Battery stocks are publicly traded companies whose business involves the manufacture of batteries, battery components, or battery management systems used to store electricity through electrochemical means.

This list was last updated on 3/21/2022.

If you know of any battery stock that is not listed here and should be, please let us know by leaving a comment. Also for stocks in the list that you think should be removed.

The post List of Battery Stocks appeared first on Alternative Energy Stocks.

Alternative Transportation Stocks are publicly traded companies that offer transportation options that use less fuel per passenger-mile or freight-mile than traditional options. Includes mass transit (both rail and bus), bicycles, and two wheel vehicles.

A. P. Moller – Maersk Group (MAERSK-B.CO)
Accell Group (ACCEL.AS)
Blue Bird Corporation (BLBD)
Bombardier Inc (BDRBF)
Construcciones y Auxiliar de Ferrocarriles (0MK5.L)
CSR Zhuzhou Electric Locomotive (ZHUZF)
Canadian National Railway Company (CNI)
Canadian Pacific Railway Limited (CP)
CSX Corporation (CSX)
Cubic Corporation (CUB)
Dorel Industries (DIIBF)
Firstgroup, PLC (FGP.L)
Giant Manufacturing (9921.TW)
Grande West Transportation Group Inc. (BUS.V)
Great Lakes Dredge and Dock (GLDD)
Greenbrier (GBX)
L. B. Foster (FSTR)
Merida Industry Co. Ltd. (9914.TW)
National Express Group (NEX.L)
New Flyer Industries (NFYEF, NFI.TO)
Norfolk Southern Corp. (NSC)
Piaggio & C.S.p.A (PIAGF)
Power REIT (PW), Power REIT 7.75% Series A Cumulative Preferred (PW-PA)
Seaspan Corporation (SSW), Seaspan Cumulative Preferred (SSW-PG,SSW-PH,SSW-PD)
Shimano, Inc. Ltd. (SHMDF)
Stagecoach Group PLC (SGC.L)
Stella Jones (STLJF)
Tandem Group PLC (TND.L)
Trinity Industries (TRN)
Union Pacific Corporation (UNP)
Vossloh AG (VOS.DE)
VMoto Limited (VMT.AX)
Wabtec Corporation (WAB)

If you know of any alternative transportation stock that is not listed here, but which should be, please let us know in the comments. Also for stocks in the list that you think should be removed.

The post List of Alternative Transportation Stocks appeared first on Alternative Energy Stocks.

Tom Konrad Ph.D., CFA

The year got off to a spectacular start for my tenth annual Ten Clean Energy Stocks model portfolio. (You can read about the performance in 2016 and prior years here.)  The portfolio and its income and growth subportfolios were up 9%, 8%, and 14%, respectively.  Clean energy stocks in general also did well, with my three respective benchmarks up 2 to 3% each.  (I use the YieldCo ETF YLCO as a benchmark for the income stocks, the Clean Energy ETF PBW as a benchmark for the growth stocks, and an 80/20 blend of the two as a benchmark for the whole portfolio.)  The Green Global Equity Income Portfolio (GGEIP), an income and green focused strategy I manage returned 5%.

Detailed performance is shown in the chart below:

I attribute the impressive January numbers to several factors.

1. Despite anti-climate rhetoric, renewable energy has reached a tipping point, and investors are beginning to realize that (as I said in a recent interview on CNBC Asia) the Trump Administration will be less of a headwind for clean energy than a reduced tailwind.
2. A rebound from December tax-loss selling (SSW-PRG and ASPN).
3. Expected good new materializing (ABY)
4. Unexpected good news (NEP).

I’ll look into these faqctors in detail in the individual stock discussion below.

Stock discussion

Below I describe each of the stocks and groups of stocks in more detail. 

Income Stocks

Pattern Energy Group (NASD:PEGI)

12/31/16 Price: $18.99.  Annual Dividend: $1.63 (8.6%). Expected 2017 dividend: $1.64 to $1.67.  Low Target: $18.  High Target: $30. 
1/31/17 Price: $19.74.  YTD Dividend: $0.  Annualized Dividend: $1.63.  YTD Total Return: 3.9%

Pattern is a Yieldco owning mostly wind projects in North America.  With little news in January, the stock advanced along with other Yieldcos recovering from a Trump-inspired sell off.

8point3 Energy Partners (NASD:CAFD)
12/31/16 Price: $12.98.  Annual Dividend: $1.00 (7.7%). Expected 2017 dividend: $1.00 to $1.05.  Low Target: $10.  High Target: $20.
1/31/17 Price: $13.54.  YTD Dividend: $0.  Annualized Dividend: $1.00.  YTD Total Return: 4.3%

Solar-only Yieldco 8point3 reported fourth quarter earnings on January 26th.  Although the company upped their guidance and distribution, analysts were not thrilled.  The YieldCo is considering refinancing some of its company level, interest-only debt using project-level amortizing debt.  In terms of safety of the stock, this is a good move because it eliminates refinancing risk.  However, amortizing debt requires payment of both interest and principal, which will reduce cash available for distribution. 

The concern is that this might lead to a future dividend cut, unless the company can continue to grow enough to offset the future principal payments.  Management thinks it can, since they issued guidance for 12% distribution growth in 2017.

Hannon Armstrong Sustainable Infrastructure (NYSE:HASI).

12/31/16 Price: $18.99.  Annual Dividend: $1.32 (7.0%).  Expected 2017 dividend: $1.34 to $1.36.  Low Target: $15.  High Target: $30. 
1/31/17 Price: $18.28.  YTD Dividend: $0.  Annualized Dividend: $1.32.  YTD Total Return: -3.7%

Real Estate Investment Trust and investment bank specializing in financing sustainable infrastructure Hannon Armstrong drifted lower despite a lack of news.  I continue to consider it very attractive at this level.

