Acta Spa, an Italian fuel cell developer listed on London's AIM, which makes platinum-free HYPERMEC branded catalysts, is turning in some much improved results.

The company says that revenues in the first five months were ahead of expectations, and were more than double the level for the whole of 2006.

Acta also can report progress with its next generation of catalyst, the Hypermec 3 which in tests showed it had 70 percent more power than Acta's previous version. See this interview with Acta's Chief Operations Officer from March this year in the Wall Street Journal. Said Woolrych, the COO

"We've positioned ourselves at the forefront of a trend . . . we're in the right place at the right time. All the car manufacturers are keen to move towards non-carbon energy in the next 10-20 years".

That's quite a bold statement. I think some manufacturers like Porsche or Ferrari will never use non-carbon energy. Still, given that Acta is still a small company, the upside for them if just one medium-sized manufacturer uses their catalyst has to be substantial.

As I remarked in an earlier post, the fortunes of Acta are closely tied to the price of platinum. And right now, the mid spot price is $1289. Apart from making the case for platinum free catalysts, the ramp in platinum prices has had other effects too. Platinum is now vying with gold for wedding or engagement rings !

Alternative energy watchers are all too aware of the polysilicon shortage on solar pv. But here's a similar angle that plays in the wind industry that we don't hear much about - fibers, the feedstock for turbine blades. And Vestas, the world's no. 1 wind turbine is taking action by closing a long-term supply deal with Zoltek.

Zoltek expects to provide Vestas with over $300 million of carbon fiber and carbon fiber materials over the first five years of the agreement, for the manufacture of rotor blades for wind turbine generators. Zoltek also anticipates expanding nameplate carbon fiber capacity from 2,800 metric tons in 2005 to 10,800 metric tons by early 2008.

There is a professional difference of opinion over the merits of glass fiber or carbon fibers for wind turbine blades - see this detailed anonymous article which disparages Zoltek (not least because back in April, he was shorting it) here. Zoltek is obviously in the carbon fiber camp and supplies Gamesa as well as Vestas. On the other side exist LM Glasfiber who supply - you guessed it - glass fiber turbine blades to Enercon, GE, Siemens, and Suzlon.

Broken turbine blades are worryingly frequent - perhaps this is ultimately why commercially available turbines cannot seem to surpass a size of 5 MW, because the blades are just not strong enough. If and when that does happen, maybe through nano-engineering, then 40 MW turbines become possible and the price of windpower will plummet like it did in the 1990s again.

A useful piece just published here on Motley Fool Scouting the latest IPOs.

The article mentioned 5 companies that touch on the alternative energy realm about to IPO or that just have;

i) Clean Energy Fuels Corp - a company that seeks to provide natural gas for municipal transport needs. Gas is certainly much cleaner and an environmental benefit in terms of reduced particulates. And I've got a lot of sympathy for this technology as I use it myself (liquified petroleum gas or LPG in Europe) with my old BMW. But unlike some, I would never claim this was alternative energy technology any more than including clean coal technology companies.

ii) LDK Solar - a Chinese solar wafer manufacturer, going public this week. There are plenty of Chinese solar companies already but analysts are divided on whether this party has only just got started or if it is now looking like a bubble.

iii) Yingli Green Energy - (no website I can find) another Chinese solar cell manufacturer, to IPO shortly - announced deal terms of 29 million American depositary shares at $11-$13 per share. The lead managers are Goldman Sachs and UBS.

iv) Imperium Renewables - A US-based biodiesel producer

v) China Sunergy (no website yet, to be added very shortly to AEI) - IPO'ed a couple of weeks back and makes solar cells.

In recent weeks, many have been fretting about the alternative energy bubble. But since alternative energy stocks first started to appear, arguably in the late 1990s, there have been several pullbacks or more accurately, shifts of investor focus;

Fuels cell stocks led by Ballard until 2000
Danish and German wind stocks
US-based ethanol stocks until April 2006
German solar stocks
And now it seems to be Chinese solar cell manufacturers are in vogue

So we must never fail to keep asking ourselves how long will this particular alternative energy theme last and what's next?

Sunways AG +24.12%
The news (from 21st May) is that Sunways AG is expecting delivery of two reactors for
the production of polysilicon in June 2007. Together with Solmic and other
suppliers, Sunways AG has assembled the complete equipment required for
production activities after of the so-called "Siemens process". The reactors
operating in accordance with this method have a capacity of 300t/a and will also
enable the production of monocrystalline silicon.

Camco International +21.9%
The news is that its wholly-owned unit ESD Ltd, has won a contract worth around 650,000 stg to provide 45 local authorities in the UK with advice on how to reduce their carbon emissions.

