India holding some major cards in the carbon trade game
THE latest World Bank figures show that India has emerged as a big player in the carbon trading market, ranking as the second-largest seller of carbon credits in the global market last year.
Although its share is only 6%, as compared with China's gigantic 73%, India now has 930 carbon credit projects in the pipeline.
Carbon credits are generated by companies in the developing world when they move to cleaner technologies that help to reduce their greenhouse emissions.
For every tonne of carbon dioxide reduced, the company receives a carbon emission reduction (CER) certificate that it can sell like any other commodity. The current price is around €10-17 ($A16-27) per credit.
Most of India's carbon credits are bought by companies in developed countries that have ratified the Kyoto Protocol on climate change.
Under the protocol, developed countries must cut all greenhouse gas emissions by an average 5% below 1990 levels by 2012.
If companies in the West fail to cut their own emissions (usually because it is very expensive to change over to cleaner technologies in developed countries), they can offset this failure by investing instead in projects in the developing world that also cut pollution.
India is not obliged to cut emissions, as its energy consumption is low. For Indian companies, this trade offers a great opportunity.
Torrent Power, for example, which has a coal-fired power plant in western India, switched to natural gas recently. Gas is a cleaner fuel than coal because it emits fewer greenhouse gases.
The project was registered with the executive board of the Clean Development Mechanism. Torrent is now set to earn almost 3.2 million carbon credits annually from this reduction in emissions.
"This is a great opportunity for Indian companies to invest in clean technology.
In a broader sense, the idea behind carbon trading is that it allows countries such as India, China and Brazil to grow economically but in a more environmentally friendly way.
Mrs Choudhury says that hundreds of companies are jumping onto the carbon credit bandwagon by adopting cleaner technologies.
Even big household names such as Reliance Industries, Grasim Industries and Tata Chemicals are considering investing in carbon trading.
In some cases, the money that some companies earn from the sale of carbon credits exceeds revenue from their main area of business.
Last year, Indian companies made $US300 million by selling CERs (each CER is equivalent to one tonne of carbon dioxide).
By 2012, India's earnings are estimated to jump to $US3.6 billion.
"Initially, managements were not willing to invest money and time as they weren't sure of the potential," said Arvinder Sethi, director, climate change, at the Ministry of Environment and Forests. "Then we joined hands with industry bodies to make them aware that this is a win-win proposition."
The World Bank estimates that the potential for India from this trade is around $US100 billion annually.
Carbon credits are traded in European commodities markets and a bank official said that one reason for the success of the carbon credit business in India was that it was cheaper to buy credits from India than Europe.
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Much of the editorial I produced this week were musings from Euromoney's Renewable Energy Finance Forum - Wall Street, which I attended last week.
You can find those pieces below, or by clicking here, here, here or here.
The gathering is a proverbial who's who of the energy finance world, and includes talks from senior investment bank officials, cleantech CEOs, venture capitalists, and policymakers.
It costs over two grand to attend, but the information presented is worth much more than that. So be sure to check out the coverage I've already presented as well as the continued coverage I'll deliver next week.
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China's Next Cleantech Takeover: World's Largest Automaker
It was just a tiny, $10 battery company...
But right now, as part of China's rapid cleantech mission, this little gem is on the verge of becoming the world's largest automaker!
And it could hand you five times your money in the process by March!
Today, for some light weekend reading, I'd like to show you one of the final PowerPoint slides delivered by Michael Liebreich, the CEO of Bloomberg New Energy Finance, which is a clearing house for all cleantech financial data, and a man I've seen give countless presentations.
The slide was entitled...
“Magnificent” Seven Decadal Themes (from here to 2020)
It means sources of clean energy, while still marginally expensive, are undergoing rapid cost reductions. What the naysayers don't seem to realize is that renewables will soon be the cheap form of energy.
Coal and oil have had well over a century to get costs as low as possible... Renewables are only now reaching scale.
And pervasive data is allowing us to realize the full benefits of clean energy and its superiority over traditional fuels. (New Energy Finance is doing a great job of harnessing and synthesizing this data for me and you.)
