Solon AG has just produced a movie style commercial which I have to say is very watchable and very original.

Take a look at it here . . . click on "skip intro" then "watch the movie" - you need the sound on too.

I don't want to spoil things, but I do think their calculations involving 1.5 volt batteries are more than slightly out . . . such a battery should give you 3.75 watt hours. On average around the world throughout the year, let's say you get solar radiation of 1300 watts per square metre (or at least the hotter parts of the world). That should correspond to about 347 1.5 volt batteries - at that level of solar radiation, falling on the hour per square metre, for each hour. Also solar pv efficieny of around 15% means that only 52 of these batteries will get used.

So when you've seen the movie, perhaps you'll agree it's not quite what they portray, but you have to forgive their dramatic license !

According to newratings.com, Analyst Heather L Jones of BB&T Capital Markets has in a research note published today, given VeraSun and Aventine Renewable Energy holdings both a buy rating.

VeraSun gets a buy because the company is competitively well positioned on account of its sound management and comparatively sizeable scale. And Aventine because of the company’s large marketing scale, low-cost profile and management represent major competitive advantages.

No doubt about it, we have been going through an ethanol boom - as decribed in this google video. A more sceptical view was recently expressed by a Swiss Bank - Sarasin - who said that the ethanol boom was unsustainable for two reasons;

(a) insufficient land to support corn grown for both food and fuel

and

(b) an insufficient market for the byproducts of ethanol production.

I think Sarasin is probably right. The mistake though is to assume that if a technology like ethanol cannot be all of the solution, that it cannot be even a part of the solution. Bioethanol and biodiesel make up such a tiny fraction of transport fuels in the USA, that a growth to double digits - say 10% and no further - represents an enormous growth opportunity between now and then.

Iberdrola and Gamesa who are partners in a venture called Nuevas Energias Ibericas (NEI) plan to go to court to ask for the suspension of the tender process for wind farm licences in Portugal and seek re-admittance to the auction.

If you're wondering why they're so desperate to get back into the game, it's because this is a huge contract. It is a two-phase 1,500-megawatt project which will at a stroke, more than double wind power capacity in Portugal, among world leaders in installing new wind power in 2005.

Meanwhile, Ibedrola and Gamesa - both Spanish companies - must be smarting from the fact that they would not win a contract on home iberian turf.

As I touched on these pages a week ago, although it is the biggest wind company in the world in a booming industry, Vestas is in a tight spot.

Citing component delays, a weak dollar, warranty provision and a patent dispute, Societe Generale believes all of these could prevent the group from reaching 4%-7% margin (not very much even then) in 2006. Consequently, they are holding on to their sell rating.

I tend to think that the future of manufacturing is no longer in Western Europe, less still, Scandinavia. Suzlon is making inroads and rightly so. As someone who admires and agrees with much of Thomas L. Friedman's book "The World is Flat", I tend to think that if you're not doing everything at lowest possible cost with the highest possible service, your potential customers either already know or will do very quickly.

Whether you like it or not, in a transparent world market, high cost, high tax countries like Denmark, will never manufacture wind turbines at a competitive price, no matter how good your management is.

Aventine Renewable Energy has just taken another knock. This time, it is because Soleil Securities has downgraded Aventine Renewable Energy from Buy to Hold with a $25 price target.

This comes less than a week after Analysts at DE Research gave the company a "neutral" rating with a target price is set to $32.

There has been quite a shake-out in the ethanol sector over the last couple of months. Confidence in the sector has been tested by the Xethanol share sleuth story and some hard questions about how big an impact biofuels can make, given existing agricultural resources and rising energy demand.

It has to be said though that biofuels are still at their very beginning and whilst scaling up is going to be difficult, the external pressures that work in their favour such as high oil prices and middle eastern security concerns are not going away any time soon.

Writing in The Business today, I made the point that people are generally far more scared of terrorism than climate change and rightly so.

Even if you believe the worst case scenarios, most people would be relatively untouched by climate change, warming the atmosphere a few degrees or 6 by 2100. And if you're a technological optimist like me and have read "The Singularlity is Near" by Ray Kurzweil, there really will be almost no problems that we can't solve by that date, if not decades before. The risk though of a weapon of mass destruction in the hands of at least a few terrorists seems to move ever closer.

