So, How’s Your Green Energy Stock Doing?
Guest post By Steve Goreham Originally published in The Washington Times
Is green energy a fad that has run its course? The investment community seems to think so. RENIXX® World, the Renewable Energy Industrial Index of the world’s top green energy companies, hit an all-time low below 146 on November 21, down more than 90 percent from the December 2007 peak.
The RENIXXindex was established in 2006. It’s composed of the world’s 30 largest renewable energy companies with more than 50 percent of revenues coming from wind, solar, biofuel, or geothermal energy, or the hydropower or fuel cell sector. The index includes equipment producers, such wind turbine companies Vestas (Denmark), Gamesa (Spain), and Suzlon (India), solar equipment companies such as First Solar (USA), Suntech Power (China), and Sun Power (USA), and also utilities such as Enel Green Power (Italy) and China Longyuan Power Group. Of the 30 companies, 10 are headquartered in China, 10 in Europe, and 7 in the US.
During the heydays of 2007 and 2008, the RENIXX index was on a roll. Former Vice President Al Gore’s book An Inconvenient Truth reached number one on The New York Times best seller list in July, 2006. His documentary movie by the same name became a worldwide hit the same year. In December 2007, Mr. Gore shared the Nobel Peace Prize with the Intergovernmental Panel on Climate Change. The world was whipped into global warming frenzy.
Subsidies and mandates for green energy existed for many years, but during 2006—2008 governments redoubled the emphasis on renewables. California enacted the Global Warming Solutions Act in 2006, establishing greenhouse gas emissions targets and renewable mandates. Illinois, Michigan, and other states passed or strengthened Renewable Portfolio Standards, requiring electrical utilities to buy an increasing percentage of renewables or pay fines. The European Union approved the Climate Action and Renewable Energy package in 2008, requiring increased renewable energy and biofuel use and tighter emissions restrictions.
Money poured into green energy stocks. Kevin Parker, Director of Global Asset Management at Deutsche Bank, talked about Mr. Gore and a green investment fund that the company created: “He [Al Gore] impressed us all at Deutsche Bank Asset Management. We invited him to an internal meeting in April, 2007 during which we discussed the issue of climate change extensively. A few months later, he received the Nobel Peace Prize for his commitment. We then created a fund that invests in companies that position themselves as climate-neutral. Within two months almost 10 billion dollars flowed into this fund. Can you imagine? 10 billion! There has never been such an overwhelming success.” The RENIXX index rocketed to over 1,900 in December of 2007.
But the subsidy-driven green energy wave soon hit a brick wall of fiscal reality. Spain paid solar operators up to ten times the rate for conventional electricity with a 20-year subsidy guarantee. With a guaranteed annual return of 17 percent, every hombre entered the solar business, making Spain the largest solar cell market in 2008. But the nation’s subsidy obligation soon mounted to $36 billion dollars. In 2009, Spain cut the subsidies and its solar market dropped by 80%.
In Germany, feed-in tariffs of eight times the market rate resulted in the installation of over one million roof-top solar systems by 2010. But the 20-year guarantee also produced a subsidy obligation of over $140 billion. German electricity rates climbed to the second highest in the world and continue to climb to pay for green energy. To stop the bleeding, Germany cut feed-in subsidies three times in 2011 and announced a complete phase-out by 2017. Spain, Germany, Italy, Netherlands, the United Kingdom, the United States, and other nations cut subsidies for wind, solar, and biofuels during the last three years.
At the same time, solar manufacturers built huge capacity to meet expected demand for green energy. But with cuts in subsidies, demand crashed and so did solar cell prices. Dozens of companies went bankrupt, such as German companies Solon and Solar Millennium, and US-based Solyndra.
The failure of global climate negotiations also drove the RENIXXindex down. Investors expected a binding agreement from negotiations, but no pact could be reached at the 2009 Copenhagen, the 2010 Cancun, or the 2011 Durban conferences. The current climate conference in Doha, Qatar is also unlikely to produce a binding agreement.
It’s interesting to note that a single oil company, Exxon Mobil, has a market capitalization of over $400 billion, or about 40 times the capitalization of the RENIXX index of the world’s top 30 renewable companies. It looks like investors are betting on oil and not green energy.
Steve Goreham is Executive Director of the Climate Science Coalition of America and author of the new book The Mad, Mad, Mad World of Climatism: Mankind and Climate Change Mania.
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Mike says:
December 6, 2012 at 5:31 pm
Really?