NRG Yield, A shares (NYSE:NYLD/A)
12/31/16 Price: $15.36.  Annual Dividend: $1.00 (6.5%).  Expected 2017 dividend: $1.00 to $1.10.  Low Target: $12.  High Target: $25. 
1/31/17 Price: $16.25.  YTD Dividend: $0.  Annualized Dividend: $1.00.  YTD Total Return: 5.8%

NRG Yield (NYLD and NYLD/A) drifted higher along with other YieldCos on a lack of significant news.  Two activist investors have revealed a stake in NRG Yield’s parent, NRG Energy (NRG).  While they will be pushing for changes at NRG, I don’t expect any significant changes at NRG Yield until its stock price recovers to the point where it again has the ability to raise equity without diluting existing shareholders.

Atlantica Yield, PLC (NASD:ABY)
12/31/16 Price: $19.35.  Annual Dividend: $0.65 (3.4%). Expected 2017 dividend: $0.65 to $1.45. Low Target: $10.  High Target: $30. 
1/31/17 Price: $21.40.  YTD Dividend: $0.  Annualized Dividend: $0.65.  YTD Total Return: 10.6%
 
  Althoughthe news feeds have been silent on the subject, I tweeted some big news at Atlantica Yield on January 13th:

Breaking: $ABY Atlantica Yield receives forbearance from DoE. Should allow annual dividend increase to at least $1.15. Bought @ $19.70

The news came from a 6-K filing with the SEC.  The forbearance means that funds which had been previously trapped at Alanitca’s Mojave and Solana project subsidiaries can now be used at the company level to pay distributions to shareholders.  They related to ownership stakes of its former parent, Abengoa in Atlantica Yield which were reduced because of Abengoa’s bankruptcy.  Atlanica is still working on obtaining similar forbearances for its ACT and Kaxu projects in Mexico, but the Mojave and Solana account for the majority of the outstanding forbearances in terms of the cash flow of the underlying projects.

As I said in the tweet, I anticipate that the next quarter’s dividend will be at least $0.29 ($1.15 at an annual rate) up from $0.16.  The remaining forbearances should allow Atlantica to inc
rease its quarterly distributions to at least $0.36 ($1.45 annually.)  I expect the stock to rise further when the anticipated dividend increase is announced.

NextEra Energy Partners (NYSE:NEP)
12/31/16 Price: $25.54.  Annual Dividend: $1.36 (5.3%).  Expected 2017 dividend: $1.38 to $1.50.  Low Target: $20.  High Target: $40. 
1/31/17 Price: $31.53.  YTD Dividend: $0.  Annualized Dividend: $1.41.  YTD Total Return: 23.45%

NextEra Energy Partners released its fourth quarter earnings on January 27th.  Not only did it extend its 12% to 15% distribution growth outlook for the next five years, but the company’s parent, NextEra (NEE) agreed to reduce its Incentive Distribution Rights (IDR) from 50% of incremental distributions to 25%.  With more of the money going to NEP shareholders, it seems much more likely that NEP will be able to achieve its aggressive distribution growth target.

Other Income Stocks

Covanta Holding Corp. (NYSE:CVA)
12/31/16 Price: $15.60.  Annual Dividend: $1.00 (6.4%).  Expected 2017 dividend: $1.00 to $1.06.  Low Target: $10.  High Target: $30. 
1/31/17 Price: $16.1.  YTD Dividend: $0.  Annualized Dividend: $1.00.  YTD Total Return: 3.2%

Waste-to-energy developer and operator Covanta drifted upwards without significant news.  The stock did have a hiccup on January 9th when it was revealed that county officials in Maryland were investigating a fire at one of its facilities in December.  I don’t expect this investigation will have a significant impact on the company’s profitability going forward. 

The company is preparing to commence operations at its newest facility in Dublin, Ireland in March.

Seaspan Corporation, Series G Preferred (NYSE:SSW-PRG)
12/31/16 Price: $19.94.  Annual Dividend: $2.05 (10.3%).  Expected 2017 dividend: $2.05.  Low Target: $18.  High Target: $27. 
1/31/17 Price: $22.70.  YTD Dividend: $0.51.  Annualized Dividend: $2.05.  YTD Total Return: 16.4%

The stock and preferred shares of leading independent charter owner of container ships recovered strongly in January in what I believe was a rebound from tax loss selling.  They have fallen back significantly in the first couple days of February when Morgan Stanley initiated coverage of the common shares at “Underweight.” 

The reasoning behind this rating rests on a probably cut in the common’s dividend which I also anticipate.  A dividend cut for the common shares will only make the preferred dividends safer, hence the sell-off in SSW-PRG is unjustified, and this is a good opportunity to buy the preferred if you did not get a chance before it rose at the start of the year.

Growth Stocks

MiX Telematics Limited (NASD:MIXT).
12/31/16 Price: $6.19.  Annual Dividend: $0.14 (2.3%).  Expected 2017 dividend: $0.14 to $0.16.  Low Target: $4.  High Target: $15. 
1/31/17 Price: $7.14.  YTD Dividend: $0.  Annualized Dividend: $0.14.  YTD Total Return: 15.3%

Vehicle and fleet management software as a service provider MiX Telematics rose in January, perhaps in anticipation of strong quarterly results to be announced on February 2nd.  I have not finished reviewing these results as I write, but they were very good.

Aspen Aerogels (NYSE:ASPN)

12/31/16 Price: $4.13.  Annual Dividend and expected 2017 dividend: None.  Low Target: $3.  High Target: $10. 
1/31/17 Price: $4.66.  YTD Total Return: 12.8%

Aspen Aerogels rebounded from last year’s lows most likely due to the abatement of tax loss selling, since there was no news of any significance.  The company will release its fourth quarter results on February 23rd/

Final Thoughts

All in all, it was a great January for my model portfolio.  The shock of the Trump victory last November caused clean energy stock to sell off regardless of what the new President and the Republican Congress are likely to do now that they are in control of government.  This sort of panic selling leads to opportunities for calmer investors, and I think this is part of the explanation of my outsized one month gains. 