The far better argument to make for alternative energy is based on drying up the fee supply of capital to oil rich nations in the Middle East who then use it to fund Madrassahs, terrorism, undermine Liberal Democracy abroad and keep their people repressed at home. Whatever you may think of the Iraq War, the irony is that because it has inadvertently added a good 15 to 20 dollars to the price of a barrel of oil, the indirect consequence has been to partly-fuel an alternative energy investment boom.

Hoku Scientific, originally a fuel cell membrane developer, is now pushing ahead with its solar expansion.

This is a 2 step expansion plan which paves the way for some vertical integration;

Step 1: build a polysilicon production plant in Hawaii (where the company is located) to provide their own internal supply of the material for photovoltaic cell production as well as to supply the market in general.

Actually I think this is quite shrewd, although highly capital intensive- too many solar pv manufacturers have been held hostage by the supply shortage of silicon

Step 2: "Hoku Solar" - the solar division - then enters the photovoltaic market through the manufacture of PV modules derived from the polysilicon factory with an initial capacity of 30 megawatts per year beginning in the second half of 2008

Nevertheless, silicon wafer production is starting to pick up - it takes about 2 years to get a Fab up and running and quite a lot Fabs will be coming online in the next few years. Are we looking at a silicon glut in 2010?

Suzlon Energy - the Indian Wind Company listed on the Bombay Stock Exchange - has just landed orders from Italy and Portugal for supplying 29 2.1 MW wind turbines.

As far as foreign markets were concerned, Suzlon has already had some success in the US market. Breaking into Europe like this and beating European manufacturers to a supply contract is very promising. This deal could be a spin-off from the European Wind Energy Association's EU-India Wind Energy Network . My guess is that this is going to benefit India a lot more than the EU !

According to the website, " . . .the main objective of the 36-month project is to facilitate partnerships among wind energy actors in Europe and India. Indian industry stands to gain improved technological collaboration, cheaper capital and outsourcing opportunities, while European industry will have improved access to the Indian market and the exciting returns it offers."

I think it's highly doubtful that any European wind turbine manufacturers will succeed in selling into the Indian market. But for India, greater access to the European marketplace and it's intellectual and financial capital, is upside all the way.

I sometimes think that far too many German solar firms are far too concentrated on the German market. The solar PV market is still to develop internationally. That's why Solon AG's latest half-yearly figures showing a major increase in exports are for that alone - impressive.

Apparently, the export share of total revenue was increased to more than 35%. The development of the project business in Spain made a particular contribution where SOLON is currently installing a number of solar power stations with SOLON Movers.

Active Power has just made a 7 Megawatt sale of its energy storing flywheels to a North African Sugar Refinery. The value of the sale is put at above $2 Mln.

Electro Energy Inc has just reported much improved Q2 earnings.

Michael E. Reed, CEO of Electro Energy, commented, "This was a very exciting quarter for Electro Energy. As a leading participant in the nationwide push for Hybrid Electric Vehicles and Plug-in Hybrid Electric Vehicles this Spring, we worked with the California Cars Initiative to adapt a Toyota Prius as a prototype PHEV powered by our proprietary bi-polar NiMH battery. The prototype vehicle was demonstrated at several high-profile events and received a significant amount of positive press attention. We have demonstrated how various electric vehicles can benefit from our batteries, which are stronger, lighter, longer-lasting, lower-cost, more flexible and more environmentally friendly than those of our competitors. While advancing this PHEV effort led to a significant increase in our developmental expenses, we believe these investments have established a vital platform for growth in a major target market."

I've yet to see the "Who killed the electric car?" movie-documentary - but it already has quite a following on the internet. According to this wiki, in the film's conclusion, the only suspect to reach a "Not Guilty" verdict are the batteries - Electro Energy have got to be pleased about that !

Everyone else; consumers,oil companies, car companies, government, California Air Resources Board and Hydrogen fuel cells are all deemed to be guilty.

Vestas Wind Systems has fallen 2.25 to 169.75 today on profit taking. It may also be something to do with the sell rating given to it by Jyske Bank a week ago.

