[Top News] from [REUTERS]
[Green Business]
Leonora Walet and Sui-Lee Wee - Analysis
HONG KONG
Tue Dec 22, 2009 12:38am EST
State funding fuels China's global push in wind, sun
HONG KONG (Reuters) - When A-Power Energy Generation Systems secured a deal to supply turbines for a U.S. wind farm project in October, the little-known Chinese firm had an ace up its sleeve to help it clinch the deal.
A-Power was armed with $1.5 billion in financing from state-run Chinese banks to fund the 600 megawatt project in Texas.
While global peers have limited access to cheap state loans, Chinese renewable energy firms are getting a boost from Beijing as they win clean technology projects around the world [ID:nHKG361180]. Much of that is via low-interest loans from big state banks for their clients to finance their purchases.
This support is giving China's renewable energy firms an edge over Asian rivals such as India's Suzlon Energy, Japan Wind Development and Australia's Infigen Energy, as well as heavyweights like German polysilicon firm Wacker Chemie and Danish wind energy firm Vestas Wind.
"I don't think A-Power could have done this deal without access to cheap financing," said Jacob Kirkregaard, a research fellow at the Peterson Institute for International Economics in Washington D.C, who recently published a paper on wind energy.
"China is clearly the big kid on the block, no doubt about that," he said, referring to the state support for renewable energy. "That's not something many Asian countries can emulate."
Shares of A-Power, which only entered the wind business in 2008, hit a 15-month high last Friday after it said it will supply wind turbines for the Texas project.
Such deals are unfolding as China aggressively develops its renewable energy sector and as its companies play catch-up with bigger, global peers including German solar cell producer Q-Cells AG and Spanish wind farm operator Iberdrola, which have built up solid track records, also with help from more than a decade of government subsidies.
LOAN BOOST
Most of China's alternative energy makers, including solar firms Yingli Energy Holdings and Suntech Power Holdings, and wind gear maker China High Speed Transmission, already have access to low-interest financing from state-run banks to fund their growth as well as client purchases.
Interest rates on loans for wind power generator China Longyuan Power Group, for example, are 10 percent below the prevailing benchmark rate set by the Peoples' Bank of China (PBOC), said Morgan Stanley in a report.
"Chinese banks are motivated by the mandate from the government to develop renewable energy as a national priority," said Zhao Feng at Denmark-based BTM Consult ApS, a consultancy that specializes in renewable energy.
"In Europe, the banks, when they offer loans, tend to assess the project and look at it more closely from a risk perspective."
Such state-backed financing is a common policy tool for governments globally trying to support industries they want to develop. China also provides similar strong support for its energy firms for overseas acquisitions, and its telecoms equipment makers as they try to expand abroad.
Beijing's support comes as Chinese players attempt to create new markets as the cost of developing renewable energy falls and competition intensifies for projects at home.
China's $300 billion sovereign wealth fund, China Investment Corp (CIC), is also helping to bolster the industry.
In the last several months, the fund has pumped about $1.1 billion into the sector, buying stakes in solar firm GCL-Poly Energy, the world's No.3 polysilicon company by capacity, and China Longyuan, the world's fifth-largest wind power company.
But analysts say access to cheap money will only get China's alternate energy firms so far.
"Essentially, you need to get the product right," said Felix Lam, analyst with CCB International. "Cheap loans can't guarantee a project's success, you've got to have the technology.
"It's the technology that will give you that advantage long-term."
(Editing by Doug Young and Ian Geoghegan)
[Green Business]
MADRID
Tue Dec 22, 2009 10:15am EST
Iberian spot power rebounds on weaker winds, cold
MADRID (Reuters) - Iberian spot power prices rebounded from recent year-lows on Tuesday due to ebbing supplies of cheap wind power while demand held steady as cold weather gave way to heavy rain.
Wind power in Spain -- the world's third-biggest producer -- fell from an overnight high of 10,000 megawatts to a low of 5,400 MW on Tuesday, and was seen meandering on Wednesday and Thursday.
