# Renewable Energy Stocks: Is it time?



## Elliot (10 July 2011)

Hi All,

Does anyone else believe that its time to start Investing in Renewable Energy Stocks such as Geothermal, Solar, Wind farms, etc.... Is this the start of a boom for Clean Energy Stocks ?


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## Calliope (10 July 2011)

Elliot said:


> Hi All,
> 
> Does anyone else believe that its time to start Investing in Renewable Energy Stocks such as Geothermal, Solar, Wind farms, etc.... Is this the start of a boom for Clean Energy Stocks ?




Or pink bats???


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## tollbridge (10 July 2011)

My prediction is a slight over-reaction over the next week or so regarding resource, industrial and energy stocks. I'd short them for the hell of it or pair them depending on the charts. Realistically I see & hope a change in government next election and therefore all this b/s will become history. 

For a long-term _investor_ though I'd certainly look at renewable energy stocks - can't really go wrong in my opinion.

Not advice / Just a friendly chat in response to your question.

Tollbridge


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## Smurf1976 (10 July 2011)

There's money to be made but at least until such time as a Liberal government is elected there will be uncertainty as to future policy. And even then, there would only be certainty if the Liberals either (1) leave the carbon tax in place or (2) remove it and Labor then adopts a firm and credible policy of no carbon tax.

For as long as there exists a stark difference in Labor versus Liberal policy, any long term investment in renewable energy is at least partly a bet on the outcome of the next election (and the one after that, and the one after that...). And until we have actually had a Liberal government, we can't be certain as to what they would actually do - words are one thing, action is another.

Note that I'm not necessarily advocating Labor, Liberal or any other party. I'm just observing the situation as I see it - investing in renewables is basically speculating on politics unless those investments are profitable in their own right (ie without a carbon tax or other government incentives).

Of course, you don't need to worry about this too much if you are looking at a short term speculation only. I'm referring more to long term investment.


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## ROE (10 July 2011)

Elliot said:


> Hi All,
> 
> Does anyone else believe that its time to start Investing in Renewable Energy Stocks such as Geothermal, Solar, Wind farms, etc.... Is this the start of a boom for Clean Energy Stocks ?




not until it can make money standing on its on feet and even then it has to generate decent return on asset/capital else I never put a dime to it.

I say there are more money to be made in the old business than this thing for the next 20 years


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## tayser (10 July 2011)

I think it is.

Although, on a forum which revolves around a one-trick-pony equities exchange like Australia's, you're going to get a lot of responses revolving around you should keep the sacred cow status of resources just that: sacred.  

Today was beautiful for basically putting the wind up every single person who is in that camp.  This is what governments are for: to shift paradigms when market failure is recognised (the failure is burning fossil fuels to produce our lifestyles).

I don't think renewable energy will become the new one-trick-pony on the ASX, but it's going diversify it, maybe we might become a 2 trick pony 

I think there's still legs in the "resources boom" - but on top of that, I think there's another lying in wait: that is the ancilliary industries which will make the resources sector more energy and carbon efficient.

Also, telecomms - the NBN and this carbon tax are very much complimentary:

- renewable energy to power the data centres, the NBN network itself (requires huge amount of power) and all the transit carriers and ISP's own networks
- innovation in technology - such as telepresence and end-user telco (and entertainment) equipment - will help in reducing the private transport emissions by allowing more telecommuting.  This area will be exempt from the get-go, but when you look at the Treasuries model of household emissions:







It's the elephant in the room and you can bet your grandmothers false teeth it's going to come into focus - whether they start congestion charging, carbon taxing petrol, invest far more heavily in alternative fuels - or alternative transport (I'd like to see a 70/30 weighting in favour of public transport spend), that's the next part of our lifestyle that's going to be tinkered with and any company which has a brain fart in ways to do it better would be worth investing in IMO.

re: sovereign risk & renewables.  I take the point, however you have to look at it pragmatically.  the next election will be in 2013, after this love-in with the indies and greenies, I doubt much is going to bust up that relationship until then and the Carbon Tax will be in for 6-12 months with tax cuts in place and most importantly we'll start to see investment in areas that will aid the 500 polluters who got bitchslapped with the tax today flowing all over the place.  The Liberals aren't going to razor the shiv out of that - they'll have the people who'll benefit most from the tax cuts (the people who'll be working part time and earn, no doubt, just under $18,199 p/a) offside, as well as all the people/entities that invest in carbon friendly areas...... and the elephant in the room for the tories is Malcolm Turnbull - he's not the crusty tory Howard reincarnated (Abbott) - he actually believes in the mechanism the ALP are going with and the Liberals will have that to deal with if they get in.

I'm not licensed/ DYOR - just calling it as I see it.