The wind turbine maker will report its first-half earnings this Thursday. It's hard to overstate the importance of this - Vestas, the world's largest wind turbine manufacturer, is almost a bellweather for the European Wind Industry. Although the sector continues to boom, manufacturing turbines - in Europe - is not a high-margin business.

In 2004, Vestas' gross margin was just 2.4%.

Fresh from it's expansion into the Japanese market by buying MSK Corp, Suntech Power has just announced plans to spend around $60 million to build a research and development plant outside Shanghai, a senior company executive said on Friday.

In a market that is already hot, Suntech is really going places. The company has a 70 percent share of total production of its type of products in China and its global market share is expected to reach about 7 percent this year, up from 5 percent in 2005.

I'm convinced that Chinese manufacturing will pave the way for a much wider scale adoption of solar pv. China already has the lowest cost solar thermal technology by far.

That's why Suntech is definitely a solar stock to keep an eye on.

Phoenix Sonnenstrom AG advanced 56 cents today, or 3.5 percent, to 16.71 euros. The shares surged as much as 11 percent after HSBC Holdings Plc rated them ``overweight'' in new coverage on expectations for ``healthy profitability.''

Phoenix is in the wholesale side of solar power for complete solar power systems, solar modules and inverters. I always find it instructive where possible to look over earlier ratings and the reasons behind them - like this one almost exactly a year ago by Deutsche Bank. Then it said . . . Phoenix Sonnenstrom (PS4.XE) a buy with EUR16.60 target . . . a leading German photovoltaic distributor next to Conergy (CGY.XE), it says. Sees company well-positioned, with a strong brand name and a highly scalable business model. Believes political support and regulatory changes for photovoltaics should allow for 25%-30% market growth until 2010.

So it's interesting to read that their half-yearly figures released last week were 16.4% lower than the year before. But Deutsche Bank's 25 - 30% annual growth figure is looking spot on - 2005 sales were EUR 111 million and this year the sales forecast is EUR 140 million.

Fuel Cell Energy has just landed an additional $2.5m to to complete a land-based demonstration of its ship service fuel cell (SSFC) power plant and begin design work on a next generation ship-based prototype.

What singles out FCE from many other fuel cell companies is that they view the Hydrogen Economy and its associated infrastructure as decades off. So they are concentrating on an interim solution - direct fuel cells DFCs. These fuel cells are typically stationary power stations that can do the reforming (extracting the hydrogen) themselves, using a mixture of off the shelf fossil fuels.

In the case of the US Navy, FCE has adapted its DFC technology to run on naval liquid fuels - diesel and jet fuel.

As I've commented on this site before, the silicon wafer shortage has been a major bottleneck for the solar pv industry, ramping up prices of silicon for solar module manufacturers. Now this bottleneck appears to be reaching an end . . .

News that Sunways AG has entered into a 10 year contract (from 2009) for 70 megawatts per year of solar cells is to be welcomed. It secures and fixes supply that much further into the future, freeing up resources for the company to concentrate on other parts of the business. This saves Sunways from buying silicon on the spot market - the worst value place to buy anything in times of shortage.

Quantum Fuel Systems Technologies Worldwide - also known as just Quantum Technologies - has just announced that it has supplied an as-yet-unnamed fuel cell bus manufacturer with its next generation hydrogen storage technology.

I'm guessing that might well be Mercedes or GM?

GM owns a 19.9% stake in Quantum and so this company is really a bet on near-future hydrogen transport. Quantum is a very scientific company that sees itself as a core component supplier in the hydrogen transport arena, specialising in the design and manufacture of the accompanying systems that run in tandem with a fuel cell vehicle to Original End Manufacturers.

I've travelled quite a few times on a Fuel Cell Bus in London - they are smaller, much quieter and the bus drivers love them. Mechanically, they are more reliable using fewer moving parts. The tough question though is one of cost £900,000 a pop, compared to £200,000 for a bendy bus which carries twice as many people - and range - a mere 100 miles.

Babcock & Brown Wind Partners have reached an agreement with NZ Windfarms, an offshoot of Christchurch turbine manufacturer Windflow Technology, to build a NZD 80 million wind farm - Te Rere Hau.

New Zealand has some of the best sites in the world for windfarming. The circumpolar winds of the Roaring Forties blow unchecked by land until reaching New Zealand and the airstream is then accelerated further by their mountain ranges. This translates into load factors of up to 55% - double the norm.

