Dr. Jason Bradford, the biology brains behind Farmland LP (more on that here), ticked off a few of the key vulnerabilities of the U.S. food system in his presentation on sustainable agriculture:

• Commercial agriculture consumes 10.3 quads (quadrillion BTUs) of primary energy in order to produce 1.4 quads of food energy. The inputs are mainly fossil fuels used in running tractors, producing artificial fertilizers, producing seeds, trucking, refrigeration, processing, freezing and cooking.
• Commercial agriculture not only depletes non-renewable resources and degrades soil, air, and water, but it also releases 5 billion pounds of harmful chemicals and massive amounts of greenhouse gas emissions into the environment per year.
• Animal waste provides critically important fertilizer to small distributed farms, but in the modern massive feedlots of concentrated animal populations it becomes an environmental hazard. All the feed transported to the feedlots uses petroleum fuels, and the hay is grown using ancient "fossil water" pumped from deep, essentially non-renewable aquifers.
• Over the last four decades or so, runoff from commercial agriculture has resulted in massive "dead zones" near our shorelines caused by algae blooms that suck the oxygen out of the water and create anoxic environments where nothing can live. (The dead zone in the Gulf of Mexico has grown to an estimated 8,500 square miles.)
• Just three crops comprise 71% of U.S. crop acres: corn, soybean, and wheat.
• Monsanto, Pioneer, and Syngenta —all basically chemical companies — dominate the seed industry with patented GMO seeds. Those seeds are finely tuned to the temperature, rainfall, and so on of the recent past, making climate change a major threat to the whole food regime (more on that here).
• Likewise, a handful of giant companies now control the vast majority of the food supply system — a stark contrast to the millions of small family farmers who dominated it prior to the 1960s.
• Nearly all of the food delivery system uses just-in-time inventory methods, so there is only one to three days' supply at any point in the distribution chain.

In short, Bradford explained, we have built a complex food supply system with very low diversity and strong connectivity. Yet in nature, those characteristics lead to instability. Stable systems are highly diverse with weak connectivity. The very complexity and interconnectedness of our food web is, in itself, a dangerous vulnerability.

Bradford aptly compared our blithe faith in the food supply system to "the hubris of Wile E. Coyote" just before he realizes he's about to plunge into the canyon.

The Energy-Water Nexus

A presentation by Michael Webber of the University of Texas at Austin emphasized another important interrelationship: We use water for energy, and energy for water.

Nearly all power plants are thermoelectric heat engines — they use heat to produce electricity (the notable exceptions to this are hydro power and solar photovoltaics). Although there are many variations of the process, here's a simple explanation: A source of heat is applied to one side of the engine, which causes the expansion of a gas. The expansion of the gas makes a turbine spin, generating electrical power. The heat is then dumped by the cold side of the engine, which causes the gas to condense again.

Water is typically used to remove the heat on the cold side. Air-cooled plants are also possible, but they are less efficient because they're less cold, and so water-cooled plants are far more common.

It should come as no surprise, then, that the largest user of water in the U.S. is the thermoelectric power sector, accounting for 48% of the total water withdrawal and 39% of freshwater withdrawals.

The first vulnerability of the energy-water relationship is what happens when insufficient (or insufficiently cold) water is available: It forces power plants to scale back, or shut down altogether, which has happened at numerous coal- and nuclear-fired plants around the world over the last few years.

Webber believes that droughts could even close nuclear power plants in the Southeast permanently due to limited water.

On the flip side, Webber noted that roughly 10% of electricity in the U.S. is used for waste and wastewater, including end uses. But in denser, larger states the energy load can be much higher. According to a 2005 study by the California Energy Commission, fully 19% of the state's energy use is related to pumping, treating, transporting, heating, cooling, and recycling water.

The energy-water nexus includes liquid fuels as well as electricity. Net energy researcher David Murphy noted at the conference that the EROWI (energy returned on water invested) is 228 for petroleum diesel, but only 0.024 for corn ethanol, because making it requires massive amounts of water.