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## ROE (10 July 2011)

Less carbon is a good things but it doesn't mean you can make a lot money out of it just because something is new ...business are profitable..???..

Numbers and Market share are meaningless unless you can make decent profit out of them

Look at the car, it revolutionise the way people travel, how many car do we have on this planet?? most car manufacturer doesn't make much money

Look at airlines, it can bring you from here to the other side of the worlds in less than 2 days and airlines business goes bankrupt every few years.

Indian has 600 million mobile users, the market is MASSIVE and you know what most Telco there run at a loss, that is right at a LOSS every year....it makes our Telstra the supreme god of telco 

The new power generators (wind, solar, xxx) I dont think they can make more money than the current lot of power stations ... 

they still have exact same cost and exact same ****ty return on asset.
you think you can build those wind farm or solar farm for free?

they cost a lot of capital to develop and maintain, show me their balance sheet
and I tell you if the business is viable or profitable ...

Internet/airlines/car/TV you name it human came out with beautiful invention 
it happen most of the people in these business make very little money...

Dont fall for the latest and greatest fab

In the stock market, history rarely repeat but it has a similar themes


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## So_Cynical (10 July 2011)

Smurf1976 said:


> I'm just observing the situation as I see it - investing in renewables is basically speculating on politics unless those investments are profitable in their own right (ie without a carbon tax or other government incentives).




Denial of the inevitable again....i suppose that's why there is always money to be make in the market, some see the inevitable and some don't.


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## Tysonboss1 (10 July 2011)

Elliot said:


> Hi All,
> 
> Does anyone else believe that its time to start Investing in Renewable Energy Stocks such as Geothermal, Solar, Wind farms, etc.... Is this the start of a boom for Clean Energy Stocks ?




I don't chase trends, I think just rushing in is a mistake.

If a company establishes itself as a clear leader in the industry while earning decent returns on equity and has a good management that cares about it's share holders and is intent of returning profits back to shareholders and it's selling at a good price then maybe I would look at investing.


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## Sdajii (11 July 2011)

'Start' investing in renewable energy is an odd way to put it; it's not like people haven't been investing in renewable energy for decades, or centuries even. Well, millenia technically.

Anyway, even if the renewable energy industry is going to go wild (which is not guaranteed by any stretch of the imagination, but *even if* we take that for granted, which is silly...), it's still not necessarily a good idea to jump in and throw your money at a wind farm company or tidal energy project.

Like someone else said, the invention of the aeroplane was really cool. We can now fly all over the world really quickly, it's awesome, and it's a thriving business... sort of... airlines go bankrupt all the time.

Think about the invention of the motor car. You might have said "Oh, wow, this thing is totally going to change the transport industry! The horse and cart is totally dead!" well, yes, that might be true, but how many of the car companies which started out in the beginning are still around, and how many have gone bankrupt? (virtually all fizzled out to nothing over time).

Even in old industries, say, food production, perhaps the oldest one of all, good money can be made from a good company and you can lose the lot on a bad one.

Tread carefully, choose a good company, whatever the industry is, and remember you can lose the lot, even in the best, newest, most wonderful industry in the world.

Imagine everyone getting excited about something new, something genuinely awesome, and jumping in with too much enthusiasm... dot com boom...


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## springhill (11 July 2011)

tayser said:


> I think it is.
> 
> Although, on a forum which revolves around a one-trick-pony equities exchange like Australia's, you're going to get a lot of responses revolving around you should keep the sacred cow status of resources just that: sacred.
> 
> ...




A *market* failure? That's a joke. Where has the market failed in terms of fossil fuels? There is still supply, there is still demand. Prices have not risen to astronomical, unaffordable levels. Ergo the market is intact.
The best a champagne socialist can do is call it an *environmental* failure, but we all know it's a big butt-kiss to the greens to hold government. Nothing more, nothing less.
Your issue here is with the burning of fossil fuels and the pollution it causes, not market issues like supply/demand/price.
You are confusing market forces with political forces here, my friend.

If Labor had the numbers, no carbon tax would be entered into.
All we are heading for is a more *expensive* future.


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## tayser (11 July 2011)

springhill said:


> A *market* failure? That's a joke. Where has the market failed in terms of fossil fuels? There is still supply, there is still demand. Prices have not risen to astronomical, unaffordable levels. Ergo the market is intact.
> The best a champagne socialist can do is call it an *environmental* failure, but we all know it's a big butt-kiss to the greens to hold government. Nothing more, nothing less.
> Your issue here is with the burning of fossil fuels and the pollution it causes, not market issues like supply/demand/price.
> You are confusing market forces with political forces here, my friend.
> ...




Actually my view is that burning fossil fuels - which will eventually run out (whether it's a short or very long term, it's a finite resource) - is inefficient.  Isn't the purest energy market's fuel 100% renewable and therefore inifite?  

