As a company that routinely sells solar panels for use on satellites, Emcore is used to being out of this world. Yet they have to be a little bit excited by the prospect of their solar panels going to Mars. According to this just published press release;

"Emcore has just won a $2m contract from NASA's Jet Propulsion Laboratory (JPL) Center for the design, manufacturing, testing and delivery of fully integrated solar panels for the Mars Cruise Stage spacecraft. This spacecraft is designed to carry the Mars Science Laboratory (MSL) rover and communicate with the entry vehicle that will carry the rover to the surface of the planet. The launch of the spacecraft is planned for fall of 2009."

This news comes after last week's preliminary Q1 results which showed the solar division to be the fastest growing part of the business. Photovoltaics revenues for the first quarter of fiscal 2007 were $13.2 million - a revenue increase of 23% over the same period last year.

Space is a terrific market for solar power - there are of course no clouds, no air or actually anything to get in the way of the light particles. This translates into massively increased solar efficiency - in Emcore's case, a full 28.5% compared to a more typical 15% back on earth.

Having said that, once you get on to the surface of Mars, this declines rapidly, and way below that of Earth. That's because it is further away from the Sun, there is the occasional dust storm and one can reckon with an average of 590 watts per square metre of solar radiation compared to 1000 watts on Earth.

For the last couple of months, ITM Power, has been bouncing near it's 12 month low. So it was interesting to learn that a non-executive director at fuel cell technology firm ITM Power has raised his stake. Peter Hargreaves spent £336,000 on 280,000 shares at 120p each and now holds 5.67 million shares.

Add to this that ITM's cooperation with the Hydrogen Engine Centre is about to yield fruit. HEC engines are being integrated with ITM Power electrolyzers, to become a stand-alone power generation solution for industrial and residential customers and the first of these engines are to be delivered to ITM this spring.

Since my last post announcing the tie-up between the 2 companies in November, the stock has not done that well, but they have that in common with most fuel cell stocks since the Spring shakeout last year.

What I do like about the technology is that the prototype engine also runs on other more available fuels like hydrogen, propane, natural gas, ethanol or gasoline. And yet, whilst I loathe diesel fumes, breaking into the backup / standalone diesel generator market - as many companies have tried these last few years - appears to be a very tough nut to crack.

US Ethanol production is a tough business to be in right now - as is evinced by the performance of US ethanol stocks since the beginning of the year. They appear to be quite simply out of favour with investors.

Take Green Plains Renewable Energy, who recently lost its CFO, Brian L. Larson, after joining just 6 months ago. They have just announced the results of their annual meeting;

i) Three directors, Barry A. Ellsworth, Brian D. Peterson, and Herschel C. Patton, were elected to serve on the Board of Directors for three year terms. The terms of these directors expire at the 2010 annual meeting.

ii) The 2007 Equity Incentive Plan was approved by the shareholders of the Company

My gut instinct is that investor sentiment will recover vis a vis US ethanol producers in the next couple of years. This will come about when company's like GPRE finally start to bring onstream their two 50 million gallon ethanol plants later this year. Too many alternative energy companies seem more like an idea rather than a product-selling, profit-maximizing organisation. In the long-run, more investors are drawn to the latter.

2nd hand cooking oils - a fast rising feedstock for biodiesel - aren't always lightly cooked extra virgin olive oil from elegant Italian restaurants. As this story mentions, it may include Burger fat from abattoirs.

The company in question - Agri Energy - is planning to invest GBP 50m in a power plant in Wales, that will create 35 megawatts of power in capacity and 200,000 tonnes annually of biodiesel.

The company is clearly leaving behind its Australian bioethanol roots. Most of the world's bioenergy companies have a specific focus in one key area. Agri Energy appears to be going in the other direction. For more details, see there website here.

Centrosolar AG, an otherwise unremarkable German solar company, rose 0.7% today - the company has just received a repeated buy recommendation from Goldman Sachs.

The firm is not short of admirers - like Sven Krupp of AC Research, who gave it an "accumulate" rating at the end of March 2007. And unlike some German alternative energy companies, it is clearly interested in expanding sales beyond its borders. In the last financial year, 29% of consolidated revenue was from outside of Germany. This matters a lot if - as some believe - the political risk of Germany's solar subsidies being cut off is real and on the horizon.

There is at least a risk of it, according to this article by Herb Greenberg, originally published in the Wall Street Journal over the weekend.