Producing liquid fuels from low-grade resources like tar sands and oil shale also requires enormous amounts of water to produce steam and fracture shale. Vince Matthews, the director of the Colorado Geological Survey, expressed his doubts at the conference that his state's shale resources would be developed because of the water dependency. The "head" of the state's water supply is dropping by about 30 feet per year, he said, and has been falling for 20 years. He expects it to hit the aquifer around 2011.

Finally, we must not forget that most of the Middle East is investing heavily in the desalination of seawater to provide adequate fresh water for its burgeoning population (and of course, its indoor ski slopes). Desalination requires over 9,800 kWh per million gallons, according to Webber. I can easily imagine desalination becoming a major factor in the declining oil exports from the Middle East.

On the energy-water nexus, Webber made two important conclusions: first, we need to rethink transportation; and second, water conservation and energy conservation are synonymous.

Peak Credit = Peak Oil

Gail Tverberg, energy analyst and editor of The Oil Drum, discussed the financial side of complexity in her presentation, describing the economy as a highly-networked system of great interdependence: manufacturing depends on international trade; businesses depend on credit, manufactured goods, and electricity; electric utilities depend on credit and on replacements parts, and so on.

There is a systemic risk in highly-networked, interdependent systems she said, like a computer crash: one thing stops working, and everything else stops working. International trade and finance and credit, for example, are closely linked with oil extraction. It's not coincidental that consumer credit peaked in July 2008, just as oil production peaked. . .

Credit enables oil production, and also enables demand for oil, by allowing consumers to buy things made with and from oil. Conversely, shrinking oil supplies limit economic growth, leading to the kind of defaults we saw this past year. When banks cut back on lending, it leads to less supply and less demand.

The net impact of credit on oil is that it provides positive reinforcement for oil extraction when it's growing, and negative reinforcement on the way down. Peak oil equals peak credit, and peak credit equals peak oil.

Therefore, Tverberg concluded, our complex systems' vulnerabilities to peak oil extend far beyond mere fuel supply. Our current model of food production may cease to work. Our current model of transportation may cease to work. Globalization will fail without ample cheap liquid fuels, making re-localization a necessity. And ultimately, without all complex systems we take for granted today, we will likely be forced to accept a much lower standard of living.

Simplify, Simplify

Simon Ratcliffe, an energy advisor for the UK government and an expert on energy and security in Africa and South Africa, offered this graphical depiction of some of the interconnected risks he has studied in those nations:

Source

Just reading a chart like that makes you want to turn away and latch onto a simpler view, doesn't it? Well, keep that in mind and we'll return to it in a moment.

The problem with complex systems of course is that they're. . . well, complex.

No one can model demand accurately, and no one predicted that oil would hit $147 and $33 in a span of six months last year.

No one has a good model for the feedback loop from GDP to oil demand, oil demand to price, price to supply, and supply to GDP — let alone the influence of new Frankenstein financial instruments and monetary policy.

No one has a good model for how much fossil fuel we'll need to build the renewably-powered infrastructure of the future, let alone how we'll procure it in a scenario of shrinking global supply. (In fact, hardly any models even contemplate the reality of depletion.)

No one seems to recognize that although the population growth curve led the energy curve on the way up, energy will lead population on the way down.

Even the historical data is all from an era of constantly growing energy supply, making it a poor guide to the future.

A quick aside: In a presentation to the World Future Society annual conference this year, David Pearce Snyder, an editor of The Futurist magazine, argued that schools are not equipping students with the necessary skills to deal with complexity, and that new curricula are essential to surviving the modern world. I agree completely.

So how can retail investors navigate this increasingly complex and chaotic world?

My guiding lights here include the likes of E. F. Schumacher, Paul Erlich, Paul Hawken, and Thomas Malthus — they were right, if a little (or a lot) early. And of course Henry David Thoreau, who exhorted us to simplify.

