a $15 billion "Masdar Initiative" to help plan for an era of falling oil reserves by investing in low carbon-emitting energy like solar power.

--Tokyo will contribute US$1.2 billion to the planned US$10 billion of developed country Climate Investment Funds (CIF) administered by the World Bank.

--The United States has pledged US$2 billion to the CIF and the UK will add part of a 800 million pound (US$1.57 billion) environment fund to the mix.

--The CIF will invest roughly US$5 billion each in funds to help developing countries cut emissions of planet-warming greenhouse gases, and to plan for climate change.

But how much of this could materialize without oil prices being what they are? And what happens if the oil bubble bursts or tankers are sitting just beyond the Verrazano Narrows waiting for the signal?

Global Climate Change: India GHG Inventory to Help Industries Reduce Emissions

US companies and State governments are not the only ones trying to get ahead of the curve on greenhouse gas emissions (GHG). Industries in developing countries like Brazil and India are also getting in the game.

WRI announced today that it is launching a new program in India to help companies from a range of industries, including cement, pharmaceuticals, and engineering, address greenhouse gas emissions.

"The India Greenhouse Gas Inventory Program will allow our companies to consistently and credibly monitor their emissions," said Mr. K P Nyati, Principal Advisor, Confederation of Indian Industry (CII), in a press release today.

The India GHG Inventory Program will be implemented by the Sohrabji Godrej Green Business Center (GBC) of CII.

"This new program will help India establish a national model of emissions accounting," said Manish Bapna, executive vice president of the World Resources Institute (WRI). "You can't manage what you don't measure."

WRI partnered with CII-GBC and the U.S. Environmental Protection Agency (EPA) to establish the program, which is modeled after EPA's Climate Leaders.

"By adopting greenhouse gas management strategies that make business sense, India's industry leaders are demonstrating that a healthy environment and a healthy economy can, in fact, go hand-in-hand," Jim Sullivan, director of the EPA's Climate Leaders program, said in a press release issued by WRI.

India ranks seventh in the world in terms of annual GHG emissions and is responsible for nearly 3.6 percent of world emissions. That doesn't sound like a heck of alot, but it is growing with the country's economic expansion.

"A GHG inventory will improve the company's understanding of its GHG emissions profile and thereby its potential GHG liability or exposure in a carbon constrained economy," noted Mr. A. K. Kaul, Ex-Chairperson, CII Delhi State Council.

Mind you, as a developing country, India has no GHG reduction obligation under the Kyoto Protocol. Corporate GHG reporting is also voluntary, but is becoming almost de rigeur as industry tries to grapple with the potential impacts of climate change on their businesses.

Smart companies are choosing to inventory their emissions and areas of possible efficiencies, which may also improve their bottom line.

India's program is similar to one recently launched in Brazil and is based on the standardized framework of the GHG Protocol.

The GHG Protocol was created by WRI and the World Business Council for Sustainable Development (WBCSD) and is considered the global standard for accounting of GHG emissions by governments, businesses, and other organizations.

WRI reports on a new study by the Corporate Register, which found that sixty-three percent of Fortune 500 companies use the GHG protocol to disclose their emissions.

The roster of member companies of the India GHG Inventory Program sports some big names in Indian businessn including Ashok Leyland, Bosch Ltd, Capricon Food Products, Century Rayon, Control Techniques India, Godrej Industries, HIRCO, Infosys Technologies, NICCO Corporation, Tata Power, Tata Iron & Steel, and Wipro.

Funding for the program is provided by the Asia Pacific Partnership on Clean Development and Climate and the U.S. EPA, according to WRI.

A move like this from India, which recognizes that growth doesn't have to come at the cost of the environment, sends a strong message to the rest of the world. India wants to lead.


(Blogging via BlackBerry; links to come.)

Global Climate Change: Tea for the Tillerson, Exxon Shareholders Try to Force Hand

More on the Rockefeller-led shareholder uprising at Exxon in today's New York Times:

The Rockefeller family built one of the great American fortunes by supplying the nation with oil. Now history has come full circle: some family members say it is time to start moving beyond the oil age.

The family members have thrown their support behind a shareholder rebellion that is ruffling feathers at Exxon Mobil, the giant oil company descended from John D. Rockefeller’s Standard Oil Trust.

Three of the resolutions, to be voted on at the company’s shareholder meeting on Wednesday, are considered unlikely to pass, even with Rockefeller family support.

The resolutions ask Exxon to take the threat of global warming more seriously and look for alternatives to spewing greenhouse gases into the air.

One resolution would urge the company to study the impact of global warming on poor countries, another would encourage Exxon to reduce its emissions and a third would encourage it to do more research on renewable energy sources like solar panels and wind turbines.

A fourth resolution, which the Rockefellers are most united in supporting, is considered more likely to pass. It would strip Rex W. Tillerson of his position as chairman of Exxon’s board, forcing the company to separate that job from the chief executive’s job.

A shareholder vote in favor of that idea would be a rebuke of Mr. Tillerson, who is widely perceived as more resistant than other oil chieftains to investing in alternative energy.

The Rockefellers say they are not trying to embarrass Mr. Tillerson, also Exxon’s chief executive, but think it is time for the company to spend more of its funds helping the nation chart a new energy future.

Read the article in full (requires log-in): Rockefellers

Wallstrip on Oil and Gas Prices: They've Got Us Over a Barrel

Our minivan now cost over $70 to fill. We don't even drive it that much, but it still hurts.

