One of the advantages of wind and solar power is that not only is it renewable but the cost of the electricity produced is pretty certain. (Google File Photo)

Investment in renewable energy and low carbon technology has more than doubled in the past two years and is set to grow another 30% to $63.3b this year, according BlackRock Mlim.
Merrill Lynch International Investment New Energy fund (MLIF) co-manager Poppy Allonby believes new energy technologies are becoming mainstream, in the wake of a global move toward alternative energy.
“Environmental pressure and voter concern, security of energy supply worries, rising traditional energy prices and falling alternative energy costs are pushing new technologies towards the top of governments’ agendas,“ Allonby says.
The sector is being driven by four long-term key forces, she adds. Globally, regulatory momentum is supporting the sector as governments put environmental policies into place.
“In the US, California has the solar incentive program and China has the renewable energy law which gives financial incentives and encourages investment,“ she says.
“The Stern report in the UK has addressed the economic impact of climate change, while France has increased the purchase tariff for solar electricity by 50%.“
Allonby says energy supply concerns, operational and technological advances, and the economic performance of the sector are also driving investor interest.
“Most countries do not have enough domestic resources and are forced to import energy resources,“ she says.
“Traditional energy prices for commodities such as oil and gas are high and, in our view, are likely to remain that way, Investmentweek.com said.
“One of the advantages of wind and solar power is that not only is it renewable but the cost of the electricity produced is pretty certain. Alternative energy sources are becoming cost competitive as companies begin to compete without subsidies.“
As the economic outlook for these companies improves, investors can benefit from high-growth performances, she says.
The New Energy fund launched in 2001 and initially struggled with volatility over the 2002 to 2003 period as the technology sector suffered losses.
Although companies are maturing, about 50% of the portfolio is not yet profitable. The nature of the sector means it is most suitable for long-term investors, Allonby notes.
Justin Modray, investment adviser at Bestinvest, agrees with the view that the sector is volatile.
“Alternative energy investing is a potentially lucrative, albeit high risk area,“ he says.
“This is highlighted perfectly by ITM Power, an Aim-listed company that is developing hydrogen fuel cells.
The shares rose by 166.5%, to 335%, on 19 April this year following encouraging news from recent fuel cell tests, but have now fallen back to around 160%.
“The company floated on Aim in June 2004 at 50p a share. The share price then doubled within eight months, moved by more than 25% in both directions over the next six months, before starting a meteoric climb to peak in mid April and fall since then.“
Modray says investors should not lose sight of the fact that alternative energy companies are very dependent on the oil price.
“High oil, hence energy, prices increase the attraction of alternative fuels and this is one of the primary reasons this sector has boomed over the last three years,“ he says.
“Should the oil price fall in future then alternative energy funds will be hit, although the very long-term prospects for alternative energy remain promising. The difficulty is picking the longer-term winners from the losers. Using funds makes sense but even then volatility is expected to be high.
“Alternative energy funds also tend to have a high US exposure, so currency volatility will affect returns too,“ he adds.
Modray notes that the Merrill Lynch New Energy investment trust has turned £100 into £201 over the last three years.
However, in the 12 months to April 2003 the trust shrank £100 into £31. It has also fallen by 20% over the last six months.
However, the trust is currently trading at a 3% premium to net asset value, confirming investor appetite for this sector, Modray says. Investors looking at the sector should look at it over a 10 to 20-year timeframe, he notes.

Researchers in Canada have developed a new solid material that can store and release hydrogen near room temperature without involving a transition metal. The discovery could lead to the development of low-cost and lightweight materials for the onboard storage of hydrogen fuel in cars (Science 314 1124).
Hydrogen is often touted as an environmentally-friendly fuel for road vehicles of the future. When consumed in a fuel-cell powered electric car, it produces nothing more than pure water as a by-product. However, many technological challenges remain before it can be used commercially. In particular, hydrogen has a low energy density compared to conventional fuels and therefore it must be stored as a liquid or an extremely high-pressure gas to ensure that reasonable distances can be traveled before refueling, Physicsweb.org said.
These storage methods are both expensive and cumbersome and some researchers believe that it would be better to store hydrogen within solid materials that can absorb large quantities of the gas. In such materials a chemical reaction splits the hydrogen molecule into two hydrogen atoms at the surface of the material. The atoms then migrate into the bulk of the material and form a metal-hydride compound. The hydrogen can be released by heating the material.
Current materials that can easily absorb and discharge hydrogen near room temperature contain transition metals and the storage process must be catalysed by expensive precious metals such as platinum. This makes them too heavy and too expensive for commercial use.
But now Douglas Stephan and colleagues at the University of Windsor have developed the first non-metallic material that can absorb and store hydrogen at room temperature, releasing the gas when heated above 100C. The material contains pairs of boron and phosphorous atoms, which are separated by a ring of carbon atoms. This structure has a net neutral charge but the boron and phosphorous atoms carry a positive and negative charge respectively. The researchers believe that this property allows the two atoms to work together to split the gaseous hydrogen molecules into two hydrogen atoms, which are then covalently bound within the material. According to Stephan, this mechanism is known as “heterolytic cleavage“ and has only been observed in transition-metal complexes.
Although the metal-free material offers hope of lighter and cheaper storage materials, Stephan admits that there is still a long way to go. Crucially, the material stores less than 0.25% of its weight in hydrogen, which is far off the US Department of Energy’s target of 6% set for 2010 and the 2.5% achieved by some transition metal materials. Stephan describes the DOE target as a “challenging problem“ and the researchers are currently exploring alternative molecular structures.