The pleasant surprises in NextEra Energy Partners’ and MiX Technologies’ earnings, and the anticipated good news from Atlantica Yield added to the gains.  I can only hope that so many of my predictions (not to mention dumb luck) will continue to go my way for the rest of the year.

Disclosure: Long HASI, MIXT, PEGI, NYLD/A, CAFD, CVA, ABY, NEP, SSW-PRG, ASPN, GLBL, TERP.  Long puts on SSW (an effective short position held as a hedge on SSW-PRG.)

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post Ten Clean Energy Stocks For 2017: January Jump appeared first on Alternative Energy Stocks.

Bottom line: Yingli’s new bank loan will be followed by a major restructuring that will force big losses on bond and shareholders, while a new asset-backed bond program to help the broader panel sector raise money will meet with tepid reception.

China is throwing a couple of lifelines to its struggling solar panel sector, including a relatively large rescue package for Yingli (NYSE: YGE), the player in the most precarious position. That package will see a consortium of banks, led by the policy-driven China Development Bank, provide Yingli with 2 billion yuan ($300 million) in funds as the company tries to reorganize its financially strapped balance sheet.

Word of the rescue package comes as media are reporting separately that China is preparing a much bigger lifeline for the sector, by allowing solar panel makers to sell bonds backed by the growing number of solar farms they are self-developing. Such farms provide a steady source of income from the power they generate, and thus should theoretically be more attractive to investors than directly investing in the financially-challenged solar panel makers themselves.

These 2 latest moves come as China’s solar panel makers are still trying to climb out of a 4-year-old downturn caused by a production glut that has stubbornly persisted to the present. A big reason the glut has yet to abate is due to companies like Yingli, which make lower-end product and compete almost purely by offering extremely low prices. Such companies should theoretically go bankrupt in a truly commercial climate. But in this case they are being artificially supported by government entities, who worry about the chaos that such closures might create.

After teetering on the brink of insolvency for much of the last year, YIngli’s situation remains very tenuous, including a massive $500 million net loss in its latest reporting quarter. The company is badly in need of a restructuring to relieve some of its large debt burden, which totaled 10 billion yuan ($1.5 billion) at the end of last September.

It technically defaulted on a bond last year, but later found funds at the last minute to pay most of the money, even as the patience of its bondholders wore thin. (previous post) Now media are reporting the company has just landed the new 2 billion yuan bank loan as part of a temporary measure to help it stay in business ahead of a needed restructuring. (Chinese article)

State-Backed Syndicate

China Development Bank is leading the borrower consortium, which is almost certainly composed exclusively of big state-owned banks that have been ordered by the government to provide the funds. Word of this funding comes just days after earlier media reports that Cinda Asset Management (HKEx: 1359), one of China’s largest asset-managers that specialize in bad debt, was looking to join a group of financial firms that would help Yingli to restructure. (English article)

I suspect these 2 developments are related, and we’ll probably see Yingli announce a major restructuring sometime in the next 2-3 months. It’s clear that bondholders will probably be asked to forgive a big portion of their debt as part of the restructuring, though it’s less clear what will happen to the company’s stock. Stock buyers appear to think they will escape without any damage, based on a recent rally in Yingli shares. But I suspect they could see their equity significantly diluted if Yingli decides to make a major new share issue as part of any settlement with its bond holders.

Next there’s the bigger industry news, which says China is preparing to allow solar panel makers to issue bonds that are backed by income from the solar farms that many are building. (English article) A company called Shenzhen Energy Group broke ground in the area when it was allowed to raise 1 billion yuan last month by selling the first such bonds.

Industry leader Canadian Solar (Nasdaq: CSIQ) has already been moving in a similar direction, announcing plans late last year to spin off its solar plant-building unit for a separate IPO to raise new funds. (previous post) This new plan could help many of the sector’s other players like Trina (NYSE: TSL) and ReneSola (NYSE: SOL) raise much-needed funds through bond issues. But that said, I expect that many of the bonds could get a tepid reception from investors due to man uncertainties about the future of solar power in China and in other countries.

Doug Young has lived and worked in China for 20 years, much of that as a journalist, writing about publicly listed Chinese companies. He currently lives in Shanghai where, in addition to his role as editor of Young’s China Business Blog, he teaches financial journalism at Fudan University, one of China’s top journalism programs.  He writes daily on his blog, Young´s China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China.

The post Beijing Bails Out Yingli, Shareholders Not So Much appeared first on Alternative Energy Stocks.

By Harris Roen

Alternative energy became a serious market player after the turn of the millennium. Since that time, solar, wind, smart grid and other alternative energy stocks have experienced both strong up and down trends. The forces at work driving these markets are complex, counterintuitive, and sometimes mysterious. This article looks at what has been driving the price of alternative energy markets, and as a result, alternative energy company stocks. Looking ahead, we will also consider what should affect the direction of alternative energy stock prices.

Past trends in Alternative Energy Stocks

The Wilder Hill New Global Index (NEX) is a fitting proxy to track overall alternative energy markets. This index contains companies that “focus on generation and use of cleaner energy, conservation and efficiency, and advancing renewable energy generally.” The chart at right shows some of the clear trends the alternative energy sector has had in the recent past.

The first down channel on the chart coincides with a general stock market slump. This drop started during the eight month recession which began in March 2001.

By 2003, alternative energy stocks started to turn around. This marked the beginning of a fantastic five year run, as investors started noticing wind power and photovoltaics were becoming economically viable alternatives to traditional electric generation. Annualized returns in this five year period averaged a remarkable 38%!

The Great Recession then hit in December 2007, just as alternative energy stocks appeared to be ascending into nosebleed territory. As a result, prices came crashing down a painful 71% in about a year. This outstripped the distressing declines the stock market in general had at that time.

After this crash, no clear trend emerged until the end of 2012, when the next up-channel started. At that time, investors felt that alternative energy stock prices better reflected the economic realities of the underlying business, and started buying again. There is likely another reason, though, that it took five years for alternative energy markets to recover. Psychologically, after getting severely burned in the crash of 2008, it took a long time for investors to feel comfortable dipping their toes back in the water.