So windpower in NZ has tremendous scope for low cost expansion. Hydropower is the cheapest form of electricity generation (at least levelised over a lifetime or as a production cost) bar none and contributes the lion's share of NZ electricity. In 2003, of 41 billion kWh of electricity generated in NZ, 58% was hydro, 24.5% gas, 7.6% coal, 6.7% geothermal, 2% wind and 1.3% biomass.

With NZ's hydropower potential now fully exploited and imported gas now at record prices, the case for wind in New Zealand has never been better.

Q-Cells AG, has just raised its 2006 forecast after posting a 153-percent rise in first-half earnings.

The company, which is the 2nd largest solar cell market in the world after Sharp, also said it would increase its production capacity to a 432 megawatts peak by the end of 2007 after the completion of the first two expansion stages of a production line. At the moment, production is at 280 megawatts, so this is a big increase.

Germany's solar boom is clearly continuing - like all booms - much longer than anticipated. If there are clouds on the horizon, I'd identifiy these two threats;

i) A change of government (i.e. a working majority for Chacellor Merkel) which cuts back solar subsidies, specifically the feed-in tariff
ii) The rise of China as the lowest-cost solar cell producer

My guesstimate is that these will both start to bed in by 2010. It's not a complete exaggeration to say that other than machine tools, the rest of industry is still clearing out of Germany. Yet Q-Cells AG has a plant in Thalheim.

VeraSun Energy Corp has just posted much improved Q2 results on 2005 - quarterly profits of 19-six (m) million dollars or 29 cents per share.

The South Dakota-based company is attributing its revenue growth to increased capacity and higher prices. Its Fort Dodge, Iowa, plant added 36 million gallons of capacity and a per-gallon price of one dollar and four cents higher than during the second quarter of 2005.

It has also been noted elsewhere that Bill Gates now has a large stake in Pacific Ethanol. But Bill Gates is not Warren Buffet. Brilliant as he has been in his stewardship of Microsoft, no one is yet proclaiming him to be an investment guru.

So potential ethanol investors would do well to look at this well-balanced piece published in Barron's yesterday, before succumbing to the stardust of celebrity or big name investment.

Hydrogenics has just closed a deal with American Power Conversion for a sale of up to 500 fuel cell modules for integration into APC's InfraStruXure architecture, which is used as a backup power generator.

Hydrogenics had developed a niche, some would say a monopoly, in testing, control and diagnostic equipment to the world's fuel cell industry. This has no doubt given them enormous insight into what works and what doesn't. And perhaps this is now starting to translate into their own fuel cell production business . . . no question, they are pleased about the order. Here's a quote from the CEO, taken from the full press release on their website below.

"This is a tremendous opportunity for Hydrogenics to continue our development of a commercial fuel cell product for an identified high potential market that can start reaping cost-effective benefits today," said Pierre Rivard, President and Chief Executive Officer of Hydrogenics. "Securing this largest single order to date for fuel cell units is a great show of confidence from a world leading NCPI systems provider- not only in Hydrogenics' products and expertise, but in the first-mover opportunity that fuel cell technology provides. The order was achieved in part by setting a new industry benchmark for volume production, enabling significant cost reductions that can be passed to the customer. Here is proof that the fuel cell industry has made real progress in getting to a pricing structure that offers commercial potential for substantial and growing markets."

Buoyed by the news, Hydrogenics closed up over 4% today at 1.71.

According to newratings.com, RBC markets yesterday produced a research note on Evergreen Solar. The analysts mention that the company’s total product gross margin is expected to decline to under 10% by the end of 2007 and this along with other issues is seen as grounds for concern.

For all that, what Evergreen has got absolutely right is to take a bet years ago on silicon prices rising and offering a "silicon lite" approach to solar power.Their patented string ribbon technology allows them to use half as much silicon - typically up to 60% of the cost of the raw material inputs.

If silicon prices had even just stayed at $15 per kilo as they were in 2000 instead of reaching $60 and sometimes much more, the massive increase in solar production would have seen some substantial price falls. Instead, we have seen solar module prices remaining fairly constant at between 5 and 6 dollars per watt, according to the Solar Buzz Index. And I might add, government subsidies for solar across the globe have played their own perverse role in this. They actually served to not make it in the interests of solar producers to reduce costs by crowding out more price competitive solar solutions.