A German wind turbine manufacturer wants to power large freight ships with wind energy as rising oil price have caused energy firms to become interested in the cutting-edge technology.
The computer-generated image of the freight ship of the future is at first startling: Out of each of the ship deck’s four corners blooms a steel cylinder, looking like chimneys from a long outdated fossil fuel era. But the cylinders rotate and they don’t give off any emissions. On the contrary, they are the key elements of a new wind propulsion system for ships, with which German company Enercon wants to save emissions and fossil fuels based on a physical phenomenon known for the past 150 years.
In 1853, Gustav Magnus, a physicist from Berlin, discovered that when air flows around a rotating object, its one side with the spinning increases the velocity of the air flow, while the other side, spinning in the opposite direction, decreases the air flow. The resulting pressure differential drives the object perpendicular to the direction of the wind--like a curve ball in baseball or a top spin in Tennis, according to Upi.com.
In the 1920s, Anton Flettner, another German scientist, used the principle of the Magnus effect to power a sailboat: With wind blowing from the side, the rotating cylinders, two of which he mounted on his boat Baden-Baden, pushed it forward.
The Baden-Baden--after a speedy cross over the Atlantic--was even praised by Albert Einstein as having great practical importance, but its propulsion system never became a commercial success.
Germany’s largest wind turbine manufacturer Enercon believes the wind ship today has a much greater potential to succeed than in the 1920s.
The petroleum prices shipping companies currently have to pay increased three-fold in the past two years. A wind-powered freighter could save massive amounts of crude oil and drive down costs by “30 to 40 percent,“ Rolf Rohden, an engineer at Enercon, told the Berliner Zeitung newspaper.
“Flettner banked on the system at the wrong time, so even the brilliant technology didn’t help,“ he said.
Enercon has more than 9,000 wind turbines installed all over the world, and is increasingly relying on exporting its large turbines and rotor blades. With the new ship, overseas deliveries could be handled “as environmentally friendly as possible,“ Rohden said.
Enercon has tasked a northern German ship builder with making the first prototype. Nearly 430 feet in length, the aerodynamical rotor freight ship will be able to carry some 10,000 tons of wind turbines. The prototype will make use of the same principle as the Baden-Baden did in the 1920s, but it is now built of modern materials and features a fully automated steering system. The launch of the ship is planned for April 2008. Half a year later, it is expected to make its first delivery.
While Rohden told the Berliner Zeitung newspaper he was optimistic that the ship’s propulsion system will become attractive for commercial ship travel, other experts are not so sure.
“This has been tried many times before, with limited success,“ Christian Oliver Paschereit, an expert at the Institute of Fluid Dynamics and Engineering Acoustics at Berlin’s Technical University told United Press International in a telephone interview.
In strong seas, the large, heavy cylinders could pose a security and a reliability problem, he said.
“Under these conditions, one has to see if the system works without failing over a longer period of time.“
An Enercon spokesman contacted by UPI did not want to comment on the project.

