Mixed Greens: Suntech lifts on news of reduced capacity

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Suntech cuts cell production, shares jump. Algae.Tec draws interest at Berlin air show. Plus news on Tesla; carbon; biofuels; India’s grid spend; hot August nights.

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China’s Suntech Power, the world’s largest PV manufacturer, has risen the most in almost a week after temporarily cutting production capacity to lower costs amid a global oversupply. Bloomberg reports that Suntech shares gained 6.6 per cent to 93 cents at the close in New York, the most since Tuesday last week. Suntech announced today it would be cutting its solar cell production capacity to 1.8GW – the company isn’t reducing its 2.4 gigawatts of solar-panel production capacity. According to a company statement, the majority of the approximately 1,500 employees affected will be offered other jobs, while the rest will be retrenched.

As Bloomberg notes, the cutback is not considered surprising, with prices for solar cells falling 45 per cent in the past year on the back off pared-back government incentives and slowing demand. Suntech also faces possible tariffs in Europe, its largest market last year, on top anti-dumping duties in the US. Alex Morris, a research associate at Raymond James & Associates says he expects more solar manufacturers will follow suit, telling Bloomberg: “Oversupply has sent prices cratering and margins as well. Right now this is just scratching the surface of that overcapacity.”

Alternatives big in Berlin

Sustainable aviation fuels appears to have been one of the dominant themes at last week’s Berlin Air Show. Airbus revealed its updated Smarter Aviation vision for 2050, which included five principals on how aircraft could be managed in the air and on the ground, and how they should be powered.

Alternative aviation fuels warranted their own pavilion, with Australia’s algae fuel developer Algae.Tec taking pride of place among them. Algae.Tec has an MOU with German airliner Lufthansa, which is looking to install a facility in southern Europe once the third party validation at its Nowra plant are completed. Projects in Brazil and in the Hunter Valley are also being discussed with other partners. “There is obviously a big focus on sustainable aviation, and there is a recognition that there is no one silver bullet, executive chairman Roger Stroud said. “But they are also aware that advanced biofuels like algae are not just a far out lab concept for aviation, it is a reality.”

In other news ….

Elon Musk’s Tesla Motors also had a good start to the week, rising the most in four months on Monday after Morgan Stanley boosted its rating on the EV maker to overweight, describing concerns that Model S production is increasing too slowly as “overdone.” Bloomberg reports that shares in Tesla climbed 7.1 per cent to $US32.54 at the close in New York, its biggest daily advance since May 10. Tesla – which hopes to become profitable next year – has gained 14 per cent this year.

Europe’s carbon market, meanwhile, hit another low with EU allowances dropping to their lowest point in more than a month after the regulator said it would finish an upgrade of the market’s registry system by October 2, allowing a supply boost. Bloomberg reports that EUAs for December fell as much as 2.6 per cent to €7.26 a metric tonne on the ICE Futures Europe exchange in London, the lowest since mid-August. UN CERs for December dropped as much as 14 per cent to a record €1.45.

The EU Commission yesterday confirmed it would be putting a cap on the amount of crop-based biofuels used in transport. BusinessGreen reports that the new limit – “a major U-turn on its previous policy” – confirms that the use of biofuels derived from crops like wheat or rapeseed will be capped at five per cent up to 2020 (down from 10 per cent), the level set out in documents leaked last week.

India’s largest electricity transmission company, Power Grid Corp, has revealed it may exceed a 1 trillion rupee ($US18 billion) spending plan to upgrade its network and thus avoid a repeat of the world’s biggest blackout in late July. Bloomberg reports that the state-owned company, which is doubling expenditure in the five years, aims to boost its market share to 70 per cent from 50 per cent.

The Danish government has announced that Denmark will reach its 2020 goal of 200MW installations this year itself due to favorable government incentives. According to the Ministry of Foreign Affairs, solar cell capacity is estimated to be a hundred times bigger this year compared with 2010. Currently, 36MW is reportedly being installed every month. Dansk Energi, Energinet.dk and DONG Energy estimate that this development will result in 1000MW by 2020 and 3400MW by 2030. PV Tech reported that the Danish parliament has proposed 35% of the country’s energy supply to be based on renewables by 2020, making it 100% by 2050. The country already covers 22% of its energy consumption with renewables.

The month of August, 2012, was not only the fourth-warmest August globally since 1880, but the 330th consecutive month in which temperatures worldwide were above the 20th-century average, according to the US National Climatic Data Center. Bloomberg reports that the average temperature on land and over the ocean was 16.2°C, 1.1 degree above the century’s average.

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