Following the uptrend that went from 2012 to the beginning of 2014, there was a noteworthy giveback. The NEX fell 21% in about nine and a half months. Much of that giveback has been regained. It remains to be seen if the current trend will continue to be positive, or if we have entered into a sideways market.

Do Fossil Fuel Prices Drive Alternative Energy Markets?

Are fossil fuel prices the main driver of failure or success of green energy companies? Though this seems like a reasonable theory, the answer, in my analysis, is that it depends.

Alternative Energy versus Oil

Most of the larger alternative energy stocks are multinational corporations that are part of an international economy. As a comparison, crude oil prices are good indicator of global fossil fuel values. Oil is a worldwide commodity that can more easily flow to markets than coal or natural gas. The latter two fossil fuels are subject to local supplies and disruptions, so prices can range widely by region.

The chart at right shows crude oil (Cushing OK spot) as compared to the NEX over two time periods. From 2001 to 2009, oil and alternative energy prices were very strongly linked. For you math wonks, the two had a correlation coefficient of 0.87, which is extremely significant. This makes sense, since a rise in oil prices would mean that other energy alternatives become more attractive. From 2010 to the present, the NEX had a slight negative correlation to oil prices. The two markets did not exactly go in opposite directions, but they had virtually no corresponding movement.

A further reason for the 2002-2009 correlation is that the economy was humming along very well at that time. This helped fuel investor optimism that the market would continue to grow for solar, wind, and the like. Similarly, oil became a strong proxy for the stock market at that time, as speculators started investing heavily in oil. They believed that as the global economy expanded, there would be more demand for oil, thus raising the prospects for oil prices. In essence, oil became a proxy for the stock market.

The correlation between oil and the stock market remained strong for a decade, but finally started to diverge at the end of 2013. Since then there has been a strong negative correlation.

Oil prices are now being affected more by supply and demand. Much of this has to do with the North American oil and natural gas boom, which is injecting an abundance of supply right where it is being used. This not only tips the supply/demand equation by reducing U.S. oil imports, but also mitigates the fear that oil prices will skyrocket when a crisis crops up in the Middle East. For this reason, I expect any rise in oil prices going forward will positively affect alternative energy stocks.

Alternative Energy versus Natural Gas

Often, the decline in alternative energy electricity generators such as wind and solar has been attributed a drop in natural gas prices. There is a correlation between the two, though it is not as strong as one might think.

The charts at right show natural gas (Henry Hub LA spot) compared to the NEX. There is a clearly a correlation between the two, though it is somewhat weak. It is also interesting to note that at starting around 2015, there was a divergence between natural gas prices and the NEX.

Prospects for Alternative Energy Stocks

Though no one can tell with certainty where alternative energy stocks will head in the future, there are factors that can shed some light on the long-term prospects for this sector. These include increased manufacturing efficiencies, financial innovations and energy policy.

Efficiencies

Much of what many alternative energy companies do is similar to tech sector stocks. As product design and production engineering keeps improving, manufacturing efficiency can greatly help a company’s bottom line. Whether its photovoltaics, LED lighting or wind arrays, the cost of production continues to drop for green economy companies. This trend shows no signs of abating, which bodes well for alternative energy investors.

Financial Innovations

The alternative energy sector has profited greatly from new and innovative financial models. Companies like SolarCity (SCTY) and SunPower (SPWR) have benefited from various financial arrangements that allow consumers to install solar with no upfront costs. These include lease arrangements, power buyback agreements, and securitization of tax benefits.

Another innovative financial model to benefit alternative energy is the advent of renewable YieldCo’s. These are companies that bundle solar and wind generating assets into predictable cash flows that are paid out in dividends. This innovation allows green investors can choose from several companies with strong yield attributes.

Investors love dividends, especially in this low interest rate environment. Any added yield an investor can put in their portfolios is of great value. YieldCo’s should continue to attract investors and lead to higher stock prices.

These types of financial innovation reflect a maturing of the alternative energy sector, which I see as a good sign. As long as these products have strong fiscal underpinnings, the prospects for long-term growth remain healthy.

Energy Policy

Because of the public good that results from reduced fossil fuel use, alternative energy has benefitted from government policies supporting the industry. Indeed, targets and incentives remain strong internationally, particularly in Europe and Asia. These regions and others continue to be serious in their commitment to solar, wind, energy storage, efficiency and other alternative energy strategies. Domestically, there are two important policy developments to watch, one a carrot and one a stick.

The first important domestic incentive is the Business Energy Investment Tax Credit (ITC). The ITC rebates up to 30% for solar, fuel cells, wind, combined heat and power (CHP) and geothermal. This incentive is scheduled to sunset at the end of 2016. Whether it gets renewed or not will affect the rate at which renewable projects go forward. This will cause concern for investors.

The second policy development is the Clean Power Plan. These proposed rules from the EPA target pollution reduction from power plants, and will have a vast affect on how energy gets produced and consumed in the country. Essentially each state has an emission target, which will force it to find ways to reduce carbon emissions. There has been some strong pushback from many states, especially those heavily reliant on coal for production electricity. The rule making process will likely take a few years and several court cases to resolve, but if the Clean Power Plan remains mostly intact, it will accelerate renewable energy projects in a big way.

Conclusion

By keeping an eye to the ground on fossil fuel prices, energy policies and other factors, investors can go far to understanding prospects for alternative energy stocks. There will undoubtedly be up and down swings ahead, but there are enough positives underlying the sector that we remain bullish for the long-term.

DISCLOSURE

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is also possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

About the author

Harris Roen is Editor of the “ROEN FINANCIAL REPORT” by Swiftwood Press LLC, 82 Church Street, Suite 303, Burlington, VT 05401. © Copyright 2010 Swiftwood Press LLC. All rights reserved; reprinting by permission only. For reprints please contact us at cservice@swiftwood.com. POSTMASTER: Send address changes to Roen Financial Report, 82 Church Street, Suite 303, Burlington, VT 05401. Application to Mail at Periodicals Postage Prices is Pending at Burlington VT and additional Mailing offices.
Remember to always consult with your investment professional before making important financial decisions.