They would tell us to focus on simplicity in our investing strategies: Think locally, not globally. Small and distributed is more resilient (and more beautiful) than big and centralized. Using less energy to accomplish the same thing will succeed over trying to produce more energy. Imitating nature's low-energy, low-impact, non-toxic methods in our industrial activities — a study now known as biomimicry — will succeed over inventing wacky new chemicals that nature has never seen before.

From now on, we should let the K.I.S.S. principle be our guide: Keep It Simple, Stupid.

Until next time,

Chris

P.S. As you may know, Green Chip's Nick Hodge has been making a killing by following a simple investment strategy. By focusing only on cleantech stocks, he's been able to close a winner for his readers every single week this year. In fact, he's even taken several double-digit gains from the very sectors I discussed today: water and energy efficiency. And he thinks his next pick — a tiny Chinese lithium-ion battery play — could be one of his biggest yet!  

Editor's Note: This article is Part 4 of a series of Chris's reports from the 2009 ASPO Peak Oil Conference. See also Part 1, Part 2, and Part 3.

According to the report, more renewable energy generation came online in 2008 than in the entire 2003-2007 time period. And forecasts show that new installed capacity in 2009 will almost match the amount that came online in 2008.

And Sanyo announced yesterday that it's planning to increase investment in its battery and solar business. This news comes as the company moves closer to being acquired by Panasonic.

With the completion of this expected takeover, Panasonic could become a major player in hybrid car batteries and solar power.

Meanwhile, now that Sanyo is making more of its own silicon and initiating other strategic moves, the company could be able to cut the cost of its solar panels by as much as 33 percent by the end of next year.

Jeff

Well, now it looks like Senator Charles Schumer (D-N.Y.), wants the Obama administration to reject an expected request for stimulus funding for this particular wind project because it could end up generating Chinese jobs - not U.S. jobs. According to the Senator, if approved, the funds would be used to buy turbines and other components made in a Chinese plant.

Certainly I agree that stimulus money should be provided for projects that create domestic jobs (especially in the manufacturing sector). But it will be interesting to see how this one plays out.

I suspect that part of the whole deal hinged on Chinese manufacturer, A-Power Generation Systems providing the turbines. And I can't imagine the Chinese will set up manufacturing facilities in the U.S. just for this one project.

It's actually quite frustrating when you think about it. After all, we have fantastic wind resources in Texas, yet at this point, the only folks willing to pony up the cash to develop this particular project are in China.

Don't get me wrong. If China wants to invest in these projects (and make huge profits) because we can't seem to get it done - so be it. Because the bottom line is that we need to build out our renewable energy mix and strengthen our electric infrastructure now. Not tomorrow. And if China's willing to step in because we won't - well, that's on us.

And don't kid yourself. China already has a huge stake in all of this anyway. Whether through turbines, solar panels and batteries or the rare earth elements that are necessary to build these things - China's influence on OUR energy economy is real...and it's massive.

Of course, it's no secret that the opportunity for renewable energy development in the U.S. is huge. And if a Chinese company wants to invest in a Texas wind farm or set up shop here in the United States, and use domestic workers to manufacture this stuff - I'm all for it. Certainly that's what companies like Vestas, Gamesa and Siemens have done.

But with unemployment likely to remain at unacceptable levels for years to come, we can't afford to lose out on a single job.

That being said, if we don't get our act together soon and start getting aggressive on providing the necessary funding and manufacturing for our own renewable energy development - rest assured, someone else will. With or without stimulus funds.

Jeff

And it's now becoming a force in renewable energy's worldwide expansion.

Far from the wars in Afghanistan and Iraq, the Department of Defense is setting its own target list to achieve energy independence for the Army's biggest bases.

First, California's Fort Irwin has just begun a multi-year march toward 1,000 MW in solar energy capacity and self-sufficiency from the desert sun.

Fort Irwin Goes Solar

No one would think you were crazy if you thought Fort Irwin — the Army's biggest training camp — was a Middle Eastern outpost. As a matter of fact, the Mojave Desert complex plays host to a sort of mini-Iraq, where hundreds of Iraqi actors are employed by DoD to accurately play out urban fighting scenarios soldiers may encounter during deployment.