Millennium Cell +20.97%

Medis Technologies +15.87%

Alkane Energy +12.68%
The news is that Alkane has signed a contract with Dutch emissions trading company Carbon-TF to verify all or part of its last seven years' carbon emission savings, totaling several million tonnes of carbon dioxide equivalent.

Ok, this is extraordinary news.

A dynamic and successful Indian Wind turbine manufacturer - Suzlon - has outbid a French nuclear company - Areva - for control of a German wind turbine manufacturer - Repower Systems AG.

Talk about chutzpah!

I've had my doubts about this deal - I still do. But Suzlon's rationale behind it is the following;

i) REpower will give Suzlon access to high-value, high-capacity turbines ranging between 1.5-5 MW
ii) These are more likely to generate sales in developed countries
iii) They will also get Repower's technology for offshore turbines

All of that makes sense enough. Although a distinguished economist I was speaking to recently thought that many takeovers and mergers fail because those firms omitted to conduct an audit of the intellectual property assets. This has often led to an exercise in brand destruction - think of Daimler Chrysler. Mix up high-quality, medium production runs with low-quality, high production runs and what happens to the brand name?

Obviously, this isn't a like for like comparison. But I tend to think that organic growth is a better path in manufacturing. 2 years from now, we'll have a much better idea of whether this takeover has really worked - or not.

Suzlon is nothing if not determined to take over Repower Systems AG.

Sources close to the company said it had organised funds worth €625 million (Rs 3,408 crore) through two bridge loans, a €325 million (Rs 1772 crore) 10-month tranche and a €300 million (Rs 1,636 crore) 18-month tranche. ABN Amro is the lead manager for the fund collection.

I've been an admirer of Suzlon for some time - there's something hugely admirable about an Indian firm that turns up and blows a whole lot of competition out of the water, whilst impressing the analysts with its high double-digit margins.

Yet somehow I sense that they are losing focus in their quest for scale - e.g. the interest in solar power and biodiesel, the unwelcomed takeover bid for Repower Systems AG and above all, the declining margins - EBITDA margin stood at 17 per cent at the end of Q4 FY07 against 26 per cent in Q4 FY06.

FORBES, 21st May: Vestas Wind Systems, has just won high praise from New York's Reputation Institute, which has just published global reputation rankings of 600 companies, for improving its reputation. Vestas has jumped 25 places for 2007 from 2006 to become the 17th most reputable company in their universe.

To paraphrase the article . . .

This has been put down to the late flowering of a merger with NEG Micon which didn't work out well in 2004/2005. Since then, a new CEO and senior leadership team have been put in place and last year was the first time the company turned a profit. Said Kruse, Vice-President of Vestas Communications, the company has also benefited from a global media strategy--instead of focusing communication efforts on Danish media, it's reaching out to the international media. The company was recently featured in Newsweek, CNN and Bloomberg Television.

Ok, well that secures Kruse's job then !

Seriously though, I have my doubts about global reputation rankings because unlike profits or losses, a reputation is not actually something you can put a black and white number on. Could you imagine a blue chip accountancy firm doing a reputation audit?

And I'm not too sure about Gazprom - the state-owned Russian hydrocarbon firm and arguably the right arm of President Putin's foreign policy - jumping 289 places to rank 28th in the world for 2007.

Investment may be an art rather than a science, but reputation is a truly intangible, immeasurable asset. I could just see disproportionate lobbying by PR firms really distorting the picture, which of course they would love to do. My feeling is that alternative energy companies - like any other - would do best to concentrate on making profits. After all, why would any company not choose to have a good reputation?

Helius Energy, our sole biomass stock, today rose on news that has appointed McBurney Corp and Morgan Est PLC to carry out pre-engineering work on its flagship 65-megawatt biomass power plant in Stallingborough, Lincolnshire.

Pre-engineering work incidentally includes combustion trials, confirmation of the biomass fuel mixture, and front-end engineering design work and will take around 20 weeks to complete.

All biomass is ultimately powered by the Sun, so it's reasonable enough to call yourself Helius if biomass is your business. One of the company's core beliefs and drivers is ". . . that by 2050, biomass could provide as much as 50% of the world’s primary energy needs. And the next decade will see the development of improved biomass energy conversion systems – with Helius Energy destined to be at the forefront."

That would suggest an enormous growth rate from where we are now, not least for biomass-fired electricity (a secondary energy derivative). Today it is a very tiny proportion of electricity production - according to this wiki, just 44 GWH were generated in 2005, less than half the 93 GWH produced by solar pv.