The post Alternative Energy Stock Returns, Past and Future appeared first on Alternative Energy Stocks.

Jim Lane
 

Stopwatch photo via BigStock

A major push from Obama on energy.
From DOE: “Liquid fuels demand can be sufficiently reduced so that biomass can meet all liquid fuel needs.”
What’s up? What is an Energy Security Trust, anyway? The Digest’s 10-Minute Guide tells all.

In an address at the Argonne National Laboratories on Friday, President Obama said:

“You see, after years of talking about it, we’re finally poised to take control of our energy future.  We produce more oil than we have in 15 years.  We import less oil than we have in 20 years…But the only way we’re going to break this cycle of spiking gas prices for good is to shift our cars and trucks off of oil for good.  That’s why, in my State of the Union Address, I called on Congress to set up an Energy Security Trust to fund research into new technologies that will help us reach that goal.

“I’m proposing that we take some of our oil and gas revenues from public lands and put it towards research that will benefit the public, so that we can support American ingenuity without adding a dime to our deficit…devising new ways to fuel our cars and trucks with new sources of clean energy – like advanced biofuels and natural gas – so drivers can one day go coast-to-coast without using a drop of oil.

“And in the meantime, let’s keep moving forward on an all-of-the-above energy strategy.  A strategy where we produce more oil and gas here at home, but also more biofuels and fuel-efficient vehicles; more solar power and wind power. We can do this.”

A companion study released the the Department of Energy was, in its way, more ambitious and more specific: “TEF does not project that all liquid fuels will be eliminated from the future transportation sector, but rather that demand can be sufficiently reduced so that biomass can meet all liquid fuel needs.”

The Energy Security Trust. Is it a new idea?

No. In his 2013 State of the Union address, President Obama called on Congress to create an Energy Security Trust Fund, which would free American families and business from painful spikes in gas prices. The President’s plan builds on an idea that has bipartisan support from experts including retired admirals and generals and leading CEOs, and it focuses on one goal: shifting America’s cars and trucks off oil entirely.

How does it work?

Over 10 years, the Energy Security Trust will provide $2 billion for critical, cutting-edge research focused on developing cost-effective transportation alternatives. The investments will support research into a range of technologies – things like advanced vehicles that run on electricity, homegrown biofuels, and domestically produced natural gas. It will also help fund a small number of real-world experiments that try different transportation techniques in cities and towns around the country using advanced vehicles at scale.

Does it involve new taxes?

No. The funding will be provided by revenues from federal oil and gas development, and will not add any additional costs to the federal budget.

President Obama’s complete remarks are where?

They’re here.

Does the White House’s have a short take on the Energy Security Trust?

Yep. Here you are.

What is the Transport Energy Futures (TEF) study?

It’s a new study from the U.S. Department of Energy, the National Renewable Energy Laboratory, and Argonne National Laboratory that finds the United States has the potential to reduce petroleum use and greenhouse gas (GHG) emissions in the transportation sector by more than 80% by 2050 – and proposes pathways towards that goal.

What is the strategy?

• Stopping Growth in Transportation Sector Energy Use
• Using More Biofuels
• Expanding Electric and Hydrogen Technologies

What’s the overall 15-point Obama Energy Strategy, again?

1. Challenges Americans to double renewable electricity generation again by 2020.
2. Directs the Interior Department to make energy project permitting more robust.
3. Commits to safer production and cleaner electricity from natural gas.
4. Supports a responsible nuclear waste strategy.
5. Sets a goal to cut net oil imports in half by the end of the decade.
6. Commits to partnering with the private sector to adopt natural gas and other alternative fuels in the Nation’s trucking fleet.
7. Establishes a new goal to double American energy productivity by 2030.
8. Challenges States to Cut Energy Waste and Support Energy Efficiency and Modernize the Grid.
9. Commits to build on the success of existing partnerships with the public and private sector to use energy wisely.
10. Calls for sustained investments in technologies that promote maximum productivity of energy use and reduce waste.
11. Leads efforts through the Clean Energy Ministerial and other fora to promote energy efficiency and the development and deployment of clean energy.
12. Works through the G20 and other fora toward the global phase out of inefficient fossil fuel subsidies.
13. Promotes safe and responsible oil and natural gas development.
14. Updates our international capabilities to strengthen energy security.
15. Supports American nuclear exports.

Where’s the Fact Sheet on that?

Right here.

Why the transport sector, specifically?

The transportation sector accounts for 71% of total U.S. petroleum consumption and 33% of U.S. total carbon emissions.

What are the 9 Interconnected reports that make up the overall TEF study?

1. Deployment pathways issues including the development of, transition to, and challenges of advanced technology
2. Non-cost barriers to advanced vehicles such as range anxiety, refueling availability, technology reliability, and consumer familiarity.
3. Opportunities to improve non-light-duty vehicle efficiency for medium- and heavy-duty trucks, off-road vehicles and equipment, aircraft, marine vessels, and railways
4. Opportunities for switching modes of transporting freight, such as moving freight from trucks to rail and ships.
5. Infrastructure expansion required for deployment of low-GHG fuels, including electricity, biofuels, hydrogen, and natural gas
6. Balance of biomass resource demand and supply, including allocations for various transportation fuels, electric generation, and other applications.
7. Opportunities to save energy and abate GHG emissions through community development and built environment strategies
8. Trip reduction through mass transit, tele-working, tele-shopping, carpooling, and improvement of vehicle performance through efficient driving
9. Freight demand patterns, including trends in operational needs and projections of future use levels.

How much biofuels use does the TEF study anticipate?

