Our series of entries around Renewable Energy Financing Forum sponsored by ACORE in NY continues. The afternoon session was kicked off by US Secretary of Energy, Samuel (Sam) Bodman.

Mr. Bodman will never be accused of being a captivating speaker, but he did have information to share including 3 announcements relating to solar energy:

• A $2.5M grant to 13 cities to improve solar infrastructure
• $30M in grants for photovoltaic process research over the next 3 years
• Up to 10 incubation projects at US universities around PV research with matching private funds totaling up to $27M

Secretary Bodman repeatedly referenced his, and the administration’s belief, that government should be a supporter of renewable energy and private industry should lead and that government should provide a “stable policy framework” in which this support should occur.

The afternoon rounded out with sessions on wind and high profile deals. Following the same format as our earlier post, here are some salient points that stood out from the sessions:

• Wind is the second fastest electricity generation technology behind natural gas
• British Petroleum has entered the wind space in a big way growing from 30MW in late 2005 to over 15GW in development at present
• BP sees a global installed wind base of 125GW within 5 years
• Suzlon, an Indian turbine manufacturer, sees a $186B global wind opportunity
• Venture investment in energy was $2.4B in 2006. Q1 2007, $903M
• M&A activity for renewable energy was $41B in 2006, YTD 2007 it’s $43B
• IPO for renewable energy totaled $7.3B in market cap in 2006 and is $2.2B in 2007, however, $5.1B has been filed for 2007

The networking and reception functions were very productive with over 700 attendees of various types at the conference. There is a good mix of investors, technology providers, support services and developers at this conference. Earlier, we referenced that there was no overlap between this conference and the geothermal funding conference, that was not accurate. Representatives are here from Glitnir Bank (Arni Magnusson) and US Geothermal. Other than that, people wise, there is no overlap. Firm-wise, many of the same support services and a few of the same funding companies are in attendance.

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From Renewable Energy Access:

By a vote of 15-5, the U.S. Senate Finance Committee approved an updated package of energy tax incentives yesterday, which contains a five- year extension of the tax credit for the production of electricity from wind, geothermal, biomass and other renewable energy resources.

Read more…

As a project developer, this would be welcome news indeed if it becomes law. Today at REFF, US Secretary of Energy Sam Bodman, repeatedly stated “Government needs to support private industry in renewables with a stable and secure policy” which included predictable production tax credits.

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Today we’re attending the Renewable Energy Financing Forum sponsored by ACORE in NY. Thus far, there have been two very interesting sessions on Biomass/biofuels and Solar (PV). The panels have been informative, a mix of executives from established companies in the segments and investors (mostly public market.)

In his opening remarks this morning, Michael Eckhart, the President of ACORE, walked through the various renewable resources and he singled out geothermal as being the ONLY renewable capable of displacing coal baseload generation. Curiously, there is not a geothermal session in this conference and we here from the Geothermal Energy Association, Geothermal Resources Council, or even a single geothermal industry attendee from the Geothermal Financing Workshops over the past year. This is a missed opportunity.

A few key points from this morning’s session were:

• 10% of venture capital investments in 2006 were in renewable energy
• 1.6B people do not have access to electricity (perhaps we ought to solve the power divide too…)
• 20% of US corn output is used to make ethanol, that is predicted to rise to 30% by 2010
• 2/3 of the cost of ethanol in the US is due to fuel stock (corn) prices
• Aggregate market capitalization for US solar companies has increased from $1B in 2004 to $67.3B now
• It takes between 2-4 years of electricity production of a solar cell to offset it’s electrical and environmental impact of manufacture
• Refined silicon costs on the spot market have increased from $50/kg two years ago to over $250/kg now. Long term contracts can be had for $70/kg. The cost of Si is forecast to decrease to $40/kg over the next 2 years.

Those are facts we found interesting, we’ll share more on the afternoon’s sessions in future entries.

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The Renewable Energy Finance Forum is running in New York this week. We will be attending and will post some blog entries from the conference. A glance at the agenda shows a regular financing forum, but with some heavy hitters doing the talking. Notable for its absence is geothermal…stay tuned, we’ll keep you up to date on interesting bits from the conference.

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The renewable energy segment is hot, in fact, many parallels are being drawn between the current hype of renewable energy and the Internet bubble of that popped in 2000.

Wilder Hill Clean Energy Index Performance over the last 6 months (ECO)

For investors who want to get in on the action but don’t have the confidence to pick individual issues, funds like the Wilder Hill Clean Energy Index (ECO) provide an interesting way to participate. While there is alot of hype and no doubt there are valuation to value mismatches, this remains a good segment to invest in. We would caution you to use the same approach and research when entering a renewable energy investment as any other.

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