Its 1000+ square miles of barren landscape also make Fort Irwin an ideal place to test aircraft, artillery, tanks. . . and even solar power.

In this map from the National Renewable Energy Lab (NREL), you can see that Fort Irwin's location smack-dab between Las Vegas and Los Angeles also puts it right in the middle of the country's highest average daily solar radiation: over 7,500 Watt-hours per square inch.



Those conditions mean you've got to drink a lot of water during training exercises, and you can bet air conditioners are whirring all day long nearly year-round. . .

So the Army commissioned Irwin Energy Security Partners — comprised of Spanish energy and infrastructure company Acciona's solar power division and Virginia-based Clark Energy Group — to reduce the drain Fort Irwin exerts on local generators like Hoover Dam, and to bring a massive power supply improvement inside the base boundaries.

The Army's International "Green Coalition"

You may not expect to see Madrid-traded Acciona (MAD: ANA) on a roster of the U.S. ground force's top energy developers. But Acciona's North American operations, which include water desalination and wind power, give the Spanish company a firm domestic base that the Pentagon sees as favorable to its own efforts. Acciona North America has its headquarters in Henderson, Nevada, just outside Las Vegas.

For the Fort Irwin solar power project, Acciona has teamed up with Clark Energy Group, an energy services company based in Arlington, Virginia, just outside D.C.

Clark is able to navigate the bureaucracy and get Acciona's concentrating solar power (CSP) technology into the military power mix.

A combination of solar thermal power and photovoltaic (PV) technology will contribute 500 MW of capacity by 2022, at a cost of about $2 billion. That should make Fort Irwin energy-independent as far as electricity is concerned.

The Wall Street Journal is reporting that Army officials have hinted at selling some of that output to area grids — especially if the solar plant is expanded to a full gigawatt under the Army's Enhanced Use Leasing (EUL) program. The EUL is the military equivalent to Public-Private Partnership (PPP) arrangements that many emerging countries and cash-strapped cities have used to launch infrastructure improvements.

Under the EUL, which is administered in Baltimore, Irwin Energy Security Partners will lease Army land to install and operate the solar power plant. The consortium will cohabitate with the military with the goal of landing more contracts as the Pentagon shifts to sustainable energy on its bases.

Out in the brightest, driest reaches of the United States, more international clean energy companies with American HQs may find themselves involved in the Defense Department's "Green Coalition."

Israel's Ormat Technologies has its main North American offices in Reno, Nevada, just north of Fort Irwin. Ormat (NYSE: ORA) is already drawing steam from the ground to drive geothermal electricity generation throughout the West, and inclusion in Army energy plans could give another shot in the arm to Ormat shares, which are now holding just above support levels at $36.

Be it Acciona, Ormat, or another company that gains the most from the American military's forays into security through clean power, one thing is certain: the U.S. is now building an international coalition on renewable energy like none we've seen before.

We'll keep you up to date on which international green companies are set to benefit.

Regards,

Sam Hopkins

International Editor

P.S. Nick Hodge and I just issued another successful recommendation to Green Chip International subscribers. That's become the norm for GCI, as our current open positions now average a 45.9% gain. As for the ones we've closed out. . . they did even better — with a 58% payday. And we're working on more winners for you as we speak. Just take a look at this GCI special report today so you don't miss the next one: Profiting from International Clean Energy Expansion.

Climate Change legislation on the Hill has proven to be exactly what we should have expected all along - a partisan bickering match comparable to playground scuffles I recall from my elementary school days.

On cue, the Republicans moved to boycott this week's work session on a climate change bill, stating that they want more time to study the EPA's economic analysis. Interestingly enough, these folks had nothing to say when the Bush Administration used the EPA as a pawn in the game of delaying serious climate change debate. But you know how it is - it's all politics.

Certainly we saw much of this kind of behavior from the Democrats during the Bush years. It's really not much different.

That being said, the request for more time to review the EPA's economic analysis is nothing more than a stall tactic. There has been plenty of time for everyone to review the EPA's findings. They're just not happy with the results because the results further erode the argument that climate change initiatives will put us in the poor house. It's not true, and anyone who wants to be honest about this, knows it's not true.