I do have my doubts about biomass power for developed nations - perhaps wrongly. I can see it making sense in India, but other than a lifestyle choice for remote rural types, it's not an obviously commercial solution to the large, clean and environmentally friendly (clear air and carbon free) emissions of a modern, wealthy, urbanised society. Unless of course, they can tap into a massively cheap feedstock - like chicken manure !

Biomass feedstock anyone?

This is what the world's largest biomass plant at Thetford runs on.

Suzlon Energy, the Indian wind turbine manufacturer, has just reported Rs 437.82 crore net profit for Q4 compared to Rs 360.16 crore a year ago. Normally, you'd think this is pretty good, but worse than expected by analysts, so the stock took a hit. Yet it's the investment plans of the company that are perhaps more eye-catching - they are huge.

Rs 3,300 crore is to be invested during the current fiscal to enhance its wind turbine and gear box manufacturing capacity - 2,500 of which will be in India and the rest in its subsidiary in Belgium, Hansen transmissions. Right now, Suzlon's annual turbine output is 2,700 MW and they believe that will rise to 4,800 MW by the end of 2008.

Meanwhile, Suzlon's bid for Repower AG hangs in the balance. The date to watch is the 24th May when all final bids have to be in. Will Suzlon raise it's offer for Repower?

Will they join forces with Areva?

Will Areva seek to trump Suzlon?

Maybe Suzlon should bow out of this deal - the gain in Repower's manufacturing capacity will be offset with their much lower margins and rightly or wrongly, one senses that the German company would be less willing to work with Suzlon than with Areva. My gut feeling is that they are better off expanding organically and buying key component manufacturers where necessary - the Hansen deal seems to have worked. How about a US tower manufacturer?

The costs of towers has been rising and ownership of a tower manufacturing plant could protect them from any further price increases.

Camco International, has just bought BRADSHAW Consulting, a software business which helps companies in the UK and United States to find ways of reducing their carbon emissions, energy consumption and waste for up to £1.5m.

I'm all for computer software playing a bigger role in carbon accounting - if only because there might be less room for selective interpretation of what is a carbon-offset, as recent controversies attest whether over biofuels or tree-planting or something else.

Still, whilst you could theoretically keep track of all your emissions at the micro level, I still think there's one giant hole in carbon accounting; at the macro level. What about the energy input produced from bought-in goods?

That is to say, if a firm buys computers/electronics components online from www.anymanufacturer.com, have they any idea how many carbon emissions that took to build the at least 90% or so of components that were made in China or Taiwan?

Was that energy powered by coal, nuclear or hydropower?

Right now for those firms, these are impossible questions to answer. And for the forseeable future, rightly or wrongly, China has no intention of decoupling economic growth from rising carbon emissions. So whatever Western firms think they're doing at the micro level to reduce carbon emissions, their reductions will quickly get overtaken by China's record-breaking coal-fuelled economic growth.

VRB Power Systems, has just been granted USD 1.5 million to deploy small scale energy storage systems in remote solar and wind applications across Australia.

Recently, a lot of interest about VRB's energy storage technology has been focussed on their large scale storage technology to be deployed at Sorne Hill in the Republic of Ireland, which to give you an idea of size, will look something like this existing plant in Utah, although at a capacity of 12 Megawatt hours, 6 times bigger.

Yet energy storage for microgeneration in remote sites is still dominated by noisy, dirty, diesel generators and unlike much of Africa, a wealthy country like Australia could easiily do far better. So here's a picture of VRB's 10 kwh small system, which clearly doesn't take up much space at all, not that anyone wants for room in Australia.

To quote VRB's CEO from this piece in Renewable Energy Access,

We believe that Australia is a great market for our products with lots of opportunities in solar and wind applications both on and off grid. We are also pleased to see the Australian government recognizing the need for energy storage in order to maximize Australia's renewable resources.

Maybe we'll start to see non-government private Australian funds pouring into this technology following a successful deployment. That will be the test. I've always though that with all alternative energy technology, the hurdle is not how much money the government gives you, but how ready consumers are to part with theirs.

The Atlantic has been rowed, powerboated and even swam across, but just 2 days ago, the first solar-powered crossing was made by Sun 21.

The achievement of course is not so much physical as technological. Sitting on this boat and pointing it in the right direction is about as tough as it gets - or so I imagine. The boat has 10 kilowatts of solar modules and is driven by 2 electric motors, of 8 kW each. Solar power is stored for overnight progress using batteries.