The market economics of yesterday rarely if ever factored in environment and social supply and demand - it now is.  So adapt or sink with the rest of the tories.


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## springhill (11 July 2011)

tayser said:


> Actually my view is that burning fossil fuels - which will eventually run out (whether it's a short or very long term, it's a finite resource) - is inefficient.  Isn't the purest energy market's fuel 100% renewable and therefore inifite?
> 
> The market economics of yesterday rarely if ever factored in environment and social supply and demand - it now is.  So adapt or sink with the rest of the tories.




You are operating under the greenie mantra that coal is filthy. The government is *forcing* the market to take social and environmental into account, they are *distorting* the market, not letting it run naturally.

*Germany's coal fired power stations can not only meet, but also beat Gillard's targetted carbon emission cuts.*

http://interestingenergyfacts.blogspot.com/2009/04/germany-to-have-coal-power-plants-with.html

Germany's coal fired power plants intend to reduce their CO2 emissions from a total 115mn t in 2008-09, to just 21mn t in 2050 ”” which is an incredible 81 percent cut ”” according to a thoroughly described VDIK study presented to public.

Until carbon capture and storage technology is ready to be gradually introduced starting from 2020, the emphasis will be solely on increasing the effectiveness of current technologies. Germans have calculated that increasingly efficient technology should reduce emissions by 14 percent by 2015. By that time, 70 percent of power is likely to be replaced by new power plants that are now either under construction, or planned. In 2030, 30 percent of total German coal powered plants should be equipped with carbon capture and storage technology; this number should increase in 2040 to 60 percent, and in 2050 it should reach 100 percent.


Terry Cardwell worked 25 years for the Electricity Commission of NSW working, commissioning and operating the various power units. This letter he submitted may be of interest.

http://www.climatesceptics.com.au/documents/on-coal-fired-power-electricity-generation.pdf

It's all well and good to say let's rely on solar, wind, tidal and geothermal. 
The sun doesn't always shine.
The wind doesn't always blow.
The ocean isn't always tidal.
Geothermal isn't proven.

What's the point of 100% renewables if they aren't always 100% there?

What will you rely on for baseload power? Fossil feuls.


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## jbocker (11 July 2011)

A quick scan of several stocks seems to indicate a jump this morning, Is it sustainable who knows.


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## Calliope (11 July 2011)

Would you invest in any scheme which is given the seal of approval by the Greens? Don't forget that the seeding money for these projects will be allocated by the Clean Energy Finance Corporation which is a child of the Greens. Certainly, Christine Milne, who seems to have a crazy streak, thinks she owns it. 

A lot of the money will go on very fuzzy projects.

http://www.theaustralian.com.au/nat...renewable-energy/story-fn99tjf2-1226091910294


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## Tysonboss1 (11 July 2011)

Sdajii said:


> Imagine everyone getting excited about something new, something genuinely awesome, and jumping in with too much enthusiasm... dot com boom...




Thats right, as the master said, 

"Enthusiasm is needed to achieve great things elsewhere, But it the stockmarket it ALWAYS leads to disaster"

Inregards to your statement about the automobile indusrty, Out of the 3000 automotive companies the poped up in the usa 2 remain and one file for bankrupcy and had to be recapped wiping out investors.

Same with dot coms, thousands popped up, a handfull have become amazing businesses.


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## blue0810 (11 July 2011)

Look like TLS is a Renewable Energy Stocks. It is up today !!


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## Starcraftmazter (11 July 2011)

Not as good of a time as last Friday. Hindsight is a real :bonk:


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## white_crane (11 July 2011)

GDY up 25% today and 200% in 2 weeks, CFU 15% and 36%, PAX 26% and 53%.  Is this the renewable energy boom?


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## tayser (13 July 2011)

springhill said:


> It's all well and good to say let's rely on solar, wind, tidal and geothermal.
> The sun doesn't always shine.
> The wind doesn't always blow.
> The ocean isn't always tidal.
> Geothermal isn't proven.




Battery R&D has pretty much stopped dead for the past 20 years - it'll be a key area for investment over the next decade - so much so that a time will come that we'll be able to store all the surplus energy from renewables that is created once the Carbon tax and trading scheme is years down the track.

I'm not a greenie - I'm actually very much a capitalist and I'm interested in science and how it can be commercialised - despite how much you may think to the contrary - Australia has the potential to be more than the world's quarry and yeah it might piss those off who are long on all of that, but eh, that's their problem.

Overnight we've just become a green money investment destination - way before anyone else - our task is now to start creating high-value export industries out of it before the Chinese do.


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## tayser (13 July 2011)

And also - dont forget carbon capture storage is going to form a huge part of the energy mix - Gillard's Treasury graphs even show it - another area which will see a ****load of money flow into it, thus keeping the coal industry relevant.


