Seeking Alpha

Clean Energy Intel's  Instablog

Clean Energy Intel
Send Message
Clean Energy Intel offers free insight and is produced by a retired hedge fund strategist. You can read more at
My company:
Clean Energy Intel
My blog:
Clean Energy Intel
View Clean Energy Intel's Instablogs on:
  • ABB and Nissan To Develop EV Battery Recycling Solution

    One of the usual charges laid against the electric car relates to the problem of what to do with the batteries once they can no longer be used in the vehicles for which they were designed. The potential for recycling has been discussed for some time. However, leading power and automation group ABB (NYSE:ABB) has just announced a partnership with 4R Energy, Nissan (OTCPK:NSANY) via its North American subsidiary and Sumitomo Corporation (OTCPK:SSUMY) also via its North American subsidiary, to evaluate the reuse of the lithium-ion battery packs that power the Nissan LEAF.

    According to the ABB / Nissan partnership group, lithium-ion batteries for EVs have up to 70 percent capacity remaining after 10 years of use in an automotive application. This longevity allows them to be used beyond the lifetime of the vehicle for applications such as a smart-grid community energy management systems or battery energy storage.

    Consequently, the partnership plans to develop a LEAF battery storage prototype with a capacity of at least 50 kilowatt hours (kWh), enough to supply 15 average homes with electricity for two hours.

    “The agreement will allow us to evaluate the commercial viability of a grid storage solution and develop a prototype to effectively reuse Nissan LEAF batteries,” said Bruno Melles, head of ABB's Medium Voltage power products business.

    Ken Srebnik, Senior Manager, Nissan North America Corporate Planning added “It’s important to Nissan that we manage the complete lifecycle of the electric vehicle battery pack, even beyond its use in a Nissan car….. Innovations in energy storage systems are becoming more viable as the electric grid gets smarter’.

    This is clearly not a development that is going to affect the market for EVs in the short term. However, over the medium to long term the benefits of any success in this area are clear:

    • A solution to the recycling question
    • Future demand for used EV batteries for energy storage would help establish a re-sale value for the batteries and improve the economics of EV ownership
    • This would be particularly true for ownership models such as that proposed by Renault and Better Place whereby the battery is owned by the manufacturer and merely leased to the EV owner. The establishment of a resale value for the batteries would clearly bring down EV battery lease charges.

    You can read the full press statement from ABB here and a longer discussion on the future of the electric car here.

    4R Energy Corporation is a joint venture of Nissan and Sumitomo Corporation.

    Disclosure: I am long TSLA.
    Tags: ABB, TSLA, AONEQ
    Jan 20 6:13 AM | Link | Comment!
  • Outlook For British Solar: Sunny With Clouds

    Very British Solar: Mr Barbour - Ploughcroft Solar Case Study.
                         Source: Ploughcraft Solar.

    Clean Energy Intel’s Edie Lush speaks to Chris Hopkins, Founder and MD of Ploughcraft Solar.

    A leading British Solar Installation Company says that while the drop in the Feed-In-Tariff will hurt some solar companies in the UK, the cut means a more sustainable base for the industry.

    The UK government announced on the 31st October that they’d cut the solar Feed-In-Tariff by just over 50%, cutting the subsidies available to domestic and small business installations from 43p/kW·h to 21p/kW·h. While this cut was largely expected and follows similar announcements across Europe, solar investors are right to be concerned. As a result of the cut in the tariff, Ernst & Young booted the UK from fifth to sixth place in their latest Country Attractiveness report, a report they produce for investors in renewable energy. (The UK remains fourth in EY’s wind index, but has dropped 3 places to 22nd place in the solar rankings). 

    There are those who are protesting the cuts, both through a twitter campaign #cutdontkill and in person – Opposition MPs Ed Milliband and Caroline Flint are leading the charge. Solar Century’s Jeremy Leggett is vociferous in his opposition and Friends of the Earth is threatening to sue the government over the cuts.

    But – perhaps surprisingly – not all solar businesses are joining the ranks of those clamouring to keep the FIT at the higher rate. Clean Energy Intel spoke with Ploughcroft Solar’s CEO Chris Hopkins. Ploughcroft has had a bumper year thanks to the boost of the Feed-In-Tariff and an appearance on the BBC’s Dragon’s Den – a reality TV show where entrepreneurs pitch their ideas to Investors. Ploughcroft tripled its turnover – going from selling £500,000/month to £1.5million /month.

    Even without the assistance of the BBC, other companies in the UK solar industry have enjoyed 18 golden months. Hopkins says, “A year and a half ago when the Feed-In-Tariff was brought in, it cost us £2 per Watt of energy and two days to install a solar PV system. Today, we can install a system in a day, and material costs have halved to just £1 per Watt a day.” And while costs have shrunk, “the FIT and rising electricity costs have ensured that demand has risen.” 

    The UK government’s latest consultation paper on the FIT concurs, saying “we estimate that the installed costs of a typical domestic solar PV project (size 2.6kW) are now around £9,000, having been around £13,000 at the time the scheme was launched. As well as the falling costs of solar PV, the increased returns available from solar PV have also been driven by a 13% increase in retail electricity prices since April 2010.”

