Fuel cell volatility, Alstom's big backer

The last week has brought a reminder of the volatile nature of the fuel cell industry, as US producer ClearEdge Power filed for bankruptcy on May 2, less than two months after raising $US5m in a debt and equity sale to unnamed venture investors.

Shares in quoted fuel-cell makers dropped after the filing, with Ballard Power Systems falling 4 per cent and FuelCell Energy declining 2 per cent.  The latter company hit the headlines in its own right in the last few days, for winning a contract to build and operate two 2.8MW power plants in Connecticut for UIL Holdings.

ClearEdge’s bankruptcy comes when players are jostling for position in the industry: only a few weeks ago fuel-cell company Plug Power, one of the best performing Nasdaq companies so far in 2014, acquired Relion for $US4m to gain direct ownership of fuel-cell manufacturing technology. While the sector may see further changes in the ranks of individual organisations, overall the commercial-scale roll-out of some fuel-cell technology will continue to gain momentum in 2014. 

Fuel-cell cars received a boost last week with the announcement of the ‘H2FIRST’ project by the US Energy Department, which aims to accelerate the design and construction of fuelling stations for vehicles that run on hydrogen. The technology offers the promise of a fossil-fuel replacement, though it is years from being seen as mainstream. One hurdle is the lack of fuelling stations. Under the project, the Department will collaborate with Sandia National Laboratories and the National Renewable Energy Laboratory on designs and materials for hydrogen fuelling stations. Researchers will also share data with state agencies, automakers and hydrogen suppliers to reduce the cost and time needed to develop the infrastructure.

In the meantime, the battle for Alstom’s power and grid business continues: General Electric’s $US16.9bn bid for the French company’s energy business is not good enough, said French President Francois Hollande on May 6.

“There is another offer and we will see if it will be a better one,” he said, referring to a counter-proposal from Germany’s Siemens. “We want the offers to be improved on jobs.”

Both approaches could have a tough time clearing European competition hurdles, perhaps especially the possible Siemens-Alstom tie-up given its high market share in the region, according to Bloomberg New Energy Finance.

Alstom is not the only cross-border game at play: Rolls-Royce Holdings said on April 30 that it is in talks to sell its power-generation assets to Siemens. An agreement with either Rolls-Royce or Alstom would enable the German company to expand its energy business as it seeks to improve profitability and catch up with rivals GE of the US and ABB of Switzerland. The likelihood of the deal with the London-based company may be influenced by the outcome of the talks with Alstom, though Siemens could execute both deals, it said.

In project news, Boston-based renewable-energy developer First Wind said on May 1 it had closed financing on a 148MW project in Maine. The wind farm with a price tag of $US369m is expected to begin generating power in Q4 2015. Further north, Canadian Solar, the best-performing solar maker in the last year, received a $US105m loan from the National Bank of Canada to build three solar plants in Ontario. Construction on the first project will begin in July. In Latin America, Corporacion America got a $US176m loan to complete two wind farms in Uruguay from a group of lenders led by the Inter-American Development Bank. This marks the company’s first foray into wind power, as the world’s largest private airport operator by number of facilities diversifies into energy and technology. The projects will cost some $US211m and have total capacity of 90MW.

Finally, in Asia, Hong Kong real-estate tycoon Zheng Jianming continues to extend his reach in the solar PV industry, after Shunfeng Photovoltaic International – in which Zheng has a major stake – agreed to buy the inverter and building-integrated PV units of insolvent Sunways of Germany. Shunfeng plans to become a global clean-energy major with a spate of deals including its $US480m acquisition of Wuxi Suntech Power, once the largest panel maker, on April 28. The Sunways deal allows Shunfeng to supply panels and inverters, used to convert solar power into current suitable for the grid. Zheng also owns a 22 per cent stake in LDK Solar – the second-biggest solar wafer supplier by 2012 capacity.

EU carbon

Carbon allowances advanced 2.3 per cent during a week of light trading volumes. European Union allowances for December 2014, the benchmark contract, finished Friday’s session on London’s ICE Futures Europe exchange at €5.24/t, compared with €5.12/t at the close of the previous week.

Front-year EUAs were trading as high as €5.54/t on Wednesday morning. Only 12.4Mt of December 2014 EUAs exchanged hands that day, compared with the 15-day moving average of 19.6Mt. EUA market activity was relatively light on most days, as Thursday was a public holiday in many European countries.

December 2014 EUAs dropped to a low of €5.13/t on Friday as data showed emitters exchanged fewer United Nations offsets than estimated for EU contracts, signalling lower future demand.

UN Certified Emission Reduction credits for December 2014 lost €0.01/t last week to end at €0.15/t.

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