Here's a Wallstrip "Julie in the Street" episode on oil and gas prices in New York. I'm with Julie, don't know whether to laugh or cry:



The saddest (but truest) comment is the Brit who says he'd pay whatever it takes for a gallon of petrol and just have to do without something else. OPEC take note!

Clean Tech: A Mighty Wind Grows 45 Percent in '07

I realized today that I've been giving a lot of space to solar on this blog -- okay, I confess, my obsession with First Solar has been getting out of hand, especially in the first month of 2008! But as long as it holds above my initial position, I'll try to ignore those additional shares I bought before the tumble.

Then it came to my attention (thanks to Triple Pundit) that the American Wind Energy Association (AWEA) last week reported record growth in wind power generation with 5,244 megawatts of capacity installed in 2007 – a 45 percent increase reflecting US$9 billion in investment and 30 percent of all new power generating capacity in 2007.

But not so fast. The same report notes that 2008 "will likely show growing pains as there is a current shortage of wind turbines, a situation that the AWEA sees as a big opportunity for manufacturers and entrepreneurs wishing to get in on a growing market. There’s always a better mouse trap – wind energy technology is ripe for imaginative innovators to not only fill the current need for parts, but to continually make those parts better."

TP adds: "It is also time for government to step up to the plate and push forward in support of alternative energy in a big way. Congress is debating this week the future of alternative energy tax credits set to expire this year with no current provision for renewal.

"While the Energy Independence and Security Act of 2007 recently signed in Congress does provide $2 billion dollars in research for alternative energy, it still pales in comparison to subsidies given the fossil fuel industry.

"Farmers also have a great opportunity to capitalize on wind power generation, 'growing' energy from wind and leaving their corn for food instead of ethanol. After all, not all alternative energy is created equal."

Okay, I feel better now. It's not all solar and I'll try to give equal time to the other alternatives. (Thanks, TP)

Pass the sunscreen someone...anyone.

Clean Tech: Solar May Hit Wall of Supply and Demand

The led says it all: "The booming solar power sector is about to get squeezed by the age-old laws of supply and demand."

This comes from a very smart article from Nichola Groom at Reuters News Service, which I'm going to quote in its entirety, just because those of us interested in the solar market need to pay attention. I will note, however, that despite Ms. Brown's assertion that First Solar (and other thin-film manufacturers) are well-positioned, they closed at 181 today. That hurts.

Here is the article in full:

Solar energy companies are scrambling to ramp up production amid skyrocketing interest in renewable energy, but the pendulum is swinging quickly toward oversupply.

That places a few players in the sector, including Yingli Green Energy Holding Co Ltd, First Solar Inc, as well as Q-Cells and SolarWorld AG, in the best position to benefit from the changing dynamics, analysts said.

Torrid investment in 2007 fueled growth at solar companies JA Solar Holdings Co Ltd, Suntech Power Holdings Co Ltd, SunPower Corp and others thanks to global warming concerns, soaring fossil fuel prices and government subsidies in Germany, Spain and the United States.

The shares of those companies soared last year, but have been pummeled in the opening weeks of 2008 as concerns about a possible US recession weigh down the broader market.

Still, strong demand for solar panels is expected to continue through this year, although more of the industry's key raw ingredient, polysilicon, is coming to the market, which will lead to more photovoltaic (PV) cells that convert sunlight into electricity. Cells are then packaged together to form the modules that make up solar panels.

By next year, supply could very well outstrip demand.

"Companies are working really hard over the next year-and- a-half to put the steel in the ground and develop on the expansions that they've promised," said Karina Funk, an analyst with Winslow Green Mutual Funds in Boston, which manages about US$580 million.

"The dynamic is definitely going to change once that supply is in the market."

The supply demand shift has investors wondering which solar companies are best prepared to preserve their lofty profit margins by reducing costs as prices fall.

SELECTIVE ON SOLAR

Last week, Banc of America Securities analyst Eric Brown advised clients to be selective about photovoltaic manufacturers over the next year, citing expectations that oncoming capacity would drive down selling prices.

"In spite of strong growth ahead, we are neutral on the PV sector," Brown wrote. "Lower barriers to entry will contribute to lower prices -- and consequently lower margins."

The emergence of dozens of Chinese solar companies and the greater availability of polysilicon, which has been in short supply, are helping drive supply increases, Brown said. He expects module prices to fall 15 percent in 2009, leading to weaker profit margins across the industry.

He said Yingli Green Energy and First Solar were well positioned because of their low cost structures. First Solar, which makes thin-film cells, also benefits because its cells do not rely on polysilicon, he added.

German bank WestLB said Monday that growing supplies of silicon should lead to lower margins for cell, wafer and module producers in 2009. Large, vertically integrated companies such as Q-Cells and SolarWorld were most likely to withstand this development.

ThinkEquity Partners solar industry analyst Jonathan Hoopes said, however, that because so many of the solar module makers are start-ups that are still ramping up production, they have significant opportunities to cut costs in the near term.

"We think there are a lot of costs to come out of this model as they scale up," Hoopes said. "This market is relatively nascent."

One way solar companies have already reduced costs is through deals with companies further up or down the supply stream, Funk said, citing cell manufacturer SunPower's 2006 acquisition of panel installation company PowerLight Corp.

