In 2008, record oil prices caused a big push for clean energy. Demand for Polysilicon drove prices up and producers’ share prices went along with them. Those who controlled the bulk of the supply chain and buffered themselves against spikes were able to make the most out of the panel (price run up). Then oil and the global economy fell off a cliff

According to a report by the International Energy Agency (IEA), it stated that the world would need to invest $45 trillion in order to cut greenhouse gases in half by 2050. When the G8 ministers of environment backed this 50 percent target and did call for it to be officially endorsed, that means any major cuts will require heavy investment in renewable energy resources. The IEA prepared a report, which unfortunately came off as a bit questionable, the study stated that the world will need about 1400 nuclear power plants in order to meet its 50 percent reduction target. But, how would they build 1400 new nuclear power plants while the world have barely enough uranium for the current operations?
Last June, the CEO of Cameco Corporation, the largest uranium producer in the U.S indicated in a press conference that over the next decade, the demand for uranium is expected to increase by three percent annually, but the uranium mining will not be able to keep pace with demand increase. The demand for uranium will exceed supply for the next eight or nine years.

Wind Energy Stocks
As a matter of fact, the domestic wind energy market is currently dominated by overseas players. With the exception of General Electric (GE), foreign competitors, mostly from Europe, have taken a strong position as wind market leaders. In its most recent report, the European Wind Energy Association said that wind has become the leader in terms of new installed energy capacity. By 2020, wind is expected to account for 34 percent of new generating capacity. It will account for 46 percent from 2020 to 2030 and the goal of attaining 12 – 14 percent of Europe’s power from wind by 2020 is well within reach. Moreover, it is expected that 180gigawatts of electricity will be supplied by the wind energy, enough for about 107 million European households. An Energy Department study found that wind energy could generate 20 percent of U.S. elect 2030, as compared today’s one percent, that means by 2030, electricity supply would:

  • Reduce carbon dioxide emissions from electricity generation by 25 percent
  • Reduce natural gas use by 11 percent
  • Reduce water consumption associated with electricity generation by four trillion gallons
  • Increase annual revenues to local communities to more than $1,5 billion

Over the next two years, the Global Wind Energy Council (GWEC) predicts that the world’s installed wind power capacity will practically double to 149,5 G.W. With that kind of growth, the investment opportunities will certainly be lucrative.

The U.N and climate change
The U.N Secretary-General declared that solving the world’s wide water crisis is a top priority. He stressed that global warming could cost the world roughly $20 trillion over two decades to place the world on a different sustainable energy trajectory that means an average investment of one trillion per year. But current U.N. statistics indicate that the global energy industry invests only $300 billion annually in new plants and other new technologies. For its part, the clean-tech industry brought in $117-billion investments in 2007, compared to only $86,5 billion in 2006. Last year was a banner year for clean-tech which for the first time led all other sectors in venture investment. In North America, $5,9 billion was committed for clean-tech. Over $200 billion in government funding worldwide will be spent on clean-tech in 2009; higher than the total private capital expenditures of $150 billion in 2008.

Green bank financing
As if there was not enough money flowing into renewable, legislation has recently been introduced to the U.S. Congress to establish a “Green Bank” to finance clean energy and energy efficiency projects. An alternative energy bank is a creative and needed way jump-starts the private sector’s involvement in renewable and other alternative energy projects. The proposed Green Bank would have an initial capitalization of $10 billion through the issuance of green bonds by the Treasury Department, with a maximum authorized limit of $50 billion in green bonds outstanding at any time. The American Recovery and Reinvestment Act includes more than $ 60billion in clean energy investments for instance:

  • $11 billion for a bigger grid to move renewable energy from the rural places to the cities where it is mostly used
  • $5 billion for low-income home weatherization projects
  • $4,5billion to green federal buildings and cut energy bill, saving taxpayers billion of dollars
  • $6,3 billion for state and local renewable energy and energy efficiency efforts
  • $600 million in green job training programs ($100 million to expand line worker training programs and $500million for green workforce training)
  • $2 billion in competitive grants to develop the next generation of batteries to store energy

In conclusion, energy independence is the greatest investment opportunity of the 21st century.