>>>>>>>>>>>>>>>>>>>
Excellent first crack at it Mike! You’re on your way to a real discussion of actual science. Let’s go through your points one at a time, shall we?
1) Carbon dioxide has a variable radiation absorption profile. It is transparent to sunlight, but opaque to infrared.
REPLY: No, the absorption profile of CO2 is static, not variable. The sun radiates at all frequencies, as does the earth (look up the work of Max Planck if you’d like to know more). CO2 has an absorption band at about 15 microns. Since only a tiny portion of the sun’s radiance (proper term, not “sunlight”) is in that band, it doesn’t change the amount of energy the earth absorbs from the sun. A significant portion of the earth’s radiance is in this band, and CO2 does absorb and re-radiate that.
2) The earth’s heat balance is determined by the amount of sunlight absorbed by the earth vs the amount of infrared radiation radiated.
REPLY: No. At equilibrium, the incoming energy absorbed and the outgoing energy are exactly the same. (Look up Stefan-Boltzmann Law if you would like to know more). Since CO2 increases don’t change the amount of energy absorbed, they don’t change the temperature of the earth system as a whole at all (SB Law again). What they do is absorb and re-radiate energy which results in a change in the temperature profile from earth surface to TOA (Top of Atmosphere). In theory, this should result in a warmer surface. How much warmer is a matter of hot debate.
3) Excess carbon dioxide from the burning of fossil fuels to power industrial actiivity has accumulated in the atmosphere, raising the concentration of CO2 from ~280 parts per million in pre-industrial times to 394 ppm now, and the rate is still rising.
Yes. You got one right, congrats. It may interest you to know, by the way, that CO2’s effects are logarithmic. This is why warming effects of CO2 are expressed as “degrees per doubling” of CO2. So, if the estimates of 1 degree of warming per doubling of CO2 are correct, and water vapour feedback adds another 2 degrees, we do the math and discover that the CO2 increases we have so far should have added almost 60% of one doubling, or close to 2 degrees over and above natural warming trends from before CO2 started to rise. Instead, we’ve seen no increase in the rate of temperature rise for the last 400 years, and it has actually been flat or declined (depending on which temperature record you choose) for the last 16 years.
4) This CO2 concentration is higher than any level experienced in the history of humanity.
REPLY: Well you might be right on that one. On the other hand, we’ve only had high quality data since about 1960, a fraction of human history. On the other hand, we do have some less accurate measurements from a century before that done by various scientists, and some of them do show higher levels of CO2 in the past. More importantly however, the ice core and other records that are considered highly reliable by the most ardent of AGW scientists indicate that the earth has had levels of CO2 in the thousands of ppm in the past, at temperatures lower than we have now. It may also be of interest to you to know that most plants do best in greenhouses when they are exposed to 2000 to 3000 ppm of CO2, suggesting that they in fact evolved in a CO2 rich atmosphere.
5) CO2 has drastically lowered the amount of infrared radiation radiated into space by the earth, causing the earth to rapidly accumulate heat.
REPLY: No. Per above, CO2 doesn’t change the amount of energy absorbed from the sun, so it doesn’t change the temperature of the system as a whole (SB Law again). What it does is interrupt the flow of infrared from the earth to space, with some of the atmosphere in theory becoming colder and some warming in theory occurring at earth surface. But the total amount of energy absorbed and radiated remains the same.
6) Excess heat is causing increased surface temperatures and climate instability. 2000-2010 was the warmest and most natural-disaster prone decade in record. 2010-2020 will almost certainly surpass it, resulting in at the very least billions of dollars of economic damage – in fact, Munich Re, one if the largest reinsurance companies in the world, has identified greenhouse emission-driven climate change as the cause of increasing extreme weather and resultant insurance payouts, and as an extreme challenge to both the insurance industry (society’s principal risk identification and management industry) and to the global economy in general.
REPLY: Well, that’s a whole lot of points all rolled into one. For starters, Munich Re is more profitable if they can justify higher premiums, which they are trying to do. If they thought they could justify higher premiums by claiming there was an impending asteroid strike, they would. Hardly a good source of information. As for 2000-2010 being the warmest “ever”, again, since when? The Roman and Minoan warm periods were most certainly warmer than now, and the Medieval Warming Period probably was as well. As for natural disasters, sorry, but the data doesn’t support your claim. The Palmer Drought Index shows not much change at all, and the Accumulated Cyclone Energy has been declining for several decades. Don’t confuse isolated high profile events with global averages.
Hardly harmless, I would say.
