Cleantech stars' quick start

Clean energy companies – including SMA, Abengoa and Tesla – have started the year with a surge while in India solar is closing in on coal costs.

Share prices of clean energy companies continued their climb, with the WilderHill New Energy Global Innovation Index, or NEX, piercing through the 200-level last week for the first time since July 2011. Asia provided the other headlines of the week, with China overtaking the US in smart grid investment and India selecting developers for building 750 MW of solar plants.

The NEX Index ‒ which tracks the shares of 102 companies active in renewable and low-carbon energy ‒ was trading at over 204 early Tuesday, up more than 10 per cent since the beginning of the year. The gainers this year include SMA Solar, Abengoa and Tesla Motors.

China ‒ which has already edged out US as the world's largest clean energy investor ‒ was also the largest investor in the $US15 billion smart grid market in 2013, according to research from Bloomberg New Energy Finance. These investments are dominated by smart metering, and include outlays on distribution automation and other such infrastructure. China spent $US4.3 billion on smart grid in 2013, with a large part of that going to the installation of 62 million meters. Investment in the US fell 33 per cent to $US3.6 billion as the last of the US stimulus-funded projects wound down.

The world's most populous country is also trying to expand its electric vehicle fleet. Last week, local manufacturer Kandi Technologies Group ‒ which rents out electric vehicles to the public ‒ announced that its service was profitable and would be expanded. Together with joint venture partner Geely Automobile Holdings, Kandi provides electric vehicles for short-term hire using automated multi-level garages in Hangzhou. Rental rates start from CNY 20 ($US3.3) an hour and cover the first 25km, compared with the starting rate of CNY 11 for taxis.

BYD sells its E6 electric car and K9 bus to taxi and bus operators in China. Tesla Motors will begin shipping its electric Model S cars to China next month, which would boost the vehicle's deliveries to 35,000 this year from about 22,450 last year. The company's annual net loss narrowed to $US74 million in 2013, from $US396 million in the previous year. Prototype versions of its next car - the Model X sport-utility vehicle – will be on the road by the end of the year, with mass deliveries beginning in early 2015.

Interestingly, the new owner of Fisker Automotive Holdings is China's Wanxiang Group. The former won court approval to sell its assets to the latter for an offer valued at $US149.2 million.

Meanwhile, Nissan's chief executive officer, Carlos Ghosn, introduced the electric Leaf car to Bhutan. The company will supply quick chargers and cars for the government fleet and as taxis to the power surplus kingdom in South Asia with a total population of 700,000.

In India, PV electricity costs fell to a new low and edged closer to coal in the latest auction for solar projects. The country offered capital grants for the first time instead of relying on incentive tariffs, and attracted bids for triple the 750 MW on offer. The selected developers, which included groups backed by Blackrock and Electricite de France, priced electricity at an average INR 6,500/MWh ($US0.10). Developers planning to use more costly local panels and cells bid on average for nearly double the grant amounts compared with those expected to import equipment.

The main financing news of the week was from South Africa where its largest city, Johannesburg, is planning its first green bond sale. The city will sell ZAR 1.3 million ($US117 million) of notes by the end of June to help finance low-carbon buildings and cleaner-emission buses. In the US, the New York Green Bank announced it was "open for business" and was seeking proposals from lenders, investors and industry participants. Funded in 2013 with an initial capitalisation of $US210 million, its longer-term aim is to "operate as a self-sustaining $US1 billion support system for the clean energy market".

EU carbon

European carbon prices advanced for a sixth straight week as the bloc’s lawmakers prepared to give final approval on February 24 for a plan to fix an oversupply in the region’s emissions market.

European Union allowances for December 2014 finished the week 8.2 per cent up. EUAs for delivery in December ended last Friday’s session at €7.23/t on ICE Futures Europe exchange in London, compared with €6.68/t at the close of the previous week.

This has been the longest weekly rising streak for EU carbon permits since September 2010. Ministers in the Education, Youth, Culture and Sport Council are scheduled to vote on the measure known as backloading when they meet in Brussels. The plan would remove about half of one year’s supply of allowances through 2016, returning them near the end of the decade.

UN Certified Emission Reduction credits for December 2014 lost €0.04/t last week to finish at €0.33/t.

German power for delivery in 2015 ended the week down 0.4 per cent at €36.60/MWh.

Originally published by Bloomberg New Energy Finance. Reproduced with permission.

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