Earlier this month, solar wafer maker LDK Solar Co Ltd made a similar move, taking a 33.5 percent stake in crucible maker Jiangxi Sinoma New Material Co Ltd. Crucibles are used to heat silicon to very high temperatures.

One big unknown is demand. Although the industry is expected to keep expanding at a rapid clip, that growth still depends on the outlook for government incentives and subsidies.

Lehman Brothers analyst Vishal Shah said government incentive programs in Germany and Spain, which have been key to driving growth, would help support prices.

"There is a floor in pricing given the incentives that are in place, even in an oversupply situation," Shah said. "Beyond 2009, the outcome really depends on how the incentives develop in these countries and others." (Editing by Andre Grenon)

Story by Nichola Groom
from REUTERS NEWS SERVICE

Clean Tech: SciAm Solar Plan for US; 69 Percent by 2050

Scientific American has a feature piece by Ken Zweibel, James Mason, and Vasilis Fthenakis on a potential future for solar energy in the United States.

Key concepts:

*A massive switch from coal, oil, natural gas and nuclear power plants to solar power plants could supply 69 percent of the U.S. electricity and 35 percent of its total energy by 2050.

*A vast area of photovoltaic cells would have to be erected in the Southwest. Excess daytime energy would be stored as compressed air in underground caverns to be tapped during nighttime hours.

*Large solar concentrator power plants would be built as well.

*A new DC (direct-current) power transmission backbone would deliver solar electricity across the country.

*Unfortunately, this may require US$420 billion in subsidies from 2011 to 2050 to fund the infrastructure and make it cost-competitive.

Read the full article: SciAm Solar Plan

Clean Tech: Solar Cell Production up in 2007, Says Earth Policy Institute

Lester Brown's Earth Policy Institute (EPI) has issued its "Eco-Economy Indicators" for the global solar industry in 2007. And it's positive news. Here are the "top ten points of light" from the report as I see it:

1.) Production of photovoltaics (PV) jumped to 3,800 megawatts worldwide, up an estimated 50 percent over 2006. At the end of the year, according to preliminary data, cumulative global production stood at 12,400 megawatts, enough to power 2.4 million U.S. homes. This represents an average growth of 48 percent each year since 2002 -- essentially doubling every two years.

2.) Among PVs, new thin-film technologies, such as that being developed by Green Skeptic-favorite First Solar (FSLR), is fast-growing taking advantage of the worldwide shortage of polysilicon, which is used in more traditional solar cell technologies. EPI reports that thin film grew from 4 percent of the market in 2003 to 7 percent in 2006. Polysilicon supply is expected to match demand by 2010, but not before thin film grabs 20 percent of the market.

3.) The top five PV-producing countries are Japan, China, Germany, Taiwan, and the United States, according to EPI. After almost tripling its PV production in 2006, China is believed to have more than doubled output in 2007. With more than 400 PV companies, China’s market share has exploded from 1 percent in 2003 to over 18 percent today. Having eclipsed Germany in 2007 to take the number two spot, China is now on track to become the number one PV producer in 2008. The United States, which gave the world the solar cell, has dropped from third to fifth place as a solar cell manufacturer since 2005, overtaken by China in 2006 and Taiwan in 2007.

4.) China is planning a 100-megawatt solar PV farm in Dunhuang City in the northwestern province of Gansu, which would have five times the capacity of the largest PV power plant in the world today.

5.) Despite its skies being cloudy two thirds of the time, Germany has been the leading market for PV installations since it overtook Japan in 2004. In 2006, Germany, adding 1,050 megawatts, became the first country to install more than one gigawatt in a single year. Japan, the United States, and Spain round out the top four markets with 350, 141, and 70 megawatts installed in 2006, respectively. (See EPI data.)

6.) Growth in US installations increased from 20 percent in 2005 to 31 percent in 2006, primarily driven by California and New Jersey. The California Solar Initiative was launched in January 2006 as part of the state’s Million Solar Roofs program to provide more than US$3 billion in incentives for solar power. The goal is to generate 3,000 megawatts of new solar power statewide by 2017. New Jersey’s Clean Energy Rebate Program, which began in 2001, offers a rebate of up to US$3.50 per watt for residential PV systems, contributing to a more than tripling of installations between 2005 and 2006.

7.) Of the world’s PV manufacturers in 2007, Sharp (Japan), Q-Cells (Germany), and Suntech (China) claimed the top three positions. (See EPI data.) But after holding the top spot for more than six years, Sharp, hampered by limited access to polysilicon, is likely to post only a 4-percent growth in production in 2007, well below the 50 percent industry average.

However, Sharp’s annual thin-film production capacity is on track to increase from 15 megawatts today to 1,000 megawatts per year in 2010. Suntech, a relatively new firm started in 2001, was the fourth-largest PV manufacturer in 2006, and eclipsed Kyocera in 2007 to take third place. In the first half of 2007, Suntech produced almost as much PV as it did in all of 2006.

8.) Capitalizing on the polysilicon supply crunch, First Solar in the United States moved into the top 15 global manufacturers in 2006 by producing 60 megawatts of cadmium telluride thin-film PV, triple its production in 2005. In the first half of 2007, First Solar leapt onto the top 10 list, moving up five spots to number eight and continuing its reign as the fastest-growing PV manufacturing company in the world.