Up to 100 percent of fuel needs, if the US hits its 2050 fuel efficiency, hydrogen fuel, and electrification goals as well. Even at the EIA baseline projected fuel demand in 2050, biofuels could supply as much as 50 percent of the jet fuel market, and 30 percent of the gasoline and diesel markets if EERE biofuel technology goals are met. Getting to the point where biomass could provide 100 percent of vehicle liquid fuels requires reducing the need for fuel through the efficiency and demand management measures described above, including deployment of electricity or hydrogen fuel alternatives.

Will this require an avalanche of infrastructure?

Some. “While new fuel types require new infrastructure, the share of infrastructure cost within total fuel costs is very small (1.5-3 percent), and these costs can be made up for in fuel cost savings of more efficient advanced vehicles.”

Where can I start to dig deeper into the overall plan and the TEF study?

You can start here at the TEF home page.

Who was responsible for TEF?

TEF is a collaboration between EERE, the National Renewable Energy Laboratory (NREL), and Argonne National Laboratory (ANL). The project benefitted from the input provided by a steering committee that included some of the nation’s foremost experts on transportation energy from the Environmental Protection Agency (EPA), the U.S. Department of Transportation (DOT), academic researchers, and industry associations.

What is NEPA and what is happening there?

NEPA is the National Environmental Policy Act of 1970, a product of the Nixon Administration.

Er, Nixon? What’s new there?

The President’s strategy includes requiring federal agencies, under NEPA’s authority, to include climate change impact in reviewing proposed projects. For example leases to drill for coal, or export coal to China, or construct oil pipelines like the Keystone XL pipeline, could be reviewed not only for air pollution and water fouling, but for overall greenhouse gas impact.

Are the changes in NEPA reviews ho-hum, or a big deal?

Big deal. Brendan Cummings, senior counsel for the Center for Biological Diversity told Bloomberg that the result will be “a major shakeup in how agencies conduct NEPA” reviews.

Does the President have this authority under NEPA?

Generally, yes. NEPA grants a right of Federal review of proposed projects for environmental impact and climate change certainly falls broadly within that category. The devil is going to be in the details after all, how much specific contribution to a problem like climate change be attributed to a single project?

Is a NEPA review capable of derailing a project?

No. A NEPA review is, at the end of the day, aimed at producing a thorough vetting process, rather than a specific outcome. Projects go through NEPA reviews there is a robust commentary opportunity but regulators, in the end, make decisions on permits. NEPA does establish a forum for introducing or reviewing data that will be used in a regulator’s decision or, in lawsuits that may be filed to reverse a ruling.

Overall, is there going to be opposition from the right on the Energy Security Trust?

Forbes’ Houston-based energy columnist Christopher Helman writes: “This is a terrible idea and a backdoor to the imposition of a nationwide carbon tax that congress should not allow to pass.

“There is absolutely no reason why we need a dedicated Energy Security Trust to fund the national labs, or to fund any kind of alternative energy research. If congress wants to fund research it can pass a bill to fund research…Isn’t congressional appropriation how the federal government is supposed to pay for such stuff?

“Then consider that the Department of Energy has in recent years built up an insanely terrible record of wasting taxpayer money by directing funds to private companies, many of which have simply gone belly up (but not before paying lavish bonuses to executives).

Why is there opposition from the left?

Here’s some flavor. “This approach will only encourage more dirty energy production…[and] doesn’t create any additional cost for using fossil fuels, thus creating no incentive for firms to divert resources into safer, cleaner and more renewable sources of energy,” Tyson Slocum, director of Public Citizen’s energy program, told bizjournals.com.

Disclosure: None.
Jim Lane is editor and publisher  of Biofuels Digest and BioInvest Digest where this article was originally published. Biofuels Digest is the most widely read Biofuels daily read by 14,000+ organizations. Subscribe here.

The post A 10-Minute Guide to Obama’s New Energy Policy appeared first on Alternative Energy Stocks.

Tom Konrad CFA

When Lime Energy (NASD:LIME) reported accounting problems, including the possibility of fictitious revenue on July 17th, investors abandoned the stock, unwilling to own a company in which they knew the financial statements to be misstated.   Over the next two weeks, Lime found a floor around $0.90 (down from over $2 on July 16th), as those investors who would sell at any price were replaced by those who, like me, feel that $0.90 is less than any reasonable estimate of LIME’s true value even in liquidation.

Volume then dried up and the stock traded in the $0.90-$1 range until August 21st, when Lime received a delisting notice from NASDAQ, for missing its quarterly reporting deadline.   This was expected, since LIME’s quarterly report is being delayed until the company can fully investigate the accounting difficulties, which run back to 2010.

Despite the fact that Lime has up to 180 days to regain compliance with NASDAQ reporting requirements, this triggered another, smaller wave of selling from August 21st until September 7th, with the stock trading in the $0.70 to $0.75 range.

Starting on September 10, trading volumes again dropped, and the stock price began to jump around in the $0.70 to $0.82 range as volume sellers disappeared, and even small purchases could send the price up as much as $0.10.

With the large sellers gone, I anticipate that LIME will not again dip below $0.70 unless there is more negative news before the company files its second quarter report and corrects the previous accounting filings.

In terms of possible negative news, NASDAQ could issue another delisting notice based on LIME’s failure to maintain a $1 stock price for the last 30 days,  but I expect if this were going to happen, it would have happened already.  LIME will need to get its share price over $1 a share for 10 days, but filing audited financials should take care of both problems (unless the result of the audit is much worse than I anticipate.)

Conclusion

Although a large cloud of uncertainty still hangs over Lime Energy as we await the results of the company’s internal investigation, it looks to me as if we are unlikely to see a stock price below $0.70.   In a worst case scenario, Lime could be liquidated for something near its tangible book value of $1 per share, so the current $0.70 to $0.85 share price range includes a substantial margin of safety.

With selling pressure abated, large investors will be unable to buy the stock without greatly increasing the current price.  On the other hand, patient small investors still have an opportunity to  benefit from a substantial upside move when the company completes its internal investigation and dispells much of the uncertainty which is currently depressing the stock price.