    The graph below shows the growth in PV installations in the UK since the inception of the FIT. Smaller PV systems are tracked by the Microgeneration Certification Scheme (NYSE:MCS) database while the Central FIT Register (NYSE:CFR) tracks larger schemes. Clean Energy Intel readers might notice the similarity in the demand curve between the UK and the US, as noted in our article on the 11 November: Solar's Positive News: Capacity Plans Are Finally Adjusting.

    Hopkins points out that when the FIT was introduced, the government clearly indicated that their intention was to give the consumer a Return on Investment of 5%, and that they’d review the effect of the FIT. “At the moment, customers are getting a Return on Investment of approximately 15-16%. It has to be brought to a level which is sustainable, which allows the money in the pot to last longer. I’m now selling systems which I’ll install in January at the new FIT rate. “I’ll sell a 4kW system at £10,000. This will give back £700-800 in FIT/year and reduce the electricity rate by £150/year. Plus the customer gets an export tariff of around £50. The combined benefit gives the customer a Return of Investment of around 9%, which is still higher than the target of 5%.” He’s still selling 20 systems a month at the new price and doesn’t expect this to drop off any time soon.

    He doesn’t have a great deal of time for those companies complaining about the drop in the FIT. “If you built your business on a customer ROI of 16%, when the government only promised 5%, whose fault is that? If I were purely driven by greed, then yes I’d be in favor of keeping the FIT where it is. But the new level is more sustainable, and makes the FIT last so that more people can benefit from it.”

    But if the ROI stays at this level could the government cut again? While Hopkins demurs on this point, in the current economic climate some are preparing for another eventual cut in the FIT to bring consumer ROI closer to the 5% target. Hopkins remains extremely positive about solar in the UK - while he’ll be cutting the temporary staff he took on in the last few months to benefit from the massive take-up of solar thanks to the FIT, he feels confident the more robust companies in the UK will survive.

    Edie Lush is a journalist based in London. She has worked as an Associate Editor of Spectator Business Magazine, Director of the Intelligence Squared Green Festival on Climate Change, a political analyst for Hedge Fund Omega Partners and UBS and a reporter for Bloomberg Television.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Nov 24 10:46 AM | Link | Comment!
  • Non-Farm Payrolls Create Basis For October Relief Rally

    The release of the September non-farm payroll numbers was obviously crucial to the direction of the market going forward. Another bad number could have been devastating to a market concerned about both the possibility of a synchronized global recession and the affects of a worsening debt crisis in Europe. However, quite possibly we have now just seen the first of two factors with the potential to prime the market for a much needed relief rally -


    • The non-farm payrolls were a bit better than expected, particularly allowing for the revisions up in the previous two months. This will no doubt be enough to keep the market's recession barometer just a tad away from double dip for now.
    • Attention may now turn to the potential for some kind of a agreement in support of a resolution to Europe's debt crisis at the November 3-4th G20 in Cannes. Sentiment on Europe is heavily negative. We now have the potential for increased talk of some kind of coordinated action to support a relief rally in stocks. More on this in a follow-up article.


    In terms of the payroll numbers themselves, as you can see from the table below, the headline number came in at 103k, above expectations of an increase of only 65k. That good news was partially diluted by the fact that some of the increase was also related to the return of 45,000 Verizon Communications workers who had been on strike in August. However, the numbers for July and August were revised up by a net 99k, providing a better than expected outcome all told.


    Released on 10/7/2011 8:30:00 AM For Sep, 2011



    Prior Revised


    Consensus Range


    Nonfarm Payrolls - M/M change



    30,000  to 115,000 


    Unemployment Rate - Level

    9.1 %


    9.2 %

    9.0 % to 9.5 %

    9.1 %

    Average Hourly Earnings - M/M change

    -0.1 %

    -0.2 %

    0.2 %

    0.0 % to 0.5 %

    0.2 %

    Av Workweek - All Employees

    34.2 hrs


    34.2 hrs

    34.2 hrs to 34.3 hrs

    34.3 hrs

    Private Payrolls - M/M change




    54,000  to 135,000 



    Source: Bloomberg


    Overall, these numbers remain anemic and are certainly not strong enough to bring the unemployment rate down, which remains at 9.1%. However, the market has been debating whether or not the economy will drop back into recession, following growth of only 1.3% at an annualized rate in Q2. The metrics we've seen so far suggest that Q3 could squeeze out a small improvement to some 2% growth. September's payroll number offers some relief in that it tends to support that overall story - i.e. one of an economy seeing weak growth but one which just manages to skirt around the recession threat. 



    Source: Bloomberg


    At time of writing, the market's reaction is not particularly supportive with the S&P and the Nasdaq down and the Dow up a tad.  However, once the dust settles, these numbers should allow for something of a relief rally. At that point, any discussion of negotiations on a potential deal on European debt at the G20 summit could help the market higher. There is certainly room for such a development and my read of the political tea leaves is that it may well involve a significant commitment from China. If that looks likely to be the case, it should again help the market towards a recovery.


    Following the release of the previous month's payroll numbers for August, I recommended cutting all positions in preparation for what looked likely to be an ugly performance in September (see my original article here). That proved to be the case. However, the bottom line is that these latest numbers have now significantly reduced the immediate threat of another bout of concern over the potential for a renewed recession. As a result, there appears to be good potential for something of an overall recovery in the stock market - whatever the initial reaction in the market on the day.

    Disclosure: I am long SPY.
    Tags: SPY
    Oct 07 11:43 AM | Link | Comment!
Full index of posts »
Latest Followers
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.