9.) The average price for a PV module, excluding installation and other system costs, has dropped from almost $100 per watt in 1975 to less than $4 per watt at the end of 2006. (See EPI data.) With expanding polysilicon supplies, average PV prices are projected to drop to $2 per watt in 2010. For thin-film PV alone, production costs are expected to reach $1 per watt in 2010, at which point solar PV will become competitive with coal-fired electricity.

10.) With concerns about rising oil prices and climate change spawning political momentum for renewable energy, solar electricity is poised to take a prominent position in the global energy economy.

For a more complete report, see EPI Eco-Economy Indicators: Solar

Global Climate Change: EPA Tells States "No, No, No" On Own Auto Emissions Standards

The US Environmental Protection Agency (EPA) rejected the rights of California and 16 other states to set their own standards for carbon dioxide emissions from automobiles.

Claiming federal authority, EPA administrator, Stephen L. Johnson, said the proposed California rules are made moot by the energy bill (HR6) signed into law by President Bush on Wednesday.

According the the New York Times, "The decision immediately provoked a heated debate over its scientific basis and whether political pressure was applied by the automobile industry to help it escape the proposed California regulations. Officials from the states and numerous environmental groups vowed to sue to overturn the edict."

Johnson was quick to defend his agency's decision, stating, "The Bush administration is moving forward with a clear national solution, not a confusing patchwork of state rules. I believe this is a better approach than if individual states were to act alone."

For over two years California, New York, New Jersey, and Connecticut, along with 13 other states have waited as the Bush administration debated the issue of a state's right to adopt stricter air quality standards than the federal government.

The emissions standards California represented GHG emissions cut of 30 percent in new cars and light trucks by 2016, beginning with 2009 models. That's significantly higher -- 43 miles per gallon for cars and some light trucks and about 27 miles per gallon for heavier trucks and SUVs -- than the Energy Bill's 35 MPG.

I always find it interesting that state's rights are evoked inconsistently when its convenient. One wonders whether the Bush administration simply didn't want to be trumped by Schwarzenegger.

"It is disappointing that the federal government is standing in our way and ignoring the will of tens of millions of people across the nation," Mr. Schwarzenegger said. "We will continue to fight this battle."

You can almost hear him say, "I'll be back..."

Clean Tech: Nanosolar Cells, or What the...?

A friend of mine invoked Warren Buffett in a comment on an earlier post about nanotechnology on this blog some time ago, and I'm straying out of my Warren Buffett territory with this one. In other words, I don't really understand this stuff enough to invest in it, but it's cool.

Now a new paper begins to explain nanotechnology's potential applications in the solar arena:

Researchers at Harvard University have made solar cells that are a small fraction of the width of a human hair. The cells, each made from a single nanowire just 300 nanometers wide, could be useful for powering tiny sensors or robots for environmental monitoring or military applications. What's more, the basic design of the solar cells could be useful in large-scale power production, potentially lowering the cost of generating electricity from the sun.

Each of the new solar cells is a nanowire with a core of crystalline silicon and several concentric layers of silicon with different electronic properties. These layers perform the same functions that the semiconductor layers in conventional solar cells do, absorbing light and capturing electrons to create electricity.

To make the cells, Charles Lieber, a professor of chemistry at Harvard University, modified methods he'd previously used to make nanowires that could serve as sensors or transistors. He then demonstrated that his solar cells can power two of his earlier nanowire devices, a pH sensor and a set of transistors.

"This paper provides the very first example of using a single silicon nanowire for harvesting solar energy," says Zhong Lin Wang, professor of materials science and engineering at Georgia Tech. He calls Lieber's work "breakthrough research in the field of nanotechnology."

This is wild stuff. And something to watch, even if we don't yet understand it.

See the story in Technology Review

Here's a link to Lieber's Paper

Photo credit: Charles Lieber, Harvard University, "a cross section of silicon nanowire that converts light into electricity. The image has been colored to highlight the functional layers of the device. Each layer is made of silicon modified with another material that gives it distinct electronic properties."

Clean Tech: Space, The Solar Frontier?

One of our favorite clean tech writers, Tyler Hamilton of the Toronto Star has an intriguing post about the space race for solar energy development. No, this isn't about creating a new "man on the moon" mission to catalyze investment. This, deployment of solar receptors and technologies into space. Maybe getting closer to the source generates more energy?

His Clean Break column this week talks about how a U.S. government agency is promoting the idea of space-based solar technology and putting up some serious money.

The National Security Space Office, a part of the U.S. Department of Defense, posits that energy is a security issue and that such concerns, along with the need for addressing climate change through advancements in technology, calls for a massive government investment in space-based solar power systems.

NSSO proposes a 10-megawatt pilot, which could, Tyler says, "spur private investment in commercial ventures, much like early government investment in the Internet and GPS eventually transformed the way we do business."

Perhaps space is the final frontier for solar. We can hear Scotty calling out to Kirk, "I canna get no power Captain." To which Kirk replies, "Move a little closer to the sun, Scotty."

Read his blog piece: Tyler in Space

Or the full article: Tyler in Toronto Star

Clean Tech: Tipping Point for China Sunergy?

Greentech Media reports on China Sunergy's deal to buy about 106 metric tons of solar-grade polysilicon from Chinese manufacturer Luoyang Zhonggui High-tech. Can this be the tipping point for China in the solar market?

"The deal is especially welcome to China Sunergy, which has become emblematic of the silicon shortage plaguing the solar industry (see Could China Steal the Solar Throne?).