Disclosure: Long LIME

This article was first published on the author’s Forbes.com blog, Green Stocks on September 16th.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

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by Debra Fiakas CFA

The U.S. Environmental Protection Agency has agreed to review the recently enacted MATS Rule  –  Mercury & Air Toxics Standards that went into effect at the end of 2011.  At least two dozen states and forty utility companies have filed suit against the EPA over the rule, which is intended to cap mercury and other toxic emissions as well as particulates.  The rules particularly impact power plants that use coal-fired boilers to generate electricity.  The EPA provides an interactive map to see where these plants are located.  They are predominantly in the eastern half of the country.

Existing plants have three years to comply.  Industry and power generators should find it child’s play given that the EPA has been in the business of setting emissions standards for decades and it appears industry and power generators have for the most part been compliant.  By most accounts emissions standards have been effective in cleaning up the skies over the U.S.  In the years between 1980 and 2008, sodium dioxide and nitrogen oxide emissions from industry have been cut by 57% and from power generators by 40%.  The reduction in emissions by power generators is all the more remarkable given that electricity use in the U.S. increased by 85% during the same period and the use of coal has tripled.

MATS is the EPA’s first attempt to reduce mercury emissions.  Mercury seeps into the water supply and the food chain through fish.  It can cause nervous system damage and is a particular threat for children and pregnant women.  The EPS estimated that the $9.6 billion estimated cost for compliance could be justified by an estimated $90 billion annual savings in healthcare costs.

However, the hue and cry over MATS is the most shrill in history.  At least four companies with new plants on the drawing board have joined the lawsuits:  White Stallion Energy Center, LLC; Tenaska Trailblazer Partners, LLC (owned by Tenaska, Inc. and Arch Coal (ACI:  NYSE);  the Deseret Power Electric Cooperative; and the Tri-State Generation and Transmission Association. The power industry is complaining that new plants in the cue for construction are not able to comply with MATS as the standards are written today.  Most likely, any technological impediments can be overcome with adequate investment.  I am suspicious the added expenditures would change the economics of these new plants to the point that construction financing could be in jeopardy.

Economists have a term  –  cost shifting.  Put simply it means that the costs of a good or service are moved from the person who incurred the cost to another person who is ostensibly in a better position to pay.  Health insurance is often cited as an example where the costs of healthcare are moved from the shoulders of the person who incurred the doctor bill to the insurance company.  However, this is a contractually agreed upon arrangement and the sick person has already paid the insurance company a premium to assuming the obligation.

Polluters shift costs also.  There is no doubt that there is a cost to be borne for toxic emissions.  If left unchecked, toxic emissions exact a price from everyone in the community.  The public pays for the cost of pollution with poor health and high medical bills.  Yet unlike the contractual arrangement between the insured person and the insurance company, there is no formal agreement with the public to assume the costs of pollution.  It is imposed upon them by lobbyists and lawyers who attempt to block standards that would focus responsibility for pollution on the source.

Southern Company (SO:  NYSE), an electricity generator and wholesaler, has been in the forefront of opposition to EPA standards.  Southern Company reportedly spent over $17.5 million lobbying Congress in between the years 2010 and 2012. Among other arguments, Southern supported proposals to disapprove and delay compliance schedules with MATS, as well as to delay the EPA from setting carbon pollution standards.  Southern is among a number of power generators that belong to the American Coalition for Clean Coal Electricity.

No one wants to see promising investment projects go awry.  No one likes to feel the long arm of government regulation.  Certainly no one wants to see their utility bill increase.  Nonetheless, it is time that polluters stop shifting responsibility to innocent bystanders and pass the costs of emissions to those who benefit from their businesses  –  investors and customers.    It is time to comply with regulations and begin emissions abatement.

Debra Fiakas is the Managing Director of Crystal Equity Research, an alternative research resource on small capitalization companies in selected industries.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein. VNDM is included in Crystal Equity Research’s The Mothers of Invention Index.

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John Petersen

The first quarter of 2012 was the best of times for shareholders of companies that are developing and manufacturing cheap energy storage products like lead-acid batteries, but the worst of times for shareholders of pure-play lithium-ion battery developers. The following table tracks stock price performance in the energy storage and electric vehicle sectors for the first quarter of 2012 and for the twelve months ended March 31st.

Long-term readers will notice that the current list is a good deal shorter than it was in March of last year because of my decisions to delete China Ritar Power (CRTP.PK), Advanced Battery Technologies (ABAT.PK), New Energy Systems (NEWN), C&D Technologies (CHHP.PK), Ener1 (HEVVQ.PK) and Beacon Power (BCONQ.PK) for reasons ranging from reporting deficiencies and changed business models to outright business failures. It’s been a turbulent year.

The best performer for the year and the quarter ended March 31, 2012 was Tesla Motors (TSLA), a stock that investors either love – or love to hate. Tesla is trading at  a 119% premium to its $17 IPO price and one of the market’s most heavily shorted stocks. Where sell side analysts see upside potential to $49, more pragmatic types expect the price to collapse into single digits. While experience tells me that consensus among short sellers is usually right, only time will tell.

It was a solid quarter for several companies that were beaten down over the last year but started to recover some of their long-term price declines during the quarter. The lead-acid group in particular is performing very well. The only group that was down for both the year and the quarter were lithium-ion battery developers. That group’s performance would have been even worse if I hadn’t culled Ener1 after its public stockholders got flushed in a bankruptcy reorganization.

The following summary table shows how the surviving companies in my five tracking categories performed compared to broader market indexes.

My last table for the day provides a summary of some key financial metrics I like to focus on when performing a high level forward-looking analysis of the companies I track. The data is stated in millions, derived from the most recent SEC reports filed by the companies and adjusted for material events including financing transactions and extraordinary losses reported after the date of the most recent financial statements.

For companies with a history of losses, the first number I focus on is working capital. If a company can’t cover expected losses for the next year and make planned capital investments with available funds, it will almost certainly be forced to seek new financing and that can be tough in a turbulent capital market. This year, only three of the companies I follow have clear working capital issues, a significant improvement from last year. While I’ve been impressed with its business development activities over the last year, I’m less impressed with ZBB Energy’s (ZBB) financing activities, which have boosted its share count by 57% while the balance sheet treads water.