As you might expect, Greenberg's arguments are sensible enough;

i) just as in previous technology booms (hard drives, chip stocks etc.), at some point supply will exceed demand and prices will fall

ii) A large chunk of the solar market is in Germany and subsidy dependent - it is possible that one day these subsidies could be reduced or scrapped altogether

iii) either one or both of these could lead to a big fall out in the sector

Actually, I don't doubt that either of the first two will happen. The critical question is when and over what period of time?

There is actually no sign of Chancellor Angela Merkel's government scrapping solar subsidies at the moment and certainly won't be this side of a General Election, not due in Germany for another few years. As for supply exceeding demand and forcing prices down, we seem to be a long way from that too. If ever you want to keep a close tab on solar prices, then look at the solarbuzz indices - not much sign of downward price movement there.

As I've mentioned here before, the irony is that German subsidies help demand to exceed supply and keep prices up. If you were a solar manufacturer, why would you lower prices if you have a captive market in Germany, prepared through the help of subsidies to pay top dollar?

So I'm going to stick my neck out and say that barring a catastrophe (e.g. war between America and China over Taiwan), there will be no major fall in prices and no change in subsidies for the next 5 years. And my gut instinct is that Chinese solar companies will be a lot more competitive than their Western counterparts in the long-run too.

China's economy and stockmarket are reaching new highs and possibly overheating. Is this the end of the party?

It is of note from this article that certain Chinese alternative energy companies. . . high-flying solar names including Trina Solar, (TSL) JA Solar, (JASO) Solarfun Power (SOLF) and Suntech Power sank, with Trina down 12%.

We have all been conditioned to assume continued and massive Chinese expansion. But as I have just written for World Finance magazine, this may prove to be the illusion of our age - although I earnestly hope not. We have derived so much advantage from Chinese mass-maufacturing (not least the laptop I'm using right now) which we are on the cusp of exploiting for alternative energy.

But anthropologists tell us that mankind has an instinctive bias towards optimism and investors must never forget it.

Mechanical Techology, a NASDAQ listed stock who has a large subisidiary, Micro Fuel Cells, has just received funding from the US Department of Energy for $1.8m.

Good for them. But my observation is that micro fuel cells in general have been a huge disappointment. A few years ago, they were heralded as the next big thing after lithium ion batteries. Yet they have not broken into the consumer market, less still anything like as quickly as anticipated. And since the plot to blow up airliners last year using a combination of liquid concoctions over the Atlantic, now you can't take any sort of liquid except baby milk on board. So forgive me if I can't see micro fuel cells containing methanol making it - for at least a while. Quite apart from which, have you ever seen a micro fuel cell powered device or had the opportunity to buy rechargeable fuel cells for you cell phone, camera, etc. and why do you think that is?

When an alternative energy company is really going places, it's not because it is funded by the DOE. And $1.8m is not such a big amount. Perhaps I am being unfair to Mech Tech's subsidiary - see the company's technological progress timeline here. What can be said is that direct methanol fuel cells have certain advantages, namely;

i) methanol is liquid at room temperature, unlike hydrogen making storage easy
ii) methanol has a higher energy density than hydrogen at room temperature

My gut instinct though is that post all the hype, the micro fuel cell market will not emerge for mass consumers, but for niche markets who are not so risk averse, specifically;

a) the US military and b) outdoor campers/trekkers where power has to be portable or not at all.

About 10-15 years ago, I used to visit to East Germany quite regularly. It was a better place to learn German because back then, most Easterners or "Ossis" as they called themselves, didn't speak English. There was also a lot of infrastructure investment going on, although plenty of people weren't going anywhere fast careerwise. Above all, living wasn't expensive there. Since then and particularly with other Central European states joining the EU, East Germany has been emptying of people and private investment has been scarce.

So I was intrigued to read this piece about how Germany's solar boom was leading to a lot of solar company investment in the East. Companies that are mentioned here are Solarworld AG and Conergy AG. One of the interviewees says that according to an article he read, by 2015, there will be more people working in renewable energy in Germany than in the car industry. I find that quite hard to imagine. Right now, directly and indirectly, a quarter of the German workforce is dependent on the car industry. And unlike renewables in Germany, automakers are successful in spite of government regulation rather than because of it.

China Biodiesel, the AIM-listed Chinese firm which sources used cooking oils to produce biodiesel, has just posted much improved annual results; turnover has surged 51.1% to RBM105.3m (Chinese Yuan) for the year with pre-tax profit increasing to £38.8m from £28.2m the year before. Meanwhile their 2010 biodiesel production target has been set at 350,000 tonnes.

"Our focus going forward will continue to be on expanding production to meet demand, in China and abroad, whilst developing our technology and ensuring that the business is managed with maximum efficiency,” said the group.