Of course, I won't lie. This whole cap and trade concept plays out as a very complex system that seeks to achieve a goal which can be achieved without it.

The best way to reduce greenhouse gas emissions is to go full force on renewable energy and transportation alternatives (like electric vehicles and rail), cut all subsidies for the petroleum industry (don't think for a second that what you're paying at the pump is the appropriate price for that gasoline) and figure in ALL environmental costs in any type of power production. Some folks want to roll their eyes at that one. So come talk to me after the last bit of remaining fresh water we have has been polluted by tar sands operations and mercury pollution from coal-fired power plants.

Listen: We can sit here all day and debate energy costs. But when the air's toxic and the water is no longer safe to drink - debate on energy costs will be irrelevant. Just ask the Chinese. Not only are they pouring billions into renewable energy development, but they're also funding new renewable energy operations here in the U.S.

And what are we doing? Oh, we're playing partisan games, telling folks that requiring utilities to cut their carbon emissions will hurt the economy.

No my friends. What hurts the economy is our continued reliance on oil, the never-ending environmental costs involved with our reliance on coal-fired power, and the continued utilization of a crumbling infrastructure.

And let's not back away from the real issue here. Any costs related to any kind of pollution stemming from power production should be considered operational costs anyway. If you make a mess, you clean it up. If it ends up costing the consumer more. . .well guess what - that's the price of power.

We've become dangerously accustomed to insanely cheap power because for far too long these costs have been externalized. But they still exist. They didn't just disappear because some politician handed off the problem to someone else. And maybe it's about time we pay the REAL cost for power production, anyway. After all, this would certainly encourage alternatives. And in the long run, we'll all be better off economically.

Think about it: The costs of producing and burning fossil fuels will only continue to go up. But the costs for renewable energy will continue to fall for decades.

It's about investing in the future, folks. It's about not being OK with complacency and handing off this burden to future generations.

Enough with partisan dust storms. Enough with misinformation campaigns and political prejudices. Enough with denials.

The future is going to be powered by renewables. Conventional fossil fuels are extreme environmental and economic strains. And anyone who's willing to look at this honestly - without the influence of political motives - knows this is true.

So the choice is ours. Continue walking down the path of complacency while the rest of the world embraces progress, or take a stand for future economic and environmental prosperity. But make no mistake, if we miss this opportunity, we're dead in the water in twenty years. A second-rate nation with a great history of accomplishments, but one major, game-changing regret.

Jeff

My response was simple, upset a lot of people, and has since proven to be pretty accurate. . .

"They're going to bury us!"

I don't say this to disregard all the progress we've made here in the United States. Certainly, we've come a long way over the past few years. And there are some excellent renewable energy companies operating domestically.

But the fact is China's desperate need for more domestically-produced power that doesn't further degrade their dwindling water supplies or pollute their air — which will give your eyes and lungs a good burn on a stagnant day — is a major catalyst for renewable energy growth in the Middle Kingdom.

This is why the Chinese government is ponying up billions in support for solar, wind, and electric vehicles. Because without these things, future growth will absolutely be stalled. They know it. . . the big money knows it. . . and if you're a long-time reader of these pages, you know it, too. . .

In the meantime, the Chinese continue to pump out solar modules cheaper than anyone else; their largest wind turbine manufacturer, Sinovel, will likely become one of the world's largest wind turbine manufacturers; and — as we're finding now — if you need billions in financing for a wind farm, China may be more than willing to provide that, too.

Laying the Groundwork for Alternative Energy Development

Last Thursday, China marched into the Lone Star State with $1.5 billion for a 600+ megawatt wind farm.

The project is actually a joint venture with Cielo Wind Power, U.S. Renewable Energy Group, and Shenyang Power Group. When completed, it will provide enough power for about 180,000 homes. Chinese turbine manufacturer A-Power Energy will be supplying the turbines.