So, for example, we know where the best renewable resources are in almost every country of the world; we know which companies are making the most economic and effective solar panels and wind turbines; we know which companies and governments are investing how much and where; we're starting to realize and document that coal and oil have a higher cost than the sticker price; and we're starting to know more and more everyday in real time.
We can flash to detailed charts showing the rapid cost reduction in solar on a whim:
Transforming transportation
Whether it's natural gas for big rig trucks, hybrid and electric vehicles, high-speed rail, or improved metro transit... the way we move goods and ourselves is changing.
It's sometimes hard to see the impact of all the small steps being taken, but dozens of cities and ports have converted their taxi and diesel truck fleets to natural gas. Every city I've been to recently has either clean diesel, hybrid, electric, or natural gas buses.
The use of high-speed rail is exploding in Europe and Asia, and is making its way to the U.S. And increasing fuel economy standards mean plenty of models are getting 40 miles per gallon or better.
The Nissan Leaf and Chevy Volt are already the talk of the town, with demand expected to well outpace initial supply.
This is 2010. Only a neophyte would fail to see where we'll be in ten years — and fail to invest accordingly.
Just take a cue from Buffett, who has already purchased a major U.S. railroad and took a multi-billion-dollar stake in an up-and-coming Chinese battery maker.
But the gist of it is that the population in the developing world is booming; in the next decade, cities like Mumbai, Manila, Jakarta, Delhi, and Sao Paulo will each soon be bigger than any U.S. city.
And as they develop, they don't have entrenched fossil fuel industries to fight. They are developing cleanly.
What this means is that U.S. cities will soon be smaller and seemingly outdated compared to cities we once considered "the Third World."
And the investment potential in green building products and clean infrastructure will be huge.
Nuclear power on the march
There are 439 operating reactors in the world... 59 are being built; 149 are on order or planned; 344 have been proposed.
These are the plants expected to be completed by 2016, per the World Nuclear Association.
Power reactors under construction, or almost so
Start Operation*
REACTOR
TYPE
MWe (net)
2010
India, NPCIL
Kaiga 4
PHWR
202
2010
India, NPCIL
Rawatbhata 6
PHWR
202
2010
Iran, AEOI
Bushehr 1
PWR
950
2010
Russia, Energoatom
Rostov 2
PWR
950
2010
India, NPCIL
Kudankulam 1
PWR
950
2010
Canada, Bruce Power
Bruce A1
PHWR
769
2010
Canada, Bruce Power
Bruce A2
PHWR
769
2010
Korea, KHNP
Shin Kori 1
PWR
1000
2010
China, CGNPC
Lingao II-2
PWR
1080
2010
Argentina, CNEA
Atucha 2
PHWR
692
2011
India, NPCIL
Kudankulam 2
PWR
950
2011
India, NPCIL
Kalpakkam
FBR
470
2011
Taiwan Power
Lungmen 1
ABWR
1300
2011
Russia, Energoatom
Kalinin 4
PWR
950
2011
Korea, KHNP
Shin Kori 2
PWR
1000
2011
China, CNNC
Qinshan 4-1
PWR
650
2011
China, CGNPC
Lingao 2-1
PWR
1080
2011
Pakistan, PAEC
Chashma 2
PWR
300
2011
Japan, Chugoku
Shimane 3
ABWR
1375
2012
Finland, TVO
Olkiluoto 3
PWR
1600
2012
China, CNNC
Qinshan 4-2
PWR
650
2012
Taiwan Power
Lungmen 2
ABWR
1300
2012
Korea, KHNP
Shin Wolsong 1
PWR
1000
2012
France, EdF
Flamanville 3
PWR
1630
2012
Russia, Energoatom
Vilyuchinsk
PWRx2
70
2012
Russia, Energoatom