The great solar silicon shortage - I am told - will last until 2008. So could we be heading for a silicon glut after then?

That really could give us some falling solar prices at last.

Evergreen closed down today at 8.66 a share.

Or so this article here believes;

"The EU biofuels policy currently relies on an assumption that the heavily-subsidised cultivation of rapeseed will meet its biodiesel targets. However, this is a very large assumption. Already some 3 million hectares of agricultural land across the EU, an area roughly the size of Belgium, grows 10 millon tonnes of rapeseed. But since just 20% of this is ultimately used for biodiesel as opposed to food oil, another whole Belgium would have to be covered in the yellow rapeseed blanket to meet the targets."

. . . which seems realistic to me. The piece then goes on to extol the virtues of D1 Oils plc, who are betting that Europe will need to buy in biodiesel at low cost from abroad and so they have put their faith in the Jatropha tree; a hardy, fast-growing plant, whose beans can yield a lot of oil which can be refined into biodiesel.

The flip side is that Europe, i.e. the EU, has a history of missing its targets on all sorts of issues. It's a big assumption to think that Europe will do everything to meet a given target. Cynics and Optimists could both argue that targets are sometimes believed to be more effective, when they are set far beyond what is actually possible. This achieves the optimum outcome although the poicy is deemed to be a failure.

Active Power, has just announced a new deal equal to 4 Megawatts of power systems to support the air bridge infrastructure and service two main terminals at a major international airport being constructed in Asia.

It's slightly odd that they don't specify which airport in Asia. But airport power backup is turning into a niche market for Active Power -one they are already active in. According to Jim Clishem, President and CEO of Active Power “Airport applications are quickly becoming a significant vertical market for Active Power, we currently support airports in Europe, the Middle East, Mexico and the Czech Republic, to name a few”.

Following an earlier post of mine about the ramping up of Chinese solar production, here's an example of how this is happening.

Suntech has just announced a formal agreement to buy MSK . MSK is a Japanese company, with (according to their website) has ". . . more than 20 years in the solar business. Our multidisciplinary team of solar engineers have designed and manufactured thousands of solar systems. Our range of high-efficiency solar modules feature excellent build quality and proven performance in the field".

So in other words, Suntech is buying into a lot of intellectual property and human capital in order to position themselves at the top end of the market.

One of the emerging realities of biofuels, is that the best place to grow them economically, tends to be in the developing world - not in the Midwest, let alone in Western Europe.

So the news that Golden Hope Plantations expects to produce 400,000 tonnes of biodiesel by 2008, delivered as it were in a no big deal way, says a lot. That the company expects to start shipping biodiesel this August to Japan says a lot more. And the Chief Executive, Datuk Sabri Ahmad, is certainly confident about GHD's prospects. Said the CEO;

"We see the opportunity in biodiesel. We have the opportunity to develop the new industry to become the world leader in terms of supplying biodiesel".

Just in case anyone was in any doubt of the importance of windspeed to a windfarm's power output, here is exhibit A.

Babcock & Brown Wind Partners (as listed on the Australian Stock Exchange) said it had generated 100 gigawatt hours less than forecast and generated $10 million less revenue mainly because of the delays in three Spanish wind farm acquisitions, but also because the wind did not blow in May and June.

Low windspeed years can always happen, which is why global diversification of wind assets is so vital to consistent returns.

The wind is always blowing somewhere in the world.

Suzlon Energy, India's wind giant, is likely to invest Rs 14 billion in 2006-07 across three plants in India. The company plans to raise its wind turbine manufacturing capacity to 4200 mw from the current 3300 mw in the course of this fiscal year.

According to a recent report "Here comes the wind" by Tom Astle of National Bank Financial, Suzlon sticks out from the other wind turbine manufacturers, because its operating margin and gross are twice that (22% and 38%) of it's nearest competitor - Gamesa. And yet Suzlon still only has a 6% world market share.

That's why Suzlon is one company well worth paying attention to in the years to come.

Electro Energy was visited today by Senator Lieberman, better known outside of America as the other half of the Kerry ticket for the 2004 Presidential elections.

