Some monster-sized deals were announced in the last week.
First up, Royal Dutch Shell plc (RDSA.L) announced its intention to invest $1.6 billion dollars in a 50-50 joint venture with Cosan S.A. (CSAN3.BR). Cosan is one of the top four fuel companies in Brazil, and the joint venture aims to establish a market-leading position in the country’s sugarcane ethanol industry. Combined assets include 4,500 retail sites and ethanol production capacity of 2 billion liters. The deal will also open up avenues for Iogen and Codexis, two cellulosic ethanol companies partially-owned by Shell. Brazil’s ethanol made from sugarcane has a smaller ecological and emissions footprint than US corn ethanol; however tariffs have kept it from making headway in the US and European markets. If this joint venture goes through, Shell will undoubtedly lobby hard to have those trade restrictions lifted.
Mitsubishi Corporation (8058T) and forest products company Weyerhaeuser (NYSE: WY) announced they are jointly exploring biomass-to-energy options in the US. The companies said they are particularly interested in the viability of commercial-scale bio-pellet production. Bio-pellets are a renewable and carbon-neutral fuel made from biomass, which can include by-products from forest management. The biomass is compressed and molded into small, cylindrical pellets. Co-firing bio-pellets with thermal coal has proved effective in reducing greenhouse gas emissions at coal-fired power plants. The two companies are hoping to build a first production facility by 2011, with the possibility of additional facilities to follow. Last week, European company RWE Innogy announced a similar move with plans to build the world’s largest wood-pellet factory in south Georgia.
The US Department of Energy announced that it has closed its $1.4 billion loan agreement with Nissan North America, Inc. (NSANY.PK). The funds will be used to retool the company’s factory in Smyrna, Tennessee to build electric vehicles and their battery systems. Nissan will begin by ramping up production of its vehicle called the Leaf to 150,000 units per year. DOE said factory will create 1,300 jobs and the electric vehicles will conserve up to 65.4 million gallons of gasoline per year–an amount equal to six times the oil spilled by the Exxon Valdez in 1989.
Nissan’s west-coast competitor Tesla Motors, Inc. has filed with the SEC for an initial public offering. The company aims to raise up to $100 million, and it will be the first IPO for an American automaker since Ford (NYSE: F) went public in 1956. Tesla also received a DOE loan earlier this year for a California factory that will build the company’s second vehicle–an all-electric sedan. The company already produces an all-electric sports car, called the Roadster, which sells for $109,000.
The Tennessee Valley Authority (TVA), the nation’s largest public power company, has selected SmartSynch, Inc. to provide a smart metering solution for the rollout of its distributed generation incentives program. TVA’s program is essential a feed-in tariff. The utility will purchase 100% of the power produced by renewable generation systems owned by any of its 9 million residential or commercial customers. The utility will pay retail rate, plus a premium of 12 cents per kilowatt-hour (kWh) for solar and 3 cents per kWh for all other eligible technologies. SmartSynch will provide the backbone technology for metering the program. SmartSynch is unique in that it uses established wireless networks for data delivery rather than proprietary systems. TVA said using infrastructure built by companies like AT&T and Verizon will allow for a faster rollout out the program.
Two US solar companies released quarterly reports showing a continuation of recovery that began in the industry in 2Q09. Solar wafer producer MEMC (NYSE: WFR) shrank its net loss for the quarter on increased sales; and production equipment maker GT Solar (Nasdaq: SOLR) significantly increased earnings–though neither company is back to where it stood a year ago. Ahmad Chatila CEO of MEMC said that pricing pressure has moderated and product volumes continue to increase.
Solar developer Recurrent Energy has signed long-term power purchase agreements (PPA) with Southern California Edison (SCE) for 50 megawatts (MW) of new solar power plants. The deal continues a trend on the west coast as utilities turn to smaller distributed solar projects to meet near-term renewable energy goals. The massive utility-scale solar projects that dominated headlines over the last couple years are being slowed by siting and permitting issues. Recurrent Energy will build and operate three separate solar plants that are expected to be completed in early 2013.
Six marine energy companies will split 22 million pounds ($35.04 million) granted by the British government to speed the deployment of full-scale prototypes. The companies are Atlantis Resources, Aquamarine Power, Hammerfest Strom UK, Marine Current Turbines, Pelamis Wave Power and Voith Hydro. The non-profit group Carbon Trust, which works with the companies, said marine energy will be ready for mass scale deployment by 2020. The industry, which includes tidal and wave power, is generally considered to be about a decade behind the offshore wind power industry.
And lastly, the British government announced a full set of renewable energy tariffs to go into effect in April. The announcement marks a major turnaround for the nation, which has resisted for years the types of tariffs that boosted markets in Germany and Spain. Some critics said the tariffs are not generous enough to jumpstart Britain’s lagging market. But the country is receiving widespread commendation for a first-of-its-kind tariff that will go into effect next year. The so-called Renewable Heat Tariff could be a game changer, paying incentives for customers who produce their own renewable heat, thereby reducing the need for heating oil or natural gas.
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