For those of you who still have investments in the green stocks since last year, you have my heartfelt condolences.
As if the news from the green economy couldn’t be worse, with all the corruption we”ve seen in carbon trading, and the closure of the Chicago Climate Exchange, and the massive amounts of money that energy feed-in laws and government subsidies have cost the poor consumers.
Now on top of that we have the crash of RENIXX – the first stock index to track the performance of the world’s leading listed companies in the renewable energy sector, “the industrial field of the future”.
H/t: the German online TAZ here in a piece titled: Green Speculation Bubble Blows
RENIXX shares are weighted according to free-float market capitalization. To be listed in the index, companies must generate at least 50 percent of their revenue within the renewable energy industry.
Here’s an excerpt from the RENIXX World press release dated 4 January 2011:
Renewable energy shares: RENIXX World loses almost 30 percent in 2010
Muenster, [Germany] – The international stock index for the renewable energy industry RENIXX World (Renewable Energy Industrial Index) has ended the year 2010 with a drastic fall in value. The market barometer quote was 29.3 percent (at closing: 529.63 points) lower than a year ago(2009: 749.25 points), announced the IWR, a renewable energy institute, in Münster.
Within the framework of the periodic recomposition on January 1, 2011, the market weight of the companies in China listed in the RENIXX continues to climb. With the wafer manufacturers LDK Solar and Renesola and the wind turbine producer Goldwind, 10 Chinese companies have already been listed in the stock index from 2011 on. “The Chinese government pursues a very successful green industrial policy,” said IWR-director Dr. Norbert Allnoch. Other climbers are the renewable energy producer Enel Green Power (Italy) and the US specialist for the encapsulation of PV modules STR Holdings.
Three German producers of solar energy will be removed from the RENIXX World: Centrotherm, Roth & Rau and Q-Cells. In addition, as of 2011 the US wind energy supplier Zoltek and the Australian wind park operator Infigen Energy will no longer be represented in the RENIXX World.”
TAZ here has more, and writes:
The renewable energy economy has experienced the worst recession since the 1930s, explained IWR Director Norbert Allnoch. Many contracts for geothermal plants, offshore windmills and biogas plants have either been postponed or cancelled.”
TAZ also writes:
For the near future, Deutsche Bank in a study sees very little green. Because of increased ‘regulatory worries’, short-term more cautious expectations of companies in the photovoltaic sector and profit warnings issued by wind plant outfitters, the midterm profit expectations for renewables have been in some parts cut in half.”
In summary, it was the reddest year for the green economy thus far. I wonder if we’ll be reading all about it in the print media in the days ahead?
25 responses to “World RENIXX Renewable Energy Stock Index Crashes – “Green Speculation Bubble Blows””
You cannot fool the real money. Those guys made it big while it lasted and pulled out leaving the suckers. Unfortunately it was mostly taxpayers money.
Did the barometer fall in the last days of November?
time to dust down this link again…
Political markets always produce bubbles, and every one of them bursts. The insiders are the politicians and the lobbyists; and everybody else runs the risk of getting surprised by their decisions. Only invest in a political market if you have private contacts with the politicians who run it. There is no transparency in such a market, and no rule that requires transparency.
Warren Buffet has a great saying. “Be afraid when others are bold, and be bold when others are afraid.”
I’d say double down on your green investments, now.
Beware. This year there will be mergers and takeovers in the German solar industry. Some big ole industry blue chips will enter the fray, and some hedge funds, and snap up what they can – but at bargain basement prices.
Warren Buffet loves brands. He bought Harley Davidson in the middle of the financial meltdown, he loves Coca Cola and Kraft. He’s not a guy who buys startups.
Disclosure: I bought GE when they were cheap, and they are partially a green investment. I didn’t buy them for their windmills but because they were cheap, and because they’re GE. So there. And i am making a profit, and it’s not because of their windmills. Look at Vesta for a windmill-only company and weep.
Sorry, that’s Vestas, of course.
I will leave my fingers off them. Margins are under pressure; new projects are stalled.
I’m going to wait until they hit rock bottom, and then scoop them up right before Al Gore announces he’s running for president.
Hopefully you haven’t lost your money on these investments, Rob. It would be ironic if you couldn’t meet your bet obligations because of that. 🙂
Actually, most of my income comes from other means. But my overall outlook is strong on renewables of all sorts. (I’m definitely a long term investor.) There is no way that fossil fuels can sustain the demands of growing human society. I side with Hubbard peak oil theory and believe that demand is just now starting to exceed supply capacity. We’re going to start seeing huge price swings in energy pricing going forward and that drives a huge amount of uncertainty into the marketplace. That will make renewables look fantastic due to the fact that, even with their intermittent nature over the short term, their cost of fuel is zero and that will create inherently stable pricing for those fuel sources.
The market wants stability above everything else.