Oil is a big part of Chinese cooking - and with 1.3 billion people, there's plenty left over nationwide after it's been tossed about in the family wok a few times. According to this concise article on biodiesel in China from late last year;

"In 2005, China manufactured 110,000–120,000 tons of biodiesel fuel; in 2006, production is expected to reach 1 million tons."

and the same article says that potentially, China could recover 2.25m tonnes of used cooking oil for biodiesel. It does appear though that bigger players - like state-owned China National Offshore Oil Corp and foreign investors are starting to move in. Can the likes of smaller independents such as China Biodiesel plc continue to play a growing role against such behemoths?

What is clear is that the recent rise in food prices caused by rising biofuel targets around the world has been deeply unpopular. In China, with it's hundreds of millions of rural poor, this is potentially a much greater problem. That's why many would find it hard to disagree that the biodiesel foodstock of choice in China will be used cooking oils for at least the next few years - environmental pros aside, it is after all the cheapest feedstock.

Sao Martinho, Cosan and Santa Cruz have just joined forces to buy Usina Santa Luiza. The acquired company has an annual sugarcane crushing capacity of 1.8 million tonnes, uses 19,000 hectares of cane plantations on leased land and acquires 200,000 tonnes of cane per year from suppliers.

Sao Martinho's currently crushing capacity of 10.3 million tons a year will get another 750,000 tons from this deal, as they have a 42% share. All in all, there does seem to be some consolidation going on in the Brazilian ethanol industry and so I do wonder how many affordable opportunities there will be for the likes of Clean Energy Brazil plc. Since raising $200m from their AIM float in December, they have already earmarked or spent the cash on investments and some would ask how much market appetite there is to give them more funds.

We can only wait and see.

Nordex AG, has just won its biggest ever contract - from Babcock and Brown for up to 640 MW of wind turbines.

As I blogged earlier, the company has had some growing pains - not least finding enough engineers in East Germany - but setting up a production line in China is so the right side of the future, while their preliminary 2006 results with an increase in sales of 66% is pretty damn good.

Unlike many German alternative energy companies, Nordex has worked hard to get outside of the domestic marketplace and they appear to be reaping the benefits in spades.

KP Renewables is fighting for its life.

They have just reported a pretax loss for the period to June 30, 2006 of 2.27 mln stg compared with a loss of 83,865 stg for the same period a year earlier, on nil turnover.
directors have resigned and bizarrely, their home website www.kprenewables.com has been suspended.

There have been a few alternative energy companies of late who believed they could raise the cash in an IPO and then use that to make alternative energy acquisitions and subsequent returns for stockholders. I'm beginning to have my doubts about this sort of model. It works on the presumption of superior investment knowledge of those Directors over the experts in any of the given fields of expertise of wind, solar etc.

They also face the problem that in alternative energy, there is a lot of money chasing not a great deal of product. So not overpaying for assets and underperforming the market is very difficult to do.

Let's be honest; solar photovolataics are inefficient, highly prone to local weather conditions and above all, very expensive. However there is a school of thought that believes that in new buildings, i.e. where the cost of scaffolding, and erecting a roof are already unavoidable factors in the total cost of a new home, this is where solar pv can make start to make commercial sense.

So news that a subsidiary of Sunpower is building homes with ready-integrated solar power merits closer examination. Is this a trend we are likely to see expand?

If you are spending $400,000 on a new house, with $20,000 included in the price for 2 kilowatts of solar power, this will probably not strike the housebuyer as a big deal. So the consumer will be indifferent to positive. But why as a developer would you do it?

Some solar lobbyists believe that building regulations should be passed to demand solar power on all new homes. I disagree. Solar power must make it on economic and environmental merit, not on government regulation. The danger is with these regulations is that the solar industry will not be forced to find technologies that drastically lower solar costs as they will have a free supply of capital from the deployment of existing technology. Arguably, this has already happened and is together with high silicon prices, why solar costs have not fallen the last few years.

Evergreen Solar is on a big sales roll. They have just increased their sales agreement with Sun Edison by more than 2 and a half times to $510m - and this boosts the total value of Evergreen sales agreements announced in the past 16 months to more than $1 billion.

Since my last post on their disappointing Q4 results, the stock has picked up quite a bit. But the longer term trend since 2003 as I wrote in an earlier post is clearly in the right direction.

What I think is particularly smart about Evergreen is not so much their string ribbon technology, but their partnerships with 2 of the largest silicon producers in the world, Q-Cells and REC - said Evergreen's President, Richard M. Feldt on the relationship;

"The ongoing expansion of EverQ - our partnership with Q-Cells and Renewable Energy Corporation - and a secure, long-term supply of refined silicon enable us to forge long-term customer agreements with solar industry leaders."