"On Monday, China Sunergy's stock tumbled 9.52 percent, to close at $10.08 per share, after shareholders filed a class-action lawsuit against the Chinese company (see China Sunergy Troubles Continue).

"And Wall Street jitters have been shaking up some Chinese solar companies' stocks as investors react to allegations surrounding inconsistencies in LDK Solar's inventory of solar-grade silicon (see LDK Says Inventory Discrepancy Allegations Have 'No Merit' and New Details Surface as LDK's Stock Continues to Plunge).

"News of the silicon deal helped push the China Sunergy's stock back up 20.7 percent to close at $12.17 per share Tuesday.

"China Sunergy (NSDQ: CSUN) said the contracted amount will support the production of about 13 megawatts of solar cells from September 2007 to March 2008. But the company kept a tight lip on how much it paid for the goods, stating only that it garnered a fixed price for the length of the contract."

Read the complete Greentech Media article: China Sunergy

China Sunergy will announce its 2007 Q3 earnings on November 19th. A conference call will be arranged for 8:00 a.m. EST, details of which will be circulated nearer the time and be available on China Sunergy's website http://www.chinasunergy.com .

China Sunergy Co., Ltd. is a leading manufacturer of solar cell products in China as measured by production capacity. China Sunergy manufactures solar cells from silicon wafers utilizing crystalline silicon solar cell technology to convert sunlight directly into electricity through a process known as the photovoltaic effect. China Sunergy sells solar cell products to Chinese and overseas module manufacturers and system integrators, who assemble solar cells into solar modules and solar power systems for use in various markets.

Social Entrepreneurs: The Village Phone Program; Since When is Success Obsolete?

"Connectivity is productivity," wrote Iqbal Quadir, describing how he arrived at the idea for what became GrameenPhone. "Connection enables, disconnection disables."

By now, the field-changing story of GrameenPhone and its Village Phone Program is well known. It started as a joint partnership between Grameen Telecom (which owns 35%), Gonofone, Japan's Marubeni Corporation, and the Norwegian telecommunications company Telenor Mobile Communications AS, which has "led to other opportunities, other kinds of progress in the villages."

In 1993, when Quadir originally conceived his idea, there were 2 phones per 1,000 people in Bangladesh and virtually none in rural villages where over 100 million people lived. Meanwhile, back in the U.S., where Quadir was educated, the Internet and email were beginning to revolutionize communications and, by extension, productivity.

Quadir began searching for evidence of the link between telecommunications and economic progress. He found it.

UN studies indicated that an underdeveloped economy, such as that found in Quadir's native Bangladesh, "could grow by US$5,000 annually in GNP due to one additional phone that, as it turns out, would only cost US$1,300." It was an opportunity that the young Quadir could not ignore.

He looked to Grameen Bank, which had brought hope and economic progress to rural Bangladesh via microcredit infrastructure; by then, the bank operated in 35,000 villages and made US$100-200 loans to the women who lived there.

"To me, connectivity could play a similar role," said Quadir. "Both credit and connectivity empower individuals."

Telephones, thought Quadir, connect producers and customers, and allow women in poor villages to call ahead when making doctor appointments. Phones could also generate income for the women who sell excess call time to other women in their village. His start-up, Gonofone, which means "peoples phones," could create self-employment through small loans to acquire wireless handsets.

A decade later, according to David Keogh, manager of Village Technology at Grameen Foundation's Technology Center in Seattle, Grameen Telecom "now has 294,000 operators." Pretty good scale, considering many experts predicted would reach its saturation-point of 50,000 clients after 5 years.

Replication of the Village Phone model has led to expansion into Uganda, Rwanda, Cambodia, Senegal, Cameroon, Haiti, and the Philippines. At least 10,000 operators have answered the call in Uganda and another 600 in Rwanda, with the recently launched pilot in Cameroon already signing up 50 clients.

Yet, Richard Shaffer, longtime Wall Street Journal columnist and the author of a recent article in Fast Company magazine (FC), claims that the concept of giving loans for cell phones in rural villages is now obsolete.

In Bangladesh, phones are now so cheap and available, the author argues, that the "phone ladies" are no longer necessary. The author worries that the women can no longer make a living on their cell phones alone. Shaffer asserts that the program no longer supports claims that it provides a stepping stone out of poverty.

But this seems to ignore the fact that, as anecdotal as it may be, many side businesses have been created by this program over the past ten years, in part because the women who start out with phone loan later consider other ways to diversify their businesses.

"One lady is thinking about raising a large number of chickens," writes Quadir in an article on gramBangla.com, "a business she had not pursued earlier for fear of not being able to call a veterinarian on time if the chickens developed a disease." Another decides to grow bananas because market prices are now just a phone call away, which leads to better harvesting and shipping decisions.

Shaffer unfairly claims that lower profits from cell phones actually force the operators to diversify. What's so bad about that?

No business that fails to diversify or innovate over ten years is going to stay around very long. Competitors enter lucrative markets and you innovate or die. Like any business, Grameen Phone has had to adjust its strategy along the way.

Now that phones are cheap and there are many others offering such services, it would seem that the Village Phone model is obsolete, as Shaffer offers. But, lest we forget that the surest way to test market demand is to create competition. The original project has spawned a whole range of potential competitors and customers, and that is healthy and productive for the overall economy. It also suits the original aims quite well.