“Zero fuel cost”… Sure, sounds nice. But current solar cell production costs as much energy as the solar cell will deliver back in 10,000 hours of full production. So you get a positive EROEI, but only after 13 years (assuming German insolation; about 750 hours of full production per year). Maybe 7 years in Spain. Doesn’t include the energy used for producing the elctronics; doesn’t include maintenance or the installation of new cables. Maybe we get the energy invested back in 20 years in Germany when we factor these in; 10 years in Spain. Worthwhile? Not without subsidies ATM.
Stability: Renewable energy sources deliver not at stable prices, but at wildly fluctuating prices, due to their intermittent nature. The bulk price for electricity is lowest when all the windmills spin; when more solar comes online, it will be lowest when the sun is shining. So you produce the most when the price is in the basement. Economical suicide. Only a subsidiced price that destroys energy market pricing makes it viable.
Peak Oil: Shale Gas, later Methane Clathrates. Don’t hold your breath for these to run out.
Oh, now i understand what you want to say with the price swings that will make renewables look good. You’re talking about the kind of speculation that temporarily produces oil price spikes etc. Ok. The oil price spike effects mainly transportation as we need oil mostly for fuel.
We can imagine that we use renewables to produce an alternative fuel for transportation, or have a kind of dual infrastructure that can run on hydrocarbons or electricity, like trucks with gas turbines and batteries or somesuch, so let’s imagine renewable energy could be used as fuel for transportation.
That means that our installed renewable energy capacity puts an upper ceiling on the price of fuel. Kind of like a strategic reserve.
Hmm. Obviously, we didn’t start producing synthetic gasoline from hydropower or nuclear power when oil was at 200 USD a barrel. Nobody even suggested that. Actually, it would have been far easier and cheaper to do a coal-to-liquid process but even that wasn’t done or suggested.
So, the availability of coal already suffices to create such an upper ceiling. I don’t see how renewable energy can add possibilities here that we don’t have already in cheaper form.
I think, given current EROEI numbers, renewable energy can only make sense when one earnestly believes in CO2-induced global warming. That’s really the only possible reason that could drive one towards this approach.
(I fully support research into improving renewable energy; but i don’t see a reason for large scale implementation as long as EROEI is so bad.)
Reply: And the question of CO2 induced warming will be answered in just a few more years. (For me it’s already answered). -PG
If you’re going to compare current state of technologies, yes, you have something. But cost structure of fossil fuel based energy is rising. It’s going to get more expensive to extract energy from fossil fuel sources. It’s not going to get cheaper in any appreciable way.
The converse is true with most renewables. The costs are coming down, and in some cases falling fast. If you are a short term investor, yes, keep your money in oil stocks. If you are a long term investor put your money where the technology is leading.
My whole point on “zero cost” fuel is, moving forward it is going to become very difficult to know from one year to the next what oil prices are going to be. As demand exceeds supply prices will fluctuate significantly. Some years after a price spike when people cut back on oil consumption prices will plummet. But you don’t know when. If you have an energy intensive company that’s bad. Very bad. You will not be able to tell your investors from one year to the next, or even one quarter to the next, what returns are expected to be. You’re going to see long paragraphs in quarterly reports qualifying all the financials contingent upon energy pricing.
Unless we have an energy source that can deliver stable pricing over time. And I don’t mean day-to-day or week-to-week. Over the course of the months and years renewables deliver consistent pricing. The wind is not going to stop blowing for a year, and the sun is not going to stop shining for a year. But oil prices will likely start fluctuating by a factor of 5 or 10 in the coming decades.
If I’m in business I want stability, even if I have to pay a little more for it.
Not an investor in green stocks, but I’ve been waiting for the fall. We might be past peak oil, but the world supply of natural gas is huge, and after that we will likely have methane clathrates which have reserves conservatively evaluated as in excess of every other carbon-based fuel: coal, oil, natural gas…combined. The political concentration on solar and wind, etc., has diverted our attention from cheap fuels. The emphasis on wind, solar and other renewables has been valiant, but they are way too expensive, unreliable, wasteful in their own right and reliant on taxpayer subsidies. The subsidies have been unfair: they benefit the wealthy at the expense of the poor. Carbon-based fuels have had their prices artificially hiked to make renewables more attractive.
Global warming is losing its scare. The world is not heating as predicted. Sea level rise appears normal. The over-riding reason for renewables has lost significant political and scientific support.
James Delinqpole linked NTZ in his latest post
Thanks. It’s good he’s mentioning this development here in Germany.
oh, before I forget 🙂
A nice reading piece at Alex Jones Prisonplanet
@ Rob Honeycutt
7. Januar 2011 at 18:49 | Permalink
“If I’m in business I want stability, even if I have to pay a little more for it”.
You can’t have STABILITY with the current renewables like wind, solar and bio. On the contrary, I make the claim that wind, solar and bio cause INSTABILITY.
We need stable base load power generation to power the grid.
Wind and solar don’t deliver that.
You’re paying good money and absorbing massive tax payer subsidies for an unstable power grid.
In December, the UK wind parks used more power than was generated.