Many of us have gotten used to the idea of corn-based ethanol in our gas tanks. But fuel made from used vegetable oil, chicken fat, even sewage?
Biodiesel production facilities, using a hodgepodge of fuel sources, are sprouting throughout the country as companies hope to cash in on what’s being touted as a socially conscious, homegrown fuel.
Now one is coming to Sanford--Southeast BioDiesel, which plans to start production next summer out of an industrial center at Orlando Sanford International Airport.
The business is the brainchild of Dean Schmelter, who co-owns a separate Sanford business, Water Specialists Technologies, that makes chemicals to treat stormwater and wastewater.
Schmelter said he became interested in alternative fuel sources when gas and diesel prices soared to nearly $3 a gallon after Hurricane Katrina.
“My mechanic said, ’You’re a chemist. Do something about it,’ “ Schmelter recalled.
Southeast BioDiesel plans to churn out about 6 million gallons of fuel annually made from chicken fat, restaurant grease or soybean oil, Allafrica.com said.
The raw product will be put in a tank and heated to 200 degrees using a steam boiler to speed up the chemical reaction. Methanol and sodium hydroxide will be added, and when it’s finished, glycerin will settle to the bottom, leaving biodiesel at the top.
Biodiesel is often blended with traditional fuel in concentrations of 20 percent or less. Higher concentrations can damage rubber in many engines.
The National Biodiesel Board, a trade association, said the industry is growing fast, with 90 plants nationwide already producing the fuel and 60 more under construction.
Those facilities include Silver Bullet Energy, a small plant in Groveland that started earlier this year making biodiesel out of grease extracted from sewage.
That’s an unusual source. More-traditional biodiesel sources are soybean, rapeseed and palm oils.
Proponents tout the fuel’s social benefits, decreased dependence on foreign oil, reduced carbon-dioxide emissions and, in pure economic terms, giving farmers an additional source of income.
“You’re helping the agrarian economy, and you’re helping lessen the dependence on foreign oil,“ said Schmelter’s partner, Jim Thompson. “For the tree huggers, they get to feel warm and fuzzy.“
Biodiesel is getting a boost from a federal tax credit and a growing number of state mandates or incentives to get large vehicles using B20, which is a 20 percent blend. The Florida Department of Agriculture & Consumer Services, for example, is establishing $5 million in grants for alternative-fuel producers to develop demonstration projects.
But finding biodiesel, particularly in Central Florida, can be tough.
The National Biodiesel Board shows just one retailer in the area--Glover Oil Co. in Melbourne, which started providing bulk fuel to fleet clients, including local governments, earlier this year.
Glover Oil plans to start selling directly to individuals as well, company President Chris Marshall said.
The key is in the price of traditional fuel.
On Thursday, the retail cost of biodiesel at Glover Oil was $2.75 a gallon--higher than the $2.62 for regular diesel. Bigger users, such as operators of buses and trucks, will generally go with whatever is cheaper, he said.
But environmentally conscious folks who own diesel-engine cars will fuel up with biodiesel even if it costs a little more, Marshall said.
“On an individual basis, that’s where you’ll see some people willing to pay the 10 or 15 cents a gallon more for it, just because they are so eco-friendly,“ he said.
Distributors and retailers tend to be clustered in the Midwest. The National Biodiesel Board isn’t doing much to promote widespread use. Instead, it is focusing on quality, spokeswoman Amber Thurlo Pearson said.
Some batches with excess glycerin have clogged engine filters. The trade group has started a voluntary accreditation program for manufacturers to teach them how to avoid such problems.
Biodiesel proponents also are encouraging state governments to test samples of the fuel and make sure it meets standards established by the American Society for Testing and Materials.

Zimbabwe is experiencing a power deficit owing largely to reduced generation at the country’s two major power stations at Kariba and Hwange. The country, which also imports about 35 percent of its energy needs, has curtailed power imports from Zambia, the Democratic Republic of Congo, Mozambique and South Africa, which are also facing their own energy deficit problems.
This has seen the national power utility, Zesa Holdings, implementing a load-shedding schedule as a measure to mitigate the deficit between supply and demand.
Zimbabwe would, therefore, either need to build more power stations-- which would take many years--or educate people to learn how to manage energy output.
Zimbabweans believe that while thay are working on building more power stations, we should put in place contingency plans and this is where saving electricity must take centre stage, Allafrica.com said.
It is against this background that we welcome the public campaign jointly launched by the South Korean Community and the Zimbabwe National Chamber of Commerce to encourage Zimbabweans to save electricity.
Through simple behavioral changes and by becoming more conscious of the electricity we use, we can actually reduce demand and therefore save a lot of energy.
People can, in fact, save money on electricity costs through simple technical adjustments in the home and business place.
The South Korean Community and the ZNCC have put forward a number of ideas for both households and businesses to save electricity.
Some of these ideas involve replacing standard light bulbs with the compact fluorescent lamps, switching off and unplugging home appliances, and ensuring that machines run when production is in progress.
Other interventions include a move to encourage the use of gas for cooking and heating, which is much more efficient, and turning off geysers when going away for week ends or extended periods of time. These are simple but important points where each of us could make a contribution towards reducing the use of electricity in our daily environment. The campaign is worthwhile and therefore should be embraced by all--households, businesses and public authorities.
It is also our conviction that this campaign can only succeed if all stakeholders fully back it and start instituting several electricity-saving measures in their buildings.
The benefits and savings to households, businesses and the country as a whole that will be derived from instituting the measures are quite enormous.
It is vital to point out that several other countries in the Southern Africa region such as South Africa, Namibia and Botswana have also been experiencing power deficits and have been putting in place measures to alleviate the situation.