REPLY: Well, you got most of the science wrong, so let’s talk about harm. Prior to the industrial revolution, the population of the earth could barely surpass 1 billion, and the majority of them lived on the edge of starvation. 40 was a very old person. Since then, our population has risen to six times that, and only a small portion of those are hungry, in fact the only people who are starving are victims of their own governments (like North Korea) rather than suffering from an actual food shortage. Life expectancy is now in the range of 80 years. Average heights of men and women are nearly 12 inches more than they were 100 years ago. We’re bigger, stronger, healthier, longer lived, and there’s six times as many of us. All due to fossil fuels.
So, stopping the use of fossil fuels would hardly be harmless.
No, the fad isn’t over. California’s green scheme is compulsory and punitive. It has a bloated bureaucracy parasitizing over 35 million people. This huge enviro-enterprise will go broke just like most of the others. We can be certain of failure, because their command and control strategy is killing the market that allows California to operate.
Australia’s largest State has had a gutful of Green slushfunding and rising power bills and finally their politicians are getting the message loud and clear-
http://www.dailytelegraph.com.au/news/barry-ofarrell-is-cutting-the-green-schemes/story-e6freuy9-1226531660802
Mike: The Munich Re report was addressed on WUWT here:
http://wattsupwiththat.com/2012/11/23/crowdsourcing-the-wuwt-extreme-weather-reference-page/
That thread resulted in the creation of a “reference page” (see the list of tabs at the top) devoted to “extreme weather” under the sub-tab “climate phenomena”—or just click here:
http://wattsupwiththat.com/reference-pages/climatic-phenomena-pages/extreme-weather-page/
WUWT also has a hard the find and hard to interpret “Category” drop-down list in the sidebar to enable visitors to find threads of interest. There’s an entry for “extreme weather.” Or click here:
http://wattsupwiththat.com/category/extreme-weather-2/
Looking through its most interesting recent entries, I found these:
http://wattsupwiththat.com/2012/10/10/climate-craziness-of-the-week-usa-today-thinks-severe-weather-began-in-1980/
http://wattsupwiththat.com/2011/09/03/weather-amnesia/
http://wattsupwiththat.com/2011/08/17/noaas-weather-ready-nation/
Many of these threads contain links to papers, some peer-reviewed, on the topic—for instance, those of the Pielkes.
The “fad” part is over, but the institutionalized grab for your wallet is just getting started.
Natural Gas (thank you fracking!) plunged and undercut the costs and has lower carbon than coal so coal has been double whacked. Then the Chinese wanted to get in on the money grab too and undercut the manufacturing side…
But generally, while the profit is pretty much gone, the structures remain.
@gnomish:
Well done… PTS has a new meaning 😉
@janef20:
My spouse is now leaving the teaching profession due to just that kind of stupid…
Fortunately, it will take 20 years to have an impact, unfortunately, that’s about when we’re going to be very frozen and entirely broke. It will create a generation of kids that will despise the lies they were forced to parrot…
RENNIX urgently needs to hide the decline!
Mike says:
December 6, 2012 at 5:31 pm
” 5) CO2 has drastically lowered the amount of infrared radiation radiated into space by the earth, causing the earth to rapidly accumulate heat.”
Well, that’s a VERY tall tale. “Drastically lowered” sounds like one should be able to measure it with a satellite, right? NASA is in the business of running satellites, as is the ultra-warmist EU’s ESA.
So WHY is there no observational evidence for your tall tale, Mike?
Michael Tremblay says:
December 6, 2012 at 3:30 pm
“Being skeptical, I notice that this chart is an industrial index chart and that it correlates very nicely with the Dow Jone Industrial Index for the same time period. ”
What is it with your eyes? The chart goes to 2013.
I rode the recovery of the DOW and the DAX all the way from FEB2009 and made a killing. NOT with green energy stocks.
BTW, German solar stocks started to collapse, COLLAPSE I tell you half a year before the subprime crisis in USA caused the BFC in Mid 2008.
The reason they were rushed out was that it was thought that the “learning curve” of mass production would drive down costs AND that fossil fuel prices would rise steeply, enabling a smoth transition about now, or a few years in the future. But production costs are only a small percentage of total costs—and there are hidden costs that weren’t considered, or were minimized. Both costs are now becoming apparent.
I would love to rebut your post in detail, and there is a lot to rebut, but as I only have my iPad on me today I won’t. I will say that I don’t think your condescending tone is particularly pleasant or appropriate in a balanced scientific discussion (which apparently you want to have.)