Spain's Met Office issued no high risk warnings for Tuesday, but estimated almost half the country was still at risk from bad weather.
Spanish power stations were meanwhile emitting an unusually high 9,617 tonnes per hour of carbon dioxide, but dealers noted that carbon prices were low after last week's Copenhagen conference and not driving power prices.
Dealers expected demand for power to drop sharply as of Thursday and stay low next week.
"Demand has been rock-bottom, so (spot) prices may be particularly low next week," a trader said.
Sliding crude hauled down benchmark forwards which have been weak since September due to low prices for essential fuels like gas.
Calendar-year 2010 traded at 39.60 euros/MWh on the Omip exchange at mid-session, down 0.45 from a day earlier.
In other news, Spain's hydropower reserves dipped last week and would be enough to meet average demand for 12.7 days.
Spain's grid is still short of 2,000 MW of nuclear power because the Almaraz I plant is refueling and not due back until this week, at the earliest, and Asco I reactor is offline for maintenance until the New Year.
The remaining six nuclear plants were producing 5,341 MW, or 13.6 percent of the generating mix, according to national grid operator REE.
[Green Business > COP15]
Yvonne Bell
BRUSSELS
Tue Dec 22, 2009 10:18am EST
Copenhagen accord was a "disaster," says Sweden
BRUSSELS (Reuters) - Sweden described the Copenhagen climate change summit as a "disaster" and a "great failure" on Tuesday, ahead of a meeting of European Union environment ministers to discuss how to rescue the process.
The European Union went to Copenhagen with the hope of achieving a broad commitment to at least a 20-percent cut in carbon emissions below 1990 levels within 10 years, but that and other firm goals failed to emerge in the final accord.
"Ministers are going to meet today to discuss, of course, how to proceed after this disaster we really had in Copenhagen," Swedish Environment Minister Andreas Carlgren told reporters as he and other ministers gathered for the meeting in Brussels.
Carlgren will chair the talks as Sweden currently holds the EU presidency.
"I expect us to discuss both how to continue ... but also elaborate on possibilities for alternate ways to work now, because it was a really great failure and we have to learn from that."
The two-week, U.N.-led conference ended on Saturday with a non-legally binding agreement to limit global warming to a maximum of 2 degrees Celsius over pre-industrial times, but did not lay out how to achieve that.
Despite months of preparation and strenuous international diplomacy, the talks boiled down to an inability of the world's two largest emitters, the United States and China, to agree on headline fixed targets.
The 27 member states of the EU had gone into the talks with a unified position and with a plan for financing emissions cuts in the developing world, with a commitment to spend around 7 billion euros ($10.01 billion) over the next three years to aid poorer countries.
But those aims were largely sidelined as the talks failed to produce the breakthrough agreement many had hoped for.
"Europe never lost its aim, never, never came to splits or different positions, but of course this was mainly about other countries really (being) unwilling, and especially the United States and China," said Carlgren.
Britain on Monday blamed China and a handful of other countries of holding the world to ransom by blocking a legally binding treaty at Copenhagen, stepping up a blame game that has gathered momentum since the talks ended.
Prime Minister Gordon Brown described the summit as "at best flawed and at worst chaotic" and demanded an urgent reform of the process to try to reach a legal treaty when talks are expected to resume in Germany next June.
But Danish Climate Minister Connie Hedegaard, who quit as president of the Copenhagen talks midway through after being criticized by African countries for favoring wealthier nations in negotiations, said it was no time to get depressed about the process of tackling climate change.
"What we need to do is to secure the step that we took and turn it into a result," she told reporters as she arrived for the Brussels meeting on Tuesday. Asked whether Copenhagen had been a failure, she replied:
"It would have been a failure if we had achieved nothing. But we achieved something. A first step. It was the first time we held a process where all the countries were present, including the big emitters."