Novovoronezh II-1
PWR
1070
2012
Slovakia, SE
Mochovce 3
PWR
440
2012
China, CGNPC
Hongyanhe 1
PWR
1080
2012
China, CGNPC
Ningde 1
PWR
1080
2013
China, CNNC
Sanmen 1
PWR
1100
2013
China, CGNPC
Ningde 2
PWR
1080
2013
Korea, KHNP
Shin Wolsong 2
PWR
1000
2013
USA, TVA
Watts Bar 2
PWR
1180
2013
Russia, Energoatom
Leningrad II-1
PWR
1070
2013
Korea, KHNP
Shin Kori 3
PWR
1350
2013
China, CGNPC
Yangjiang 1
PWR
1080
2013
China, CGNPC
Taishan 1
PWR
1700
2013
China, CNNC
Fangjiashan 1
PWR
1000
2013
China, CNNC
Fuqing 1
PWR
1000
2013
China , CGNPC
Hongyanhe 2
PWR
1080
2013
Slovakia, SE
Mochovce 4
PWR
440
2014
China , CNNC
Sanmen 2
PWR
1100
2014
China , CPI
Haiyang 1
PWR
1100
2014
China , CGNPC
Ningde 3
PWR
1080
2014
China , CGNPC
Hongyanhe 3
PWR
1080
2014
China, CNNC
Fangjiashan 2
PWR
1000
2014
China, CNNC
Fuqing 2
PWR
1000
2014
China, China Huaneng
Shidaowan
HTR
200
2014
Korea, KHNP
Shin-Kori 4
PWR
1350
2014
Japan, Tepco
Fukishima I-7
ABWR
1350
2014
Japan, EPDC/J Power
Ohma
ABWR
1350
2014
Bulgaria, NEK
Belene 1
PWR
1000
2014
Russia, Energoatom
Rostov 3
PWR
1070
2014
Russia, Energoatom
Beloyarsk 4
FNR
750
2015
Japan , Tepco
Fukishima I-8
ABWR
1080
2015
China , CGNPC
Yangjiang 2
PWR
1080
2015
China , CGNPC
Taishan 2
PWR
1700
2015
China , CPI
Haiyang 2
PWR
1100
2015
Korea, KHNP
Shin-Ulchin 1
PWR
1350
2015
Russia, Energoatom
Novovoronezh II-2
PWR
1070
2015
Japan , Tepco
Higashidori 1
ABWR
1385
2015
Japan, Chugoku
Kaminoseki 1
ABWR
1373
2016
Romania, SNN
Cernavoda 3
PHWR
655
2016
Russia, Energoatom
Leningrad II-2
PWR
1200
2016
Russia, Energoatom
Rostov 4
PWR
1200
2016
Russia, Energoatom
Baltic 1
PWR
1200
2016
Russia, Energoatom
Seversk 1
PWR
1200
* Latest announced year of proposed commercial operation.
Need I say more?
Technology (and other) black swans
Like I said, we're only a few steps into the energy race.
We started lighting our streets with coal in the 1810s. Drake found oil in Pennsylvania in 1859. Edison built the first coal plant in 1882.
You think there's much more innovation to be had in those industries? We can't even stop a leaking pipe in the Gulf.
But when did we seriously start applying technology to clean energy? Ten years ago?
The biggest breakthroughs haven't even come yet.
But we'll make sure you're ready to profit from them when they do.
Here's How To Get Your Piece of the Profits in the Early Going July 6th, 2010
The New York Times recently ran an article claiming that "carbon will be the world's biggest commodity market, and it could become the world's biggest market overall."
Currently valued at over $30 billion,the carbon trading market is set to skyrocket to over $1 trillion as the price of carbon becomes more and more valuable.
And it's possible to get a piece of this infant industry right now.
Early investors can play the burgeoning carbon market by:
1. Investing in carbon credits themselves, or
2. Investing in companies that are making extra cash by reducing their emissions.
There's no telling just how lucrative this market will become. Why else would huge companies like GE, DuPont, and Johnson & Johnson be racing to reduce their emissions?
It's because of the huge profits that stand to be made. Let us show you the best ways to profit from the nascent carbon emissions trading industry...
Many people are already making a killing by reducing, buying, and selling carbon emissions but no one's talking about it yet.
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