It doesn't even seem to be that expensive - about 700,000 Swiss Francs or $854,000 it is within the price range of a brand new sailing yacht, achieving the same speed without all the effort.

I was actually a bit surprised that they had to pack in 760 litres of fresh water to keep them going. Surely they could have tapped into some of that solar power for desalination?

RBC Capital Markets yesterday released a new report;

Here comes the Sun

a bit of a clichéd title, which makes you think of this Beatles song

The report is by Stuart Bush, their lead alternative energy equity analyst for RBC Capital Markets.

It makes the following recommendations for solar investors which I have abbreviated below;

* Play the Supply Chain: e.g. silicon, wafer and cell producers will generate higher margins than the labor-heavy and low barrier-to-entry module and installation segments.

* Play Tech Differentiation: companies with higher efficiency products or lower-cost thin-film designs are better suited to command superior profits long term.

* Play Globally: An investment strategy that seeks to pair Asian producers long versus European producers will benefit in the long term.

* Play within a Geography: Investing among companies located in particular regions, such as Germany or China, will limit exposure to cross-border macro trends and highlight comparably strong regional producers.

Here are two other points it makes which I think are very interesting;

i) The forecast for thin-film solar growing from 6.5 per cent of the market in 2007 to 19 per cent in 2011 - a real turnaround if this happens, as this is a technology that has not delivered anything its promise thus far
ii) the total industry average installed cost for photovoltaic solar will decline from about $7.37 per kilowatt in 2007 to about $4.40 in 2011, and achieve organic competitiveness with grid electricity at about $3.50 per kilowatt, without incentives and depending on the region in 2012-2014 - this really is quite optimistic, I think a 30% drop over the next 10 years to 2017 is more likely, but who really, really knows?

And let's face it, even if solar prices continue not to fall, the technology will at least reduce in real terms, on the tide of rising incomes.

As our solitary listed wave stock, Ocean Power Technologies is well overdue some attention.

When you look at their list of projects in Hawaii, New Jersey and Spain, it's clear that this is anything but a highly deployed power technology. One PowerBuoy produces 40kw and only in Hawaii and Spain will these wave "farms" will reach over 1 megawatt - this for a technology that is supposedly scaleable to hundreds of megawatts. In the year to Jan 31st, they showed a net loss of $5.5m, roughly the same as the year before. Nonetheless, this year, they are showing an order backlog of $5m compared to $2.6m a year earlier.

What I like about the technology is that it is modular - need more power, add another one. Wave power is also more predicatable than other intermittant renewable technologies based on wind or solar. In terms of costs, what we have to go on is that it is more expensive than wind but that the CEO believes with economies of scale, within 3-5 years they expect to equal and even be cheaper than wind.

Let's see about that last point - there have been no end of alternative energy technologies who claim that with a big enough production run, costs will fall and they will make their breakthrough - which somehow doesn't happen.

Forbes Magazine, 8th May

The price of corn, the primary feedstock for ethanol in the U.S., climbed in the first quarter of 2007, as anxiety about supplies reached a pinnacle. The strain on the nation's corn crop is greater than ever, as the food and alternative fuel industries vie for a share of supply.

What a mess !

Government support for domestic ethanol producers through biofuel mandates is having the perverse effect of reducing their profitability and by extension, future investment potential. As any economist would agree, when demand exceeds supply, prices almost always go up and this is exactly what happens when overnight, you start to demand fuel as well as food from a limited and not quickly scaleable supply of corn. Verasun for example has just posted a Q1 loss primarily because it had to pay $4.05 per bushel of corn compared to $1.87 for the same period a year ago. Let's face it, an over 100% inflation rate per annum in your critical feedstock would hurt anyone.

Having said that, high corn prices can work the other way too; in higher ethanol revenues. Although ethanol pump prices are not risng as fast as corn - according to the same article, $2.13 a gallon on average compared to $1.77 last year. Is this just a time lag?

I don't know.

But it might be a useful performance metric to ask any ethanol producer; what are they paying on average per bushel of corn and how successfully are they offsetting that in higher ethanol sales?

If you'll forgive the pun, this just might be a good way of separating the wheat from the chaff of a struggling industry.

Low Carbon Accelerator, the first AIM-listed private equity fund to invest in alternative energy companies, has already got quite an interesting spread of investments - 8 in total.

The one that really caught my eye was their £4.5 million investment in Proven Energy, a highly respected manufacturer and installer in small wind turbines, ranging in size from 2.5 kilowatts to 15 kilowatts. Proven wind turbines are deemed to be the most solid and reliable on the market, not least because they are "heavy metal" and therefore unlike conventional megawatt class turbines, can work in hurricane force winds. Obviously it helps the firm that they are based in Scotland, where the climate can be unforgiving and for many, electrification by the national grid is not a possibility.