(Writing by Luke Baker; Editing by Jon Hemming)
[Green Business]
Leonora Walet and Sui-Lee Wee - Analysis
HONG KONG
Tue Dec 22, 2009 12:38am EST
State funding fuels China's global push in wind, sun
HONG KONG (Reuters) - When A-Power Energy Generation Systems secured a deal to supply turbines for a U.S. wind farm project in October, the little-known Chinese firm had an ace up its sleeve to help it clinch the deal.
A-Power was armed with $1.5 billion in financing from state-run Chinese banks to fund the 600 megawatt project in Texas.
While global peers have limited access to cheap state loans, Chinese renewable energy firms are getting a boost from Beijing as they win clean technology projects around the world [ID:nHKG361180]. Much of that is via low-interest loans from big state banks for their clients to finance their purchases.
This support is giving China's renewable energy firms an edge over Asian rivals such as India's Suzlon Energy, Japan Wind Development and Australia's Infigen Energy, as well as heavyweights like German polysilicon firm Wacker Chemie and Danish wind energy firm Vestas Wind.
"I don't think A-Power could have done this deal without access to cheap financing," said Jacob Kirkregaard, a research fellow at the Peterson Institute for International Economics in Washington D.C, who recently published a paper on wind energy.
"China is clearly the big kid on the block, no doubt about that," he said, referring to the state support for renewable energy. "That's not something many Asian countries can emulate."
Shares of A-Power, which only entered the wind business in 2008, hit a 15-month high last Friday after it said it will supply wind turbines for the Texas project.
Such deals are unfolding as China aggressively develops its renewable energy sector and as its companies play catch-up with bigger, global peers including German solar cell producer Q-Cells AG and Spanish wind farm operator Iberdrola, which have built up solid track records, also with help from more than a decade of government subsidies.
LOAN BOOST
Most of China's alternative energy makers, including solar firms Yingli Energy Holdings and Suntech Power Holdings, and wind gear maker China High Speed Transmission, already have access to low-interest financing from state-run banks to fund their growth as well as client purchases.
Interest rates on loans for wind power generator China Longyuan Power Group, for example, are 10 percent below the prevailing benchmark rate set by the Peoples' Bank of China (PBOC), said Morgan Stanley in a report.
"Chinese banks are motivated by the mandate from the government to develop renewable energy as a national priority," said Zhao Feng at Denmark-based BTM Consult ApS, a consultancy that specializes in renewable energy.
"In Europe, the banks, when they offer loans, tend to assess the project and look at it more closely from a risk perspective."
Such state-backed financing is a common policy tool for governments globally trying to support industries they want to develop. China also provides similar strong support for its energy firms for overseas acquisitions, and its telecoms equipment makers as they try to expand abroad.
Beijing's support comes as Chinese players attempt to create new markets as the cost of developing renewable energy falls and competition intensifies for projects at home.
China's $300 billion sovereign wealth fund, China Investment Corp (CIC), is also helping to bolster the industry.
In the last several months, the fund has pumped about $1.1 billion into the sector, buying stakes in solar firm GCL-Poly Energy, the world's No.3 polysilicon company by capacity, and China Longyuan, the world's fifth-largest wind power company.
But analysts say access to cheap money will only get China's alternate energy firms so far.
"Essentially, you need to get the product right," said Felix Lam, analyst with CCB International. "Cheap loans can't guarantee a project's success, you've got to have the technology.
"It's the technology that will give you that advantage long-term."
(Editing by Doug Young and Ian Geoghegan)
[Green Business]
MADRID
Tue Dec 22, 2009 10:15am EST
Iberian spot power rebounds on weaker winds, cold
MADRID (Reuters) - Iberian spot power prices rebounded from recent year-lows on Tuesday due to ebbing supplies of cheap wind power while demand held steady as cold weather gave way to heavy rain.
Wind power in Spain -- the world's third-biggest producer -- fell from an overnight high of 10,000 megawatts to a low of 5,400 MW on Tuesday, and was seen meandering on Wednesday and Thursday.