According to Keogh, the Village Phone model was developed in reaction to several market shortcomings; namely, lack of coverage and the length of time it would take for phone companies to extend their reach to rural areas; handsets were (then) too expensive for most of the rural poor; and service fees for airtime were simply too high.

For those associated with Gonofone and its original aims, accessing Grameen Bank's large network of borrowers to get phones in the hands of the rural poor was a temporary means, not an end.

Indeed, one of Iqbal Quadir's original goals for Gonofone was to identify and create a market for telecommunications where others had not seen one before, enabling the digital revolution to get a foothold in a poor country.

Gonofone is no longer a partner in Grameen Telecom, having sold its shares to Telenor, but in an annual report published in 2004, its aims were clear: to use the power of connectivity to spur higher productivity; to use the rapidly declining costs of telecommunications technology to reach poor communities; and to leverage the borrower network of Grameen Bank to deliver connectivity. In short, the goal was to transform the country of Bangladesh by identifying and creating a market for telecom services.

One could argue this has been accomplished and then some. Sources say there are now at least six telecoms providing cell phone services in Bangladesh. "Cell phones are everywhere," according to one source quoted in the FC article.

The current situation, where cell phones are now ubiquitous, can be seen as one definition of success -- free market style.

"All products have life cycles," suggests Keogh in an email. "And the decline in Village Phone operator incomes over the past years was inevitable."

However, the costs of equipment and airtime are also coming down, and this allows the loans to be smaller, allowing a valuable revenue stream for many individuals.

"It also provides an important service in rural communities where even at current market prices many poor people are still unable to afford their own phones," Keogh offers.

In my view, Shaffer misses several key points in his FC article:

1. The real goal of the "Village Phone" idea in Bangladesh was to create nationwide telecom access for all people;

2. The Village Phone program has helped create additional opportunities for entrepreneurs to diversify their income streams and created over 290,000 businesses in Bangladesh alone;

3. The shareholders of Grameen Bank (the real owners of the bank who access the loans) now own 38 percent (including Marubeni’s 3 percent, which Grameen acquired) of the largest telecom in Bangladesh -- a US$3bn business, which is a pretty good return on their investment.

That sounds like success when measured against the stated aims of the original partners in the Village Phone Program.

So what exactly does Shaffer mean by obsolete? And what is so bad about obsolescence if it means greater competition reducing costs and greater access for more of the world's poor?

The model may no longer be appropriate in some places and may not provide "a clear path out of the poverty cycle." But what of it? The Village Phone program has clearly created a market where there was none and where few were willing to go before.

Shaffer admits that Grameen Phone overcame "risks -- spending $1.2 billion, for example, on communications infrastructure in an impoverished land -- that few others would have considered and has improved the lives of countless people."

If anything, in my view, the program may be faulted for failing to see its true business. Like the seemingly apocryphal story of the railroads losing out to trucking and airplanes because they thought they were in the railroad business rather than the transportation business, Grameen Phone thought they were in the retail cell phone business rather than in the business of transforming communications.

The fact is, according to Keogh and the Grameen Foundation, there are "still 2.6 billion people living under two dollars a day who cannot purchase their own phones, and for them affordable, accessible telephone services are vital." This would appear to be an untapped market for a viable, sustainable avenue for providing services, whether cell phones or other needs.

Indeed, Grameen Foundation is, Keogh told me in an email, "developing mobile applications that can be built on the Village Phone platform to enable communities to access healthcare, financial, educational and other critical resources."

My bottom line is: Let's not hang up on the Village Phone Program just yet; it may still provide value and help bridge a gap in the digital divide.

Clean Tech: Tyler Hamilton Interviews Vinod Khosla

"What is a material 'climate solution' in [Vinod] Khosla's world?"

That's one of the things Tyler Hamilton asks Khosla, founder of Khosla Ventures and a long-time partner with venture capital titan Kleiner Perkins Caufield & Byers (and one of our favorite social capitalists in his Toronto Star column today.

The answer: "What's clean, cost-competitive, can be deployed on a large scale and is capable of dramatically reducing greenhouse gas emissions?"

Among the other insights Tyler shares: "Khosla more or less divides clean-technology investments into two camps: those that can make real but relatively small changes and those that can make huge changes to the world's environmental problems, most notably climate change.

"'There's a difference between a good green investment and a climate solution,' he told me last week in an interview. 'I came into it from the point of view that asks what the large solutions are that actually matter to climate change.

"'I love PV (solar photovoltaics), and we have investments in PV, but I don't think it will be relevant to climate change in the next 20 years.'"

We have to stop playing with toys, Khosla tells Hamilton, who is also author of the Clean Break blog.

"Khosla, in addition to his other green investments, is placing a big bet on solar-thermal technology – what he considers the best weapon in the 'war on coal power generation.' To a lesser extent, he's also increasingly drawn to the potential of enhanced geothermal power.

"'Solar thermal has been ignored completely in favour of sexier photovoltaics,' he says. 'When I started looking at solar thermal early last year, I couldn't find anybody who was paying attention, which sort of surprised me. It's a great technology, and about one-fourth the cost of PV with the kind of reliability that utilities actually like.'"

"By solar thermal," explains Hamilton in a sidebar, "Khosla is referring to concentrating solar power, as opposed to solar thermal technologies used to provide space heating and hot water in buildings, or conventional solar power, where the sunlight strikes a PV cell and is converted into electricity.