But it's the urban application that fascinates me. Here's a Proven wind turbine I drive by quite regularly on the Wandsworth Roundabout in London.

I'm always drawn to look at it and I have to say, it is almost never not turning at quite a speed. I gather that BP are rolling back their solar programme for their petrol stations and using micro wind turbines where possible instead - the economics are simply much better. Small wind turbines have been bashed in the media quite a bit, but I still think that in cost, output and potential, they will still beat solar pv hands down, for some time to come.

First Solar, a thin film pv module manufacturer which is based on cadmium (not silicon), has just surpassed expectations with a Q1 profit of $5m compared to a loss of $5.9m a year earlier.

I have my doubts which I've expressed about thin-film solar making it - see my earlier blog here. Although the climb of First Solar has been nothing short of meteoric since going public last year - see the 12 month chart - today it closed up over 15%.

So news in the NY Times (sorry, a subscription link) that hedge funds are reducing their exposure to alternative energy companies just can't be ignored. That First Solar now capitalises at just under $5 billion strikes me as pretty exceptional.

The Andersons, whose ethanol division is involved in the construction of two ethanol plants in Indiana and Michigan that, when completed, will collectively be capable of producing 165 million gallons of ethanol, has just dived on a profit warning, below the Wall Street average, leading to a downgrade.

There is though potential help on hand for all US-based ethanol companies - the summer driving season, which is supposed to kick in around mid-June. And some think that this may lead to $4 a gallon gasoline - see this piece on Bloomberg. So theoretically, the increased demand for fuel in the absence of adequate supply ought to boost the asking price for blended ethanol - but is that right?

Well, maybe not. The futures market is not yet anticipating higher ethanol prices throughout the summer - the peak appears to be now, not in June, July or August. Of course, this would all change very rapidly in the event of major unrest, or worse, a new war in the Middle East . . .

I have the occasional unsubstantiated fear that the Chinese curse of "interesting times" is fast approaching us, or a sustained period of "unknown unknowns" ad Donald Rumsfeld used to say - or even "Black Swans", as described by by Nassim Nicholas Taleb in his recently published book, "The Black Swan: The Impact of the Highly Improbable".

Yet if there's one positive that emerges from any number of potential threats to the world's peace and stability this summer, I just can't see alternative energy emerging on the losing side.

Novozymes, the Danish biomass division of which concentrates on next generation cellulosic biofuels (and is thought to be ahead of everyone else) fell 14 to 532 on profit-taking after the stock rose yesterday, when UBS raised its target price for the group to 600 dkr from 552 dkr following the group's strong first-quarter report.

UBS is compared to Danish Jyske Bank earlier this year, much more upbeat about Novozymes - raising its 2007, 2008 and 2009 EBIT forecasts by 10 pct, 3 pct and 3 pct respectively.

The big picture is that worldwide, concerns about biofuels and their environmental impact appear to be rising rather than diminishing. Already in Europe, plans are underway by the Dutch to establish sustainability guidelines which are almost certainly going to reduce their import from developing countries. This follows the recent admission by EU officials that there was no system in place to tell whether biofuels had been imported (and from non-sustainable sources) from outside of Europe or not.

In the medium to long run, I believe these concerns point to cellulosic biofuels. Nevertheless, the hard questions remain;

when will they be available?

and at what price?

Novozymes, the Danish biomass division of which concentrates on next generation cellulosic biofuels (and is thought to be ahead of everyone else) fell 14 to 532 on profit-taking after the stock rose yesterday, when UBS raised its target price for the group to 600 dkr from 552 dkr following the group's strong first-quarter report.

UBS is compared to Danish Jyske Bank earlier this year, much more upbeat about Novozymes - raising its 2007, 2008 and 2009 EBIT forecasts by 10 pct, 3 pct and 3 pct respectively.

The big picture is that worldwide, concerns about biofuels and their environmental impact appear to be rising rather than diminishing. Already in Europe, plans are underway by the Dutch to establish sustainability guidelines which are almost certainly going to reduce their import from developing countries. This follows the recent admission by EU officials that there was no system in place to tell whether biofuels had been imported (and they presume, perhaps wrongly, from non-sustainable sources) from outside of Europe or not.

In the medium to long run, I believe these legitimate environmental concerns point to a resolution through cellulosic biofuels. Nevertheless, two hard questions remain about cellulosic biofuels, a bit like most fuel cells;

when will they be available?

and at what price?