Spain's Met Office issued no high risk warnings for Tuesday, but estimated almost half the country was still at risk from bad weather.
Spanish power stations were meanwhile emitting an unusually high 9,617 tonnes per hour of carbon dioxide, but dealers noted that carbon prices were low after last week's Copenhagen conference and not driving power prices.
Dealers expected demand for power to drop sharply as of Thursday and stay low next week.
"Demand has been rock-bottom, so (spot) prices may be particularly low next week," a trader said.
Sliding crude hauled down benchmark forwards which have been weak since September due to low prices for essential fuels like gas.
Calendar-year 2010 traded at 39.60 euros/MWh on the Omip exchange at mid-session, down 0.45 from a day earlier.
In other news, Spain's hydropower reserves dipped last week and would be enough to meet average demand for 12.7 days.
Spain's grid is still short of 2,000 MW of nuclear power because the Almaraz I plant is refueling and not due back until this week, at the earliest, and Asco I reactor is offline for maintenance until the New Year.
The remaining six nuclear plants were producing 5,341 MW, or 13.6 percent of the generating mix, according to national grid operator REE.
[Green Business > COP15]
Yvonne Bell
BRUSSELS
Tue Dec 22, 2009 10:18am EST
Copenhagen accord was a "disaster," says Sweden
BRUSSELS (Reuters) - Sweden described the Copenhagen climate change summit as a "disaster" and a "great failure" on Tuesday, ahead of a meeting of European Union environment ministers to discuss how to rescue the process.
The European Union went to Copenhagen with the hope of achieving a broad commitment to at least a 20-percent cut in carbon emissions below 1990 levels within 10 years, but that and other firm goals failed to emerge in the final accord.
"Ministers are going to meet today to discuss, of course, how to proceed after this disaster we really had in Copenhagen," Swedish Environment Minister Andreas Carlgren told reporters as he and other ministers gathered for the meeting in Brussels.
Carlgren will chair the talks as Sweden currently holds the EU presidency.
"I expect us to discuss both how to continue ... but also elaborate on possibilities for alternate ways to work now, because it was a really great failure and we have to learn from that."
The two-week, U.N.-led conference ended on Saturday with a non-legally binding agreement to limit global warming to a maximum of 2 degrees Celsius over pre-industrial times, but did not lay out how to achieve that.
Despite months of preparation and strenuous international diplomacy, the talks boiled down to an inability of the world's two largest emitters, the United States and China, to agree on headline fixed targets.
The 27 member states of the EU had gone into the talks with a unified position and with a plan for financing emissions cuts in the developing world, with a commitment to spend around 7 billion euros ($10.01 billion) over the next three years to aid poorer countries.
But those aims were largely sidelined as the talks failed to produce the breakthrough agreement many had hoped for.
"Europe never lost its aim, never, never came to splits or different positions, but of course this was mainly about other countries really (being) unwilling, and especially the United States and China," said Carlgren.
Britain on Monday blamed China and a handful of other countries of holding the world to ransom by blocking a legally binding treaty at Copenhagen, stepping up a blame game that has gathered momentum since the talks ended.
Prime Minister Gordon Brown described the summit as "at best flawed and at worst chaotic" and demanded an urgent reform of the process to try to reach a legal treaty when talks are expected to resume in Germany next June.
But Danish Climate Minister Connie Hedegaard, who quit as president of the Copenhagen talks midway through after being criticized by African countries for favoring wealthier nations in negotiations, said it was no time to get depressed about the process of tackling climate change.
"What we need to do is to secure the step that we took and turn it into a result," she told reporters as she arrived for the Brussels meeting on Tuesday. Asked whether Copenhagen had been a failure, she replied:
"It would have been a failure if we had achieved nothing. But we achieved something. A first step. It was the first time we held a process where all the countries were present, including the big emitters."
(Writing by Luke Baker; Editing by Jon Hemming)
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