A second key metric is the difference between a company’s market capitalization and its book value, which is commonly referred to as blue-sky. Public companies normally trade at a premium to their book value because intangible assets like intellectual property, human resources, industry experience, customer relationships and the like usually have no balance sheet value. When the blue-sky premium is inordinately high, it’s a bright red warning flag. When the blue-sky premium is out of line on the low side, it can hint at significant upside potential.

To simplify comparisons among companies I like to calculate the ratio between blue-sky and book value. The result is a “BS to Book Ratio” that can be quite illuminating.

The most alarming BS to Book ratios in my tracking group, in fact the most alarming BS to Book Ratios I’ve ever seen, belong to Valence Technologies (VLNC) and Tesla Motors. Valence has a $60 million deficit in stockholders equity but it carries a market capitalization of $138 million, which makes its BS to Book ratio infinite. Tesla is a little better since it has $204 million in equity and $182 million in working capital, but it’s sky-high market capitalization of $3.7 billion gives it BS to Book Ratio of 16.4. To put things in perspective, Apple has a BS to Book ratio of 5.2 and it’s become the most successful tech company in history.

Companies with inordinately low BS to Book ratios include Exide Technologies (XIDE) and A123 Systems (AONE) which both trade at a 40% discount to book value. If you adjust A123’s book value to include $128 million of ARRA grant proceeds that aren’t reflected on the face of its balance sheet, the discount to book value is closer to 60%. While both companies have had more than their fair share of problems over the last few quarters, I continue to believe their market prices have fallen to very attractive entry points.

I believe a BS to Book ratio of one is healthy for large established manufacturers and that BS to Book ratios of up to four are reasonable for transition stage companies that have completed their principal product development and are focused on commercializing new technologies. Enersys (ENS) has had a strong run over the last two quarters but still has a way to go before it achieves parity with Johnson Controls (JCI). Since Maxwell Technologies (MXWL) is currently sporting a BS to Book ratio at the top of the reasonable range, I don’t look for it to outperform the market on a go-forward basis. Active Power (ACPW), on the other hand, seems to have significant upside potential if its management can continue to execute. Baring unforeseen negative developments, Axion Power International (AXPW.OB) should be an easy double as revenues continue to ramp and advanced testing programs with a variety of first tier OEMs and battery users mature into orders.

The energy storage sector occupies a unique position global industry because it must prosper as humanity changes the ways it produces and consumes energy. For those who believe conservation of fossil fuels and waste minimization are key elements of our energy future, batteries are essential. They’re also essential to a future powered by intermittent power from the wind and sun. No matter what you believe the path will be, the future simply can’
t happen without cost-effective energy storage. It’s not just a desirable thing – it is an essential thing!

There aren’t any silver bullet technologies or killer apps in the energy storage sector, but there are several emerging trends that will create new multi-billion dollar markets over the next few years. In that rapidly evolving environment, every company that can offer a cost effective product will have more customer demand than it can satisfy. As global demand for cost-effective energy storage increases, so will margins and profitability.

Disclosure: Author is a former director of Axion Power International (AXPW.OB) and holds a substantial long position in its common stock.

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John Petersen

I’m often critical of public lithium-ion battery manufacturers based on objective investment metrics including their financial condition, their results of operations, their potential markets and the fundamental soundness of their business plans, but I don’t usually drill down into thornier issues like technical merit and business execution because those questions are out of my depth and in the words of Harry Callahan, “A man’s got to know his limitations.”

Every once in a while, however, organizations that are competent to evaluate those issues publish analytical reports that can help investors cut through the hype and make better investment decisions. The following “Innovation Grid” graphic from Lux Research that first appeared in a June 2011 report titled, “Using Partnerships to Stay Afloat in the Electric Vehicle Storm,” is a fine example.

In the underlying report, Lux explained that they:

• Evaluated the value of core technologies, the addressable market size, the competitive landscape, and IP position to rank companies along a vertical axis ranging from 1 (Low) to 5 (High);
• Evaluated management strength, profitability, partnership value, overall momentum, and the surrounding environment to rank companies along a horizontal axis ranging from 1 (Low) to 5 (High);
• Evaluated maturity by considering size, stage of development, and annual revenues to rank companies by dot size; and
• Provided a subjective overall ranking ranging from strong caution to strong positive.

Lux developed the Innovation Grid hierarchy of lithium-ion battery producers because its market analysis indicates that global lithium-ion battery manufacturing capacity will exceed demand by a wide margin for the better part of the next decade. Accordingly, it believes the looming capacity glut will force an inevitable consolidation where a handful of dominant manufacturers survive while weaker market participants fail.

Since I didn’t create the Innovation Grid hierarchy, I’m not going to argue about the relative technical and business merits of the various companies. My primary goal today is to observe that some winners of headline grabbing ARRA battery manufacturing grants in August 2009 seem to be technical and/or business laggards, including:

• JCI-Saft, which was awarded $299.2 million dollars in ARRA battery manufacturing grants, recently became a wholly owned subsidiary of Johnson Controls (JCI), and is safely ensconced in the heart of mediocrity;
• A123 Systems (AONE), which was awarded $249.1 million dollars in ARRA battery manufacturing grants but received mediocre grades for technical merit and sub-par grades for business execution; and
• Ener1 (HEV), which was awarded $118.5 million dollars in ARRA battery manufacturing grants but received laggard grades for both technical merit and business execution.

All of them are apparently less attractive business opportunities than Advanced Battery Technologies (ABAT) which was savaged in a trio of articles from Variant View Research in March and April of this year, but is well positioned in the Lux hierarchy.

At Friday’s close ABAT was trading at 30% of book value, 70% of annual sales and 1.9 times trailing-twelve-month earnings. If you want to own stock in a lithium-ion battery company ABAT seems like a far better choice than the subsidized laggards.

Disclosure: None.

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