"Concentrating solar power uses parabolic mirrors to focus the sun's energy on a single point, creating high temperatures that generate steam from a fluid. The steam spins a turbine, just as it would in a coal plant, which in turn generates electricity."

Khosla is also ahead of many others in his consideration of another important investment area: next-generation, ultra-high-voltage DC transmission technologies and infrastructure.

To Khosla, suggest Hamilton, "getting off coal and other fossil fuels means playing to our clean-energy strengths and connecting our energy sweet spots to a large, trans-national grid that can efficiently carry power over long distances."

This irks many extreme greens -- and bothers some NIMBY opponents of big alternative projects. But it is a solution that needs to be investigated and invested in.




Read more: Sun to Shine on Solar

Read Tyler Hamilton's Clean Break blog

Clean Tech: The Clean Tech Revolution, Reviewed

"Remember President Jimmy Carter by the fireside in his cardigan sweater in 1978, urging Americans to turn down their thermostats?" asks Ron Pernick and Clint Wilder in Clean Tech Revolution: The Next Big Growth and Investment Opportunity, published last month by Collins. "Wipe that image from your memory banks."

Today's clean tech is not about "cutting back and 'going without'," but about "doing everything we already do, but doing it cleaner, smarter, better," argue the authors, who also write the popular Clean Edge web site and manage the leading research and publishing firm of the same name. They argue that this revolution is less about going green than about building the biggest potential multi-billion dollar industry on the horizon.

The book is a resource for gap investors (if you're not into clean tech already, you're behind the curve), potential entrepreneurs, recent business school grads, and consumers who want a quick study of what's been going on in this space.

While the audience is broad, Pernick and Wilder do a good job explaining the basics and setting the stage for what they see as the most promising ideas and businesses out there.

The trouble with a book like this, however, is that the industry is moving at the light speed and printer's ink still runs slow as molasses. The clean tech landscape is changing so fast that a traditional book quickly goes out of date. The authors' Clean Edge and Clean Tech Revolution sites, along with Tyler Hamilton's Clean Break blog, will continue to be essential. They are closely watching this space and have learned how to spot the trends and pitfalls.

Pernick and Wilder have an easy, engaging style that has adapted well from web to print. While at times it seems their enthusiasm for this space gets the better of them -- my "booster" alarm went off more than once -- in the end, the book is well organized and useful for its insights.

The various sectors in the clean tech space -- wind, solar, biofuels, etc. -- are given their own chapters and companies to watch are listed at the end of each, which proves a handy reference.

In addition, the authors identify what they see as "Breakthrough Opportunities" throughout, such as "Building-integrated Wind," "Integrated Photovoltaics," "LED Lighting," and "Automated Meter Readers." And each chapter ends with a consumer-focused sidebar highlighting a couple of next stage products or services to watch.

"We'll look back at the beginning of the 21st Century and see it as the tipping point for clean technology," the authors write Let's hope the authors are right.

Meanwhile, if you're looking for a primer on the clean tech space, look no further than Ron Pernick and Clint Wilder's Clean Tech Revolution.

Global Climate Change: Bush Weighing Emissions Caps

The Wall Street Journal reports this morning that George Bush and other top officials from his administration, including Treasury Secretary Henry "Hank" Paulson, are exploring a range of options to address climate change. These options may, according the WSJ article by John D. McKinnon, include "some form of economy-wide emissions caps."

The administration has long been opposed to caps, which helped lead to its position on the Kyoto Protocol, citing their opinion that emissions limits would hurt the U.S. economy while giving greater emissions freedom to developing powerhouses such as China and India.

Mr. Bush and his administration seem to be coming around. In May, the President promised to seek an agreement on greenhouse gas reductions on the international stage. Increasing pressure from industry, Congress, and pending international negotiations may be behind the conversion, along with growing concern about what some see as the inevitably of a cap-and-trade system.

Read the full article (registration may be required): WSJ Bush Cap

Global Climate Change: Business Leaders Call for Action

According to an article by Scott Malone at Reuters, "a major U.S. industry body said on Tuesday that human activity is changing the Earth's climate and urged Washington to take action to reduce greenhouse gas emissions nationwide.

"But the Business Roundtable, representing 160 of the largest U.S. companies with $4.5 trillion in combined revenue, stopped short of advocating a specific policy to accomplish that, saying its members did not yet agree on methods.

"'The thinking of U.S. CEOs on climate change is evolving significantly,' said Charles Holliday, chairman and chief executive of U.S. chemicals group DuPont, and a Roundtable member. 'A growing number of CEOs view it as a major issue for their companies.'

"In recent years, corporate America has dropped arguments that there is no proof human activity causes warmer patterns across the world, putting some business executives at odds with the Bush administration which rejected the Kyoto Protocol, the main U.N. plan until 2012 for curbing greenhouse gases.

"Many scientists say rising emissions of greenhouse gases, particularly carbon dioxide produced by burning fossil fuels, are linked to rising world temperatures. Many fear the warming trend could lead to more droughts, floods, heat waves and more powerful storms.

"'Some of our members like the idea of a cap-and-trade,' said John Castellani, president of the Washington-based organization, referring to programs in which companies could buy and sell the right to emit carbon dioxide.

"'Some members like a tax approach, we don't know which works best. So at this point we're calling for flexibility,' Castellani said in a telephone interview.