Electro Energy was giving the Senator a close-up of its plug-ih hybrid batteries- which are rechargeable bi-polar nickel metal hydride batteries. The genesis of the plug-in hybrid vehicle is fascinating. Plug in hybrids are hybrid vehicles such as the Toyota Prius, that have had extra batteries fitted, in order to run much further on pure electric power. The extra batteries would simply be plugged into the mains for charging up overnight. These batterie are heavy of course. To give you some idea, the energy density of one litre of gas/petrol is 13,000 watt hours. The equivalent for a lithium ion battery is 200 watt hours.

That's probably why Toyota initially rejected the plug-in idea out of hand. So it was taken up by enthusiasts who with their own success at reverse engineering the Prius, managed to turn the debate right around.

You will hear lots of cynics who claim that a diesel is far more fuel efficient and less CO2 emitting than a hybrid. What they ignore or don't admit is that particulates from diesel exhaust are far more dangerous than CO2 emissions (if dangerous at all), especially in cities, where road speeds are low and congestion is high. A very high proportion of any city's air pollution is from diesel combustion engines.

A Toyota Prius might run just run 1 mile on the battery alone. A plug in kit enables it run up to 30. This is ideal for citiy journeys.

Electro Energy therefore, not only seems to enjoy political support, but appears well situated to take advantage of the near future roll-out of plug-in hybrids.

AEI takes a global tack on the evolution of alternative energy. So that's why the latest world rankings as compiled by Ernst & Young merit close attention. The top 10 are;

1. Spain
2. USA
3. India
4. UK
5. Germany
6. Italy
7. France
Joint 8th - Portugal and China
Joint 10th - Ireland and Canada

As this article confirms, opportunities are now dropping off in Germany "a result of the declining availability of good sites for wind turbines" (as touched upon in my previous blog). If these attractiveness indices have a weakness, it is that they only cover 20 countries out of the world's total of 193.

Apart from that, the background story to absorb is that policy frameworks and economic systems are at least as important to the development of alternative energy as the actual underlying cost of the plant itself. The most inexpensive windpower in the world is produced in Texas (which just surpassed California in nameplate capacity) at 5 cents or less per kilowatt hour. The most expensive wind is in Germany at around 10 cents per kilowatt hour. The plant however is often identical. The cost of doing business in Germany, the high level of subsidy and low windspeeds would not be competitive in the US electricity marketplace.

International investors therefore need to keep a close eye on the political climate's conduciveness to alternative energy.

No technological evolution has ever been completely independent of politics.

France has the highest penetration of nuclear power - up to 80% of annual terawatt hours consumed- pretty much the highest in the whole world. So it's fascinating to watch the progress of Theolia, France's sole listed wind energy company faced with the Wind Industry's traditional enemy.

Just yesterday, they formally transferred over to the Euronext Eurolist B market. This means a new ISIN (FR0000184814) and stock code TEO.

The news follows on from their acquisition a couple of weeks ago of a 30 MW wind farm project in Fruges, in the Somme department of Northern France. Theolia will own a 60% stake in the 30 MW project, including pre-emptive rights to the 40% held by local partners.

The aims of the company are tied in with the ambition of the French Government. Theolia aims to reach an installed capacity of 100MW by the end of 2006 and to build an additional 150MW per year until 2010, i.e. 550 MW. The French government has set a target of installing 10,000MW of wind capacity by 2010, so Theolia would theoretically have a 5.5% share. Not very much in the grand scheme of things, but a big jump from where they are now.

Just recently, the French government also announced increased feed-in tariffs for wind that would be comparable to Germany.

I would however bet a lot more on the returns generated on a French windfarm than a German one. Why?

Because France is a much windier place in general, starts from a lower base with far more virgin land to exploit and French planners love infrastructure. There are no famous winds in Germany that are given names like the Mistral, the Marin or even the Transmontana. And there really isn't much room for onshore expansion. Windspeed matters because it hugely affects the power curve of a wind turbine; every doubling in the speed of the wind multiplies the turbines power output by 8 times. Germany is actually a pretty dismal location for windspeeds and Southern Germany is terrible. That's why German wind subsidies are so high and future expansion is almost certainly going to be offshore where windspeeds are higher.

France though has only just got started.