“Munich Re, one if the largest reinsurance companies in the world, has identified greenhouse emission-driven climate change as the cause of increasing extreme weather and resultant insurance payouts, and as an extreme challenge to both the insurance industry”
You are completely full of sh*t Mike (or should I call you troll?)
Munich Re did do that research, but it showed absolutely ZERO increase in extreme weather events, or their intensity in the last 100 years. What it showed was that costs of a given event were higher these days, because there are more people than 100 years ago, and orders of magnitude more buildings, infrastructure etc.
Munich Re’s research showed that damage from a given weather event is vastly more expensive to repair than 100 years ago, NOT that the events themselves were more extreme or more frequent.
Sorry to rain facts down on your spin…
Mike;
I will say that I don’t think your condescending tone is particularly pleasant or appropriate in a balanced scientific discussion (which apparently you want to have.)
>>>>>>>>>>>>>>>>
To whom do you refer? Perhaps you should consider the snarky tone of your own comments before calling out others. I responded to each of your 6 points in detail. You got the physics wrong, period. For the record, I’m one of those insane people who spends a lot of time on this forum explaining that the greenhouse effect DOES exist (and it most obviously does). If we’re going to have a discussion about the actual effects however, we have to base it upon facts not statements.
I’ve provided you the facts, and the specific laws of physics that you need to be familiar with in order to verify what I’m saying. Don’t worry, I’ll be patient, grab yourself a keyboard and answer me, rebut away if you think you can. Just don’t make a condescending comment of your own along with the excuse that you don’t have a keyboard and then slink away in silence. If you have a rebuttal, let’s see it.
Roger Knights says:
December 6, 2012 at 8:14 pm
There’s a better choice that’s not too hard to find or read. Click on the graphic for “Ric Werme’s Guide to WUWT” (it’s near the top, click on the word “categories,” then the category “extreme weather 2,” and it will take you to http://home.comcast.net/~ewerme/wuwt/cat_extreme_weather_2.html
“Is green energy a fad that has run its course?”
I will believe that when my energy bills here in UK do not include a Renewables commitment.
FD
Very interesting discussion between Mike and Davidmhoffer!
I like very much that 1) Mike has the courage and confidence to discuss these things here and 2) that David responds to him in a calm and reasoned manner. Kudos to you both!
Please lets not treat Mike with contempt or ridicule, everybody. It is counterproductive!
We get enough of that on the warmist blogs and elsewhere.
Thanks, and I hope they continue their discussion!
The sort of “green energy” most people will accept is something they can afford, drop in their backyard, that will then make the “green energy” without them having to do anything else.
They have that now. Plug-in solar panels. Prop them up on the deck or patio, plug in to a dedicated circuit exterior outlet, you’re done. They are set to be very successful in the market.
They don’t replace needing the utility, they’re not “stand alone” AC sources. They’re grid-tie only, if they sense utility power then they’ll try to spin the meter backwards. If the utility current isn’t there (downed lines, blackout) they automatically disconnect, so they don’t back feed to the utility lines, energize a transformer, and possibly electrocute a utility worker somewhere.
There are cheap inverter units out there that’ll do that with your own panels, but they’re not UL listed, so not technically legal in the US. These new units say they are “ICTL certified” which means an International Certified Testing Laboratory looked them over, might be legal. Here’s a manual for one, says to get all the permits, utility permissions, licensed electrician for installation, etc. Take a guess how many people will really do that with their “plug and play” system. Of course if officially installed they qualify for the tax credits, but for such a relatively inexpensive system that could cost more than it’s worth.
http://media.wix.com/ugd/2f9099_5dc76a0057374d687e3380784370c9e8.pdf
Note a frequent major requirement for such is an exterior disconnect that utility people can easily get to. If they’re plugged in at a publicly-accessible area where someone can just walk right up and unplug them, that should qualify as plugs are an electrical disconnect device.
Here’s an informative article reviewing them:
http://www.csmonitor.com/Business/Consumer-Energy-Report/2012/0526/Plug-in-solar-panels-Worth-the-cost
What’s the drawback? They’re pricey! As reviewed, you’re paying $1100 for a 240W panel. That’s expensive.
But why did I say they are set to be successful? Because the current price on Amazon is up to $1225, just six months later. That’s the type of “green energy” the people want, and there are people willing to pay that much for it!
http://www.amazon.com/SpinRay-Energy-SR240-DP1-DeckPower120/dp/B006M3VKTO
Life is simple. The Brits can tell you. You go green, you freeze to death. You can’t sleep from all the racket of those gastly wind things thumping all night. You watch, huddled around a TV in a public tram waiting room to wathc the Royals flitting about all over the globe to go to a charity ball, black tie you know, to declare global warming simply must be stopped. You go to the bank and find the power folks have taken you last farthing for the monthly electro bill. You go to the grocer and find there’s no food due to burning it as “renewable”. You walk past the shuttered power plant that is being used by the Hanson cult to hold seances. Eventually, even in the UK, it starts to wear on a body.