This means the UK was depending on conventional back up power for 100%.
Consistent high pressure area’s over the region = NO WIND
The power used went into heating the gear boxes of the wind mills and the constant adjustments of the rotor heads to turn them into the wind.
Don’t talk about solar unless you want to see the pictures of the snow covered panels we had to see from our window over the past six weeks.
And bio-fuels? Look at the current food prices and ask yourself why our cop foods have become as expensive as they are now.
I am not against inovation and new technologies but only if those technologies can be tested in a free market and they come with advantages compared to the technologies they replace.
The green power hoax only supports a political doctrine turning into a consumer nightmare of energy poverty.
Nothing more nothing less
I’m definitely NOT a fan of bio-fuels. That’s a losing game all around.
I continually see people, like yourself, bashing wind and solar. Subsidies are a non-issue because all forms of energy receive subsidies. In fact, the wind and solar folks would LOVE to see subsidies taken away from oil in order level the playing field. Let’s fully burden the fossil fuel industry with the costs of their energy and see how the game plays out.
When confronted with these arguments I keep saying, “Why are big investors pouring billions into wind and solar?” No, it’s not about taking your tax dollars. If that were the incentive they’d put their money into oil because more of your tax dollars go there, by far.
No, big investors are putting money into this because they see the opportunity down the road. Oil is not going to be our primary energy source in 30 years. It’s just not. If you can be an early investor in the technology and companies that take the place of that energy source you’re in a very good position.
Again, with pricing instability you’re talking about short term and localized issues. Over the longer term and broader areas the story completely flips.
I have to add, I’m not anti nuclear. Nuclear is going to play an important part of future energy. Future energy is going to require lots of forms of new energy. It’s just not going to look like today’s energy mix. Not by far.
Rob, as you said, you and i are using different time scales.
My personal estimate of a non-subsidized break even for solar is 15 years from now. But for my investments, i don’t look beyond 5 years.
Until then, it’s subsidies to keep renewables alive. We could argue about your and my definition for subsidies re “subsidies for fossil fuels”, maybe you mean “external costs (pollution) that are not part of the current market price”, but i don’t want to argue about that now.
In the very long term, we probably agree that renewables will become a natural part of our energy infrastructure.
I don’t know about subsidies in Europe but in the US fossil fuel subsidies are extensive. Here is an interesting article on the topic.
I also think there is enough to take into account regarding subsidies without even starting to look at the external costs of carbon. This writer suggests that oil industry subsidies in the US total $20B per years. That doesn’t even start to consider the cost of foreign wars, etc.
You must read the WHOLE article again.
The $20bn is the TOTAL of all energy subsidies (including subsidies to energy generators).
And the author explicitly states:
“The single biggest energy subsidy, worth some $2.2 billion per year to the oil industry, doesn’t even support domestic production. It is a tax break, first inserted into the Internal Revenue Code in the 1950s, that allows American oil companies to subtract the royalty payments they make to foreign governments from the corporate income taxes they owe at home.”
So it’s not a payment to the industry. it’s money that hasn’t ever passed into the hands of US government; but it’s an equalisation to encourage cheaper local production by negating foreign “penalties” of imports.
That’s why i didn’t want to start an argument about it. The numbers and interpretations are even more dubious than the GISS temperature record.
8. Januar 2011 at 01:21 | Permalink | Reply
I don’t know about subsidies in Europe?
Well Rob, good of you to ask.
Europe is wasting trillions on climate related hubris with one single goal.
To establish a totalitarian regime and you know what, they have achieved the first faze of their goal with the undersigning of the Lisbon Treaty.
Their suicidal energy policies, suicidal Monetary policies and their suicidal migratory policies hence, the unlimited influx of Islamic migrants will not only steel our freedoms, our means of existence, welfare and pensions, it will also destroy our culture.
Europeans are no longer free.
The Union is ruled by an unelected President and unelected Commissars
who write decrees to be executed by the National Governments.
Have a read at this web site to learn what’s really going on:
Also read Agenda 21 of the United Nations
And about the wind mills, I am not against wind mills and solar because they are subsidized. I am against them because THEY DON”T WORK AND PROMOTE ENERGY POVERTY
Also read: Wind is not power at all
And the real green money is here. Carbon emission certificate fraud in Germany, the UK;
“The trail to the men behind the scenes of this company also leads to Great Britain, where a major wave of fraud cases began well over a year ago — and where the climate mafia plundered the British treasury at breathtaking speed. Britain’s Financial Services Authority (FSA) estimates that the loss of tax revenue could soon reach €2-3 billion. ”
(but still small fries compared to the Crazy Conny Blunder in Denmark with 38 billion Kroner damage, about 5 billion Euro; about 3% of Danish GDP, or half the yearly end-consumer price of ALL THE ELECTRICITY THEY PRODUCE)
So 50% of the price you pay for outrageously expensive European GREEN energy goes to pay the criminals.
That’s BEFORE any subsidy is paid to a solar or wind energy producer.