China and pollution
China, the planet’s biggest polluter, is being forced to “go green” by its own environment. The country has installed “Environmental Liability Insurance ELI” to pay back the victims of its ecological recklessness. China has left the door wide open for everyday investors to take advantage of their green-energy boom. Skies over Beijing and Shanghai are as much as 25 percent darker than in decades past. The North end of the country is drying out; the south is subject to more frequent flooding. The World Bank reported the cost of pollution in China, all due to China’s staggering pollution levels. That is why the Chinese leaders have paved the way for the ELI to become law, used to moderate economic loss associated with ecological hazards. In fact, the Chinese clean-tech is estimated to hit $186 billion in 2010 and $555 billion in 2020. This fund specified to be distributed in three ways to win “green China” as follows.
First, the country focuses on expanding its wind energy capacity to grow by 200 percent between 2008 and 2012; more than twice the estimates for the U.S. China’s year-to-year growth average for wind energy is 31,6 percent. In the last year, the country signed no less than 13 wind energy contracts, including a $315 million deal with Spain’s Gamesa for 405 wind turbines to be installed at seven wind farms across China.
Second, China’s solar power capacity is set to increase by 255 percent in 2012, with yearly growth 37,3 percent. China will have the largest solar power station in the world in 2011, which produces 100 megawatt. Noting that China is the world’s main producer of solar cells and modules and due to its low production costs, China is expected to be the largest supplier of solar materials to Europe and the U.S.
Third, the country is witnessing prosperity of electric vehicle market. It is expected that hybrid electric vehicle market to surge by 20 percent per year from 2009 to 2012. Moreover, hybrid and electric vehicles will account for an estimated 10 percent of all auto sales by 2015. Now, China is anxious to take on the global market, and plans to enter the American market as soon as 2010.

Egypt and renewable energy
In a sunny country like Egypt, the governmental officials should adopt policies to focus on solar energy. As they can prepare tech- knowledge map for this purpose, most worldwide countries researchers carried out projects in converting solar light or heating to energy. In the U.S, Europe and some Asian countries, the trend in recent years has been for government bodies to channel funds to non-governmental institution, especially universities, for environmental research. The Egyptian environmental legislation is wide ranging. It covers the entire expanse of environmental issues, uses all forms of legislative instruments, administrative orders, laws regulations and by-laws and of course, is linked to international environmental law. The country’s environmental legislation encompasses laws for the protection of nature and natural resources and the safe treatment of contaminants and pollutants. The public policy should adopt the renewable energy policy targets, which already exist in roughly 66 countries around the world, and public policies to promote renewable energy use have become more common in recent years. At least 60 countries, 37 developed and 23 developing countries have some type of policy to promote renewable power generation. The IEA estimates that nearly 50 percent of global electricity supplies will need to come from renewable energy sources in order to halve carbon dioxide emissions by 2050 and minimize climate change impacts. That is why the lawmakers should clearly declare that the year 2009 is an upsurge in renewable energy and necessary procedures to be considered, also incentives, subsidies, loan programs and tax credits to be authorized. The principal driver of today’s rapid renewable energy growth is the public sector that can play a larger role in 2009 and beyond, due to clean-tech’s potential to provide significant economic and green job benefits, and the need for clean-tech products and services to meet demands created by energy, water and climate policies.
In conclusion, renewable energy uses will create new thousands of jobs to work in this field that includes miscellaneous processes of manufactures and supplies, and will certainly minimize depending on natural gas as source of feed to electrical power stations which can be diverted into export to increase cash inflows. The policy can accelerate economic growth and job generation through the clean-tech sector. The cooperation and coordination between petroleum sector and electricity sector is direly needed in this concern.

By Mostafa Mabrouk
Economic Consultant, Ganope

Download