Amen to that !

It has been a while since I've had the chance to post about a forthcoming IPO - a shame because historically, IPO Watch has been one of the most popular sections on this website.

So I was pleased for more than one reason to learn of National Hydroelectric Power Corp's plans to sell a 13.8% stake in an IPO to raise $580m. Growing at over 8% per annum, India needs a lot more power and they will need all the capital they can get to obtain it.

Apart from which, I like Hydropower - it is proven technology, can deliver clean energy in gigawatt scale and does so at the lowest possible cost compounded over the lifetime of the plant - up to 200 years. So my personal view is that exploiting fully amortized hydropower is an excellent long-term bet. But selling off only 13.8% of your company strikes me as a bit blasé - and some would unkindly sum up the attitude behind it as this;

we want your money, but we won't concern ourselves with what you think and will care even less, because you will always be a minority shareholder.

I've just been reading a fascinating and revelationary book by Eric D. Beinhocker "The origin of wealth - evolution, complexity and the radical remaking of economics". and I was very taken by one point (amongst many) that he made - essentially that mankind has evolved a system for fairness and reciprocity in business, but if the conditions for reciprocity, fairness and trust are not replicated following the business transaction, then civilization does not advance much beyond the Machiguenga people of the Peruvian rain forest (I abbreviate and exaggerate for effect, but it's not an unfair synopsis).

Why am I saying this?

Because there is another Indian hydropower company Jaiprakash Hydro Power, which although much smaller, continues to earn respect and good ratings, not least because far more of its shares are traded on the open market.

Going public with an IPO is about trusting the market and the investors to have the best interests of your company at heart. That's why deep down, I believe that anything less than a 50% offering is a long-term mistake.

So I hope NHP reconsider and think big by trusting big. And I dearly hope many other alternative energy companies do not eschew the market either.

Because the public markets still leave the venture capitalists and the banks for dust when it comes to raising larger amounts of capital at lower overall cost.

The US Department of Defence is the largest consumer of diesel and distillate fuels in the United States. So O2Diesel investors ought to be pleased that the DoD is now testing O2Diesel's proprietary fuel blend.

This piece of good news comes after a terrible decline since last May's great biofuel sell-off. 2006 results showed the company still to be a long way from profitable - sales of just $250,000 and a loss of $13 million.

Nevertheless, it is still rated as a speculative buy by J M Dutton.

Since its dismal profit warning earlier in March, Biofuels Corp is recovering.And according to this article published yesterday, some brokers suspect that Biopetrol Industries may be looking to take over the company. Biopetrol unlike Biofuels Corp can point to some good corporate results - 2006 sales up approx. 46 % and Group profits up 78 %.

Well if this does happen, I suggest they name the new firm Biodiesel Industries AG. Calling yourself Biofuels or Biopetrol when your core business is biodiesel is just plain misleading.

US Bioenergy, an ethanol producer that IPO'ed last December has announced a very successful Q4 - sales were up 10 times on Q4 2005 and it was also a profitable quarter.

This should all be very encouraging except that US Bioenergy is trading below its IPO price of 14, while the price of oil has crept back up to $65. Investors may have fallen out of love with ethanol, but it does appear that there is not a great deal of correlation between the price of oil and the price of ethanol stocks. Instead ethanol stocks have been much more affected - as per this concise article on Motley Fool to;

i) the uncertainty surrounding future demand for ethanol
ii) the risk of higher corn prices
iii) concerns over long-term profitability for the major players in the market.

Ultimately, the greatest failing of conventional first generation ethanol technology is one of scale. It has been estimated that the absolute that can be produced today from ethanol - if everyone pulls out all the stops - is 5 million barrels a day. That's just not enough to make any serious impact on global consumption of approx 86 m barrels a day, still rising at 1 - 1.5 m barrels a year.

You have to wonder about Spire - when the rest of the solar industry is booming, they have just reported a widening Q4 loss.

So news that they are going to work together with Germany's KUKA Schweissanlagen GmbH to combine their machine technologies to meet growing demand for fully automated large-scale photovoltaic (PV) manufacturing lines is 2 steps in the right direction;

i) the economies of scale in solar manufacturing have been self-evident for a long time
ii) it gets them additional exposure to the German marketplace - approximately 80% of world demand

Since my last post on Spire back in September when I saw similarities in their role to those who sold the shovels in the Gold Rush, the stock has clearly done well. But it must be disappointing to the managers as well as the stockholders, that for a company that prides itself on being part of the solar business since 1980, that they are not much bigger and at least profitable.