"The Roundtable's members include some of the biggest names in U.S. business, such as General Electric Co., Exxon Mobil Corp. and General Motors Corp.

"Environmental group the Sierra Club dismissed the Roundtable's statement as an attempt to appear environmentally sensitive while actually seeking to ensure any new regulations accommodate its members.

"'Businesses understand that any regulation that is going to pass this Congress and get signed by this president is going to be something very weak,' said Sierra spokesman Josh Dorner. 'It's no coincidence that a lot of huge emitters are tripping over themselves to call for some action on climate change.'"

Read More: Business Roundtable Climate Action

Investing: ISS Introduces Sustainability Risk Reports

Institutional Shareholder Services (ISS), the world’s leading provider of corporate governance and proxy voting services, last week announced the launch of its global Sustainability Risk Reports database.

Drawing on an extensive set of over 400 environmental, social and governance (ESG) factors, ISS offers in-depth company profiles rich with qualitative analysis and a relative scoring system to help investors assess a company's ESG performance and compare it against industry peers.

As environmental and social issues such as climate change, energy use, labor and human rights begin to assume a higher profile among mainstream investors, there is a need for more extensive sustainability considerations for deeper analysis.

Leveraging the analysis and scoring embedded in the ISS Sustainability Risk Reports enables investors to analyze the potential sustainability-related risks and opportunities of portfolio companies.

“Shareholders not only expect their asset managers to know whether companies are acting as good corporate citizens, but also to consider ESG performance when managing their portfolios,” said John Deosaran, ISS Vice President of ESG Analytics. “With ISS’ Sustainability Risk Reports database, investment managers can identify those ESG factors that best align with their client-driven mandates, and determine appropriate investment weightings, turning compliance priorities into a competitive edge.”

Building upon its proven corporate governance model introduced in 2002, ISS is the first to deliver a reliable, objective and transparent scoring system for environmental and social performance. The breadth of the ISS sustainability scoring factors encompasses key areas such as carbon emissions, energy use, labor standards and ethics. ISS also analyzes each company’s disclosure practices, adherence to ESG policies and its Board’s oversight of ESG issues.

Investment managers can leverage ISS reports and scoring model to identify sustainability-related risk in portfolio companies and to manage client-driven mandates related to environmental, social and governance screening.

“Investors are asking increasing numbers of companies to provide more information around their ESG efforts, yet disclosure practices vary widely,” added Deosaran. “To obtain a comprehensive picture, investors need a consistent framework to evaluate ESG practices."

ISS’ global coverage universe for its Sustainability Risk Reports database includes the S&P 500, TSX 300 and European MSCI EAFE companies.

To learn more about ISS’ ESG services: ESG.

Global Climate Change: Professor Summers' "Practical Steps" to Tackle Global Warming

Lawrence Summers, the the Charles W. Eliot university professor at Harvard, writing in the Financial Times on Monday, offers a five point agenda for taking on climate change. He starts with the premise that the Kyoto Protocol may be as weak in controlling climate change as the League of Nations was in promoting peace. (A sad, but poignant commentary, with which we agree.)

Here are the main points of professor Summers' agenda (highlighted by The Green Skeptic):

"First, the US must engage in an energy efficiency programme that takes effect without delay and has meaningful bite. As long as developing countries can point to the US as a free rider there will not be serious dialogue about what they are willing to do. I prefer carbon and/or gasoline tax measures to permit systems or heavy regulatory approaches because the latter are more likely to be economically inefficient and to be regressive. The key point is that after Kyoto, where there was US vision in setting goals but no on-the-ground action, there must be real policy commitments.

"Second, the major industrial countries should commit to a very large increase in funding for research in technologies that offer the prospect of reducing the concentration of greenhouse gases, such as renewable energy, carbon sequestration and energy efficient engines. They should also learn a lesson from the pharmaceutical experience and commit to making intellectual property relating to clean energy available to developing countries on preferential terms. It may be that ambitious emissions- reduction targets can be achieved with existing technology, yet new technologies could help.

"Third, the World Bank, and probably the regional development banks, should be reconstituted by their shareholders as “Banks for Development and the Global Environment” and take on as a major mission the provision of subsidised capital for projects that have environmental benefits that go beyond national borders. There is much that can be done to encourage energy efficiency in almost every sector within developing countries, yet national governments have inadequate incentives to take account of global impacts. Moreover, the institutions need a new role with respect to countries other than the poorest ones at a time when the leading developing countries are actually exporting rather than importing capital.

"Fourth, a goal should be set of eliminating by 2025 the more than $200bn the world spends each year on energy subsidies, and enforced through strategies such as those used for inappropriate subsidies in trade. This is a clear case where environmental and economic imperatives coincide and it is one where external political commitment is likely to be desirable in many countries, just as in the trade area. This will require considerable work on the definition of and measurement of total energy subsidies. Such work will lay a foundation for the more ambitious efforts that may be needed in harmonising world energy prices above market levels in the future.

"There is a final critical process element in the policy response. Given that viable solutions depend on significant changes in developing country policies and that these countries are unlikely to make them unless they see their own interests as at stake, it is essential that they be full participants in setting the global direction. They are surely likely to do more if they can help shape policy than if it is simply the Group of Seven leading industrialised nations seeking to bring them along."

We like this kind of thinking at The Green Skeptic.

Read the full article in FT: Summers