Thousands of years of history have shown that when some thing better comes along it is adopted. If and when a real option for power supply comes along it to will be adopted, surprisingly it will be cheaper, cleaner and require less people to operate it. I have no idea what it will be, but I am fairly sure it will not be a windmill nor a solar panel.
Mike says:
December 6, 2012 at 9:10 pm
“I would love to rebut your post in detail, and there is a lot to rebut, but as I only have my iPad on me today I wont.”
As an aside here…I have an iPad 2 and the screen-based “touch” keyboard is, as Mike alludes, pretty unusable for normal typing. I also like a mouse rather than attempting to press small hyper links on the screen with my fat finger tips. So the iPad will never be more than a music/video-player/browser toy for me…
Here in Spain, the electrity bill gives some indication as to the money that has been squanderd on the green initiative. Approximately 51.5% of my total bill is said to be tax! Only about 48.5% of the bill is the cost of supply (and even in the cost of supply there is tax paid by the chaps that get the enrgy out of the ground, the shippers, the producers, the distributors etc).
Of course, not all of the 51.5% tax, is green tax (some is IVA/VAT – value added tax) but it does show that if there was political will, energy costs could, at a stroke, be almost halved.
It is crazy to have such high energy costs when there are people who cannot afford to heat their homes, and high energy costs are a burden on industry making it uncompetitive. No wonder that industry in Europe is struggling.
Unless Germany does something about its rising energy costs, even German industry will struggle and will no doubt relocate to areas where labour is cheaper, energy costs are cheaper, and land is cheaper. Heck, if they relocate it to China or Indonesia, they will even save the shipping costs incurred in shipping all their luxury cars to the biggest and growing market place.
A heavy price will have been paid for this madness when the final bill is tallied.
Kaboom says:
December 6, 2012 at 8:26 pm
RENNIX urgently needs to hide the decline!
————————————-
I would have thought the Team would have tried to help RENNIX.
I bet Mikey and Phil could show them how.
cn
Slightly off-topic but relevant..
I read in (I think) The SundayTimes (UK) a couple of figures which could explain why there’s so much angst in the UK government’s schizophrenic stance on energy:
North Sea gas – original reserves: 4 Tn cu ft
Shale gas estimated reserves: 161 Tn cu ft (of which at least 20% is recoverable using existing technolgy)
Don’t you just hate it when someone rains on your parade..?
Mike says:
“5) CO2 has drastically lowered the amount of infrared radiation radiated into space by the earth, causing the earth to rapidly accumulate heat.”
Incorrect. Increasing CO2 concentration increases the down-welling IR (GHE) as well as the outgoing IR.
http://www.drroyspencer.com/Lindzen-and-Choi-GRL-2009.pdf
I wouldn’t describe CO2 as harmless either, it’s absolutely essential to life like water and oxygen, we just wouldn’t live long without it.
Michael Tremblay is right to remind us above (Dec 6, 3:30) to compare the index’s performance against the other major indices which also spiked downward during 2008/9. Clearly, some of the stock performance is covariant. The differences are important too, however.
1. The broader markets have been trending back up since their 2009 low and, for a brief period, almost reached their former highs. The RENIXX rebound lasted only a few months and has been trending still further downward ever since.
2. The broader markets lost a lot of money in absolute terms but did not decline as much as a percent of high-value. This is not easily apparent from most financial charts because many of the major providers persist in starting their y-axis display above zero. (Kudos on the chart above, by the way, which properly shows the full axis.)
Thanks. I notice there are 1035 threads in the uncategorized category. Looking at a few of them, it seems to me at least half of them could be assigned to one of the current categories–and that many of the rest could be assigned to a few new categories. Anthony’s too busy to do that. Is there some way you could be given the permission to assign categories to them, and to create new categories? (One that’s needed is Acidification.)
OT: I listened to Sterling D. Allan, CEO of Pure Energy Systems, last night on the Coast to Coast AM radio show. Here’s what C2C’s post-show summary of his interview stated:
I’d appreciate hearing a year-end wrap-up of what’s been happening in the LENR field from you. As long as it isn’t Rossi-focused, I hope/trust Anthony will allow it.