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## Starcraftmazter (19 July 2011)

Iceland gets 30% of it's energy from geothermal power (and it's only one of the countries which use it); so it is quite proven.


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## alexc2005 (19 July 2011)

Starcraftmazter said:


> Iceland gets 30% of it's energy from geothermal power (and it's only one of the countries which use it); so it is quite proven.




I may be talking crap but i suspect that the more proven method is volcanic geothermal.

Australia is more hot rock geothermal = drilling expensive holes, + hoping they get the flowrate they need + high transmission costs/losses because the good spots are usually in remote areas = pretty hard to justify.

Carbon tax wont do **** to make geothermal more economical. Price of power on the market is $20-30/MW, I did an assignment that showed for anything green to get more economical than coal fired, the price would have to be way over $20.


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## nioka (19 July 2011)

Watch for "Regenerative Drive" technology.This is about to get a lot of publicity. It is storing braking energy and releasing it for accelleration when required. it is possible to cut fuel costs by up to 30% and at the same time decrease engine wear and increase brake lining and tyre life.

An outfit suitable for garbage compactors will soon be under trial closely followed by a bus and a prime mover. Not exactly renewable energy but something that will save energy, reduce polution and dramatically reduce transport costs.

Is it time? Yes its time has arrived.


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## Wysiwyg (19 July 2011)

alexc2005 said:


> Carbon tax wont do **** to make geothermal more economical. Price of power on the market is $20-30/MW, I did an assignment that showed for anything green to get more economical than coal fired, the price would have to be way over $20.



Would the extraction of heat eventually lead to the source rock cooling in any given location? Believe it or not, with people wanting more than they need to survive, we are slowly sucking the life out of the planet.


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## nioka (19 July 2011)

alexc2005 said:


> Australia is more hot rock geothermal = drilling expensive holes, + hoping they get the flowrate they need + high transmission costs/losses because the good spots are usually in remote areas = pretty hard to justify.




Some have projects close to existing transmission lines. Some are close to major projects that use a lot of power. One is almost in the centre of Perth. Another close to Geelong.  Choose one that has the old real estate advantage (Location. Location, Location.) I have three in the bottom drawer.( shares in companies that is not bore holes)


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## alexc2005 (20 July 2011)

The thing that i was trying to get across is this.

Carbon tax is a tax on Carbon, not CO2.

Therefore the introductory rate of $23 per tonne of carbon is actually a $6.20 tax per tonne of C02 (CO2 is 27% carbon by weight).

In an assignment i did for a power generation masters course we came up with the following numbers.

Carbon tax for coal to be no longer worthwhile VS. NGCC(natural gas combined cycle) = $55

From $55 to $61/tonne NGCC is the most viable.

Then nuclear takes the reigns and due to its nill emissions, dominates the rest of the spectrum.

It was found for wind to be viable the carbon tax would need to be $230/tonne

Geothermal wasn't included in the analysis but I think (from memory) that two holes need to be drilled to make it viable, you are looking at around 100mil per hole and even then they could be useless.

Looking at the geodynamics site i think they quote around $50/MWH, keeping in mind that the figure i have for nuclear is $53/mwh, at current carbon tax prices its not advantageous, but time will tell.

Personally i love geothermal, its a great idea and i think its where the future is, but not until there is more security in its application.

We will get there one day though.

I was actually keeping a keen eye on the geodynamics shares up until a couple of months ago when i decided they werent doing anything and i cbf watching them. So i missed the buying opportunity at 12c, and then watched it soar to 46c on the back of the carbon tax announcement. Can't win em all...


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## iRod (20 July 2011)

From today's ClimateSpectator commentary on Petratherm ...

http://www.climatespectator.com.au/commentary/geothermal-getting-warmer



> The next step is to consider the data and decide on the placement of the Paralana 3 production well, to be drilled later this year.  When that is completed, along with circulation tests next year, then a 3.75MW pilot plant could be installed by the end of 2012 – a critical stepping stone before a planned 30MW plant that it hopes could supply energy to the nearby Beverley uranium mine, and potentially the giant Olympic Dam project nearly.




And Mr Brown & Ms Milne want to promote geothermal because......???:

And just how much of the $12b fund will go to this project?? I suspect there will be a clause underlined in red that the govt must directly fund thus project & not from the green energy fund.  

Either way it's more than just a little bit ironic!! ...If the first successful geothermal plant in Oz, will provide electricity to the world's biggest Uranium mine. What's a Greenie to do?


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## Knobby22 (20 July 2011)

iRod said:


> From today's ClimateSpectator commentary on Petratherm ...
> 
> http://www.climatespectator.com.au/commentary/geothermal-getting-warmer
> 
> ...




That's hilarious


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