Mixed Greens: Aussie fund targets Irish wind

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AMP Capital to spend €200m on Irish wind; solar leads renewables investment surge; Oz emissions up, power down; CFI eyes cow manure; Solco revenue update.

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AMP Capital has agreed to buy wind energy assets in Ireland from Viridian, with reports suggesting they will be investing as much as €200 million. The Irish Independent reports that the Australian investment group has secured the deal, which includes wind farms in Roscommon, Sligo and Donegal, following negotiations that kicked off back in February. The wind energy assets are held by Viridian’s Dublin-based Eco Wind subsidiary, and include 104MW of projects, both completed and still under development. The seven operational wind farms in Sligo, Donegal and Roscommon have a combined capacity of 44.4 megawatts. Eco Wind also owns two projects in Northern Ireland.

Independent.ie reports that Viridian’s owner, Bahrain-based private equity firm Arcapita, put Eco Wind Power up for sale in order to pay down debt related to its acquisition of Viridian. Viridian sold its transmission and distribution business, Northern Ireland Electricity, to the ESB last year for about €1.5 billion. AMP Capital last year won a mandate by Irish Life Investment Management (ILIM) to manage the €1 billion Irish Infrastructural Trust, established with a view to investing in state-owned assets earmarked for sale by the government or in new infrastructural projects. ILIM recently established two firms – Project Cyclone 1 and Project Cyclone 2 – that will be used to acquire Irish infrastructural assets.

Solar leads green energy investment surge

Solar power attracted nearly twice as much investment as wind energy in 2011, making it that year’s renewable energy technology of choice for global investors, and driving the renewable energy sector to yet another record-breaking year, according to two new reports published this week. The two publications – Global Trends in Renewable Energy Investment 2012, the fifth edition of a report by the United Nations Environment Programme (UNEP), and based on data from Bloomberg New Energy Finance; and the Renewable Energy Policy Network for the 21st Century (REN21) 2012 Global Status Report – launched jointly this week, show that despite an increasingly tough competitive landscape for manufacturers, total investment in renewable power and fuels last year increased by 17 per cent to a record $US257 billion, a six-fold increase on the 2004 figure and 94 per cent higher than the total in 2007, the year before the world financial crisis. And while this is down from the 37 per cent growth recorded in 2010, the report notes that it was achieved at a time of rapidly falling prices in the sector and global economic downturn.

Solar was the star in 2011, with total investment jumping 52 per cent to $US147 billion, driven by booming rooftop PV installations in Italy and Germany, the rapid spread of small-scale PV to other countries from China, and big investments in large-scale solar thermal (CSP) projects in Spain and the US. Another highlight from the reports is the US comeback to within an inch of the top of the global renewables investment rankings, with a 57 per cent leap to $US51 billion, as developers rushed to cash in on three significant incentive programs before they expired during 2011 and 2012. China’s lead over the US decreased to just $1 billion in 2011, with renewable energy investment of $US52 billion, up 17 per cent. India, meanwhile, clocked the fastest investment expansion of any large renewables market in the world, up 62 per cent to $12 billion – a surge driven by India’s National Solar Mission.

In the power sector, the reports found that renewables accounted for almost half of the estimated 208 gigawatts of electric capacity added globally during the year. Wind and solar PV accounted for almost 40 per cent and 30 per cent of new renewable capacity, respectively, followed by hydropower (nearly 25 per cent). By the end of 2011, total renewable power capacity worldwide exceeded 1,360GW, up 8 per cent over 2010; renewables comprised more than 25 per cent of total global power-generating capacity (estimated at 5,360 GW in 2011) and supplied an estimated 20.3 per cent of global electricity. The reports also noted that at least 118 countries, the majority of them developing, had renewable energy targets in place by early 2012, up from 96 the year before, although some slackening of policy support was seen in developed countries.

Australia’s emissions and energy

Another report, the latest pitt&sherry Carbon Emissions Index (CEDEX), shows Australia’s total emissions for the year to March 2012 were 1.1 million tonnes higher than in the last CEDEX, for the year ending December 2011, and 6 million tonnes higher than they were in the year to March 2011, the lowest point in the past five years – equivalent to an annual growth rate of about 1.3 per cent. The CEDEX report also shows a drop in total electricity supplied into the NEM in the year to March 2012, down by 1 TWh, or 0.5 per cent, on the year to December 2011. Black coal-fired electricity decreased by 1.4TWh, while output from the much more emissions-intensive brown coal power stations increased by 0.8TWh. The total fall in output from black coal power was in NSW, with about one quarter attributable to the January closure of one potline at the Kurri Kurri aluminium smelter. Output from gas and renewable generators also fell slightly. The overall outcome was that emissions from electricity generation fell less than the quantity of electricity generated, so that the sent out emissions intensity of NEM electricity increased slightly to 0.882 kg CO2e/kWh.

Source: pitt&sherry CEDEX
Source: pitt&sherry CEDEX

Diary farmers’ eye new carbon credit cash cow

Australia’s dairy farmers could soon earn carbon credits by capturing and destroying harmful greenhouse gases released by cow manure, under a new Carbon Farming Initiative methodology released today by the federal government for public comment. The methodology involves putting a cover over manure ponds – used by many dairy farmers to manage liquid dairy manure – which captures methane and other harmful greenhouse gases emitted by the effluent as it decomposes. These captured gasses are then either destroyed through burning off, or via internal combustion engines and gas boilers which generate electricity and heat. “This methodology offers a new way for dairy farmers to earn tradeable carbon credits and also provides an opportunity to cut power bills,” said Mark Dreyfus, Parliamentary Secretary for Climate Change and Energy Efficiency.

Simon Crean, the minister for regional Australia, stressed the potential for the methodology to deliver both economic and environmental benefits. “Pricing carbon under the government’s Clean Energy Future Plan creates a market that rewards good behaviour – and regional communities can be big winners,” he said. “Regional communities have determined ‘what’ needs to be done to reduce their carbon footprint, and our programs are helping them with the ‘how’. Dairy farmers are now being encouraged to participate in the consultation process, ahead of the introduction of the carbon price next month. Dairy farmers are currently excluded from paying a direct carbon price on their emissions, but many dairies are already exploring steps to improve energy efficiency or shift to renewable power sources – an initiative that is being boosted by $1 million in government funding to Dairy Australia, as well as grants under the government’s $1 billion Clean Technology Investment Program.

Solco updates revenue guidance

ASX-listed renewables and water company Solco has announced a further adjustment to its full-year revenue to $23 million, as the company restructures “to adapt in a new environment.”  The adjustment, announced today, follows the introduction of a new management team and operating structure – and a more “customer-focused” approach – aimed at leading Solco back to profitability. “The wholesale business had to be restructured from an inventory and staffing point of view, following a significant fall in component costs and a drop in domestic demand due to global over supply and changes in the regulatory environment in Australia,” said Solco’s recently appointed CEO, Anthony Coles.

Following a below forecast result in Q3, Solco’s wholesale business achieved its best month for FY2012 in May, and Coles says that the company is confident it can prosper in the new global environment and continue to grow its earnings. “Our procurement, logistics and pricing have now been addressed to meet market needs and as a result sales have been climbing in Q4,” he said. Delays on some of the large-scale commercial solar projects, scheduled for completion in Q4, have also contributed to the further adjustment to revenue. “We had to make a number of tough decisions which included some redundancies but we have dealt with our aged inventory and re-established our core vendor relationships; as a result we are well placed for the post-rebate solar PV environment we are now experiencing.”

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