Here's what Jinxiang Lu, Shenyang Power Group's CEO had to say about the project: "With a long track record for building some of the world's biggest wind farms, the U.S. is an ideal target for foreign alternative energy investment."

And he's right.

But this is no secret. . .

Sure, it was just last week when Energy Secretary Steven Chu told reporters that the U.S. was falling behind China and others in alternative energy investment.

But we've been reporting on this for years.

And let me tell you, you don't have to be the Energy Secretary to know that foreign corporations have been aggressively laying the groundwork for alternative energy development in the U.S.

Heck, just over the past two years, Spanish wind energy powerhouse Gamesa (MCE: GAM) has built four new wind turbine production facilities in the States. Siemens (NYSE: SI) has a rotor blade manufacturing facility in Iowa and they are currently building a turbine production facility in Kansas. And Denmark-based Vestas (CO: VWS) is now building two new manufacturing facilities in Colorado.

My friends, companies like these don't throw down hundreds of millions of dollars to build out manufacturing in the U.S. without some certainty that there's a big pay day involved. . .

And investors who ignore this fact will continue to miss out on one of the greatest investment opportunities of the 21st century.

Like our latest wind play, for instance. This one could be an easy double in six to eight months.

It's a wind energy developer based in California that could get a huge boost in about eight weeks, after California's new renewable energy mandate goes into effect.

You can read more about this wind company here.

To a new way of life, and a new generation of wealth. . .

Jeff

As it stands, Beijing requires that 70% of the components in wind energy turbines erected around China be produced by factories within the country.

Locke couldn't say exactly when the rule would change, but after the 20th U.S.-China Joint Commission on Commerce and Trade, America's top industrial diplomat did indicate that a policy shift is on the way.

That will be a boon to American wind energy component producers like American Superconductor (NASDAQ:AMSC), whose stock rose by over 10% in the week from October 26, compared to a 3% decline for the S&P 500.

China's loosening of domestic manufacturing requirements for wind power is also part of a bi-national wind power exchange that involves companies of all sizes.

In Texas, a consortium just announced a $1.5 billion Sino-American joint venture between Shenyang Power Group, Cielo Wind Power, and the U.S. Renewable Energy Group, a private equity fund. That collaborative effort will bring turbines from China to the Lone Star State via Chinese turbine maker A-Power Energy (NASDAQ:APWR).

Look for more news soon on the growing exchange in U.S. and Chinese wind power infrastructure expansion and the wind power stocks that could profit.

-Sam Hopkins

It was yet another good week for cleantech, with bullish news coming from both the financial and political realms.

Here's what went down. . .

On Tuesday, the President made the largest single Recovery Act announcement to date, dedicating $3.4 billion to further advancing smart grid development. The money — paid in grants of up to $200 million each — will go to pay for as many as 18 million smart meters across the country.

That announcement sent many smart grid stocks to one-day, double-digit gains. It also foreshadowed great earnings in the same sector. . .

Seemingly on cue, Enersys (NYSE: ENS), Itron (NASDAQ: ITRI), and American Superconductor (NASDAQ: AMSC) all released positive earnings reports this week. The latter climbed over 20% in one day!

(As an aside, I've closed one of those stocks for profit in the Alternative Energy Speculator, and the other two are still open.)

And the good news didn't stop there, as cleantech continued to prove it can combat recession, create jobs, and stoke portfolios. . .

German solar firm SMA Solar Technology announced it is opening a $22 million factory in Colorado. Fisker Automotive announced plans for spending $528 million to overhaul an automotive manufacturing plant it bought from the now-bankrupt GM as part of a stimulus-funded deal.

In fact, the results of cleantech funding have been so fruitful that Obama signed another spending bill into law this week — a bill that will push another $33.5 billion into everything from solar research to energy efficiency and flood control.

Just hours later, Obama's signing was followed by a Reuters report stating that solar executives from Suntech, Sharp, and BP are "bullish on 2010." According to the report, "Executives cited various forces that could drive growth in 2010, including U.S. stimulus funds for green projects, extended tax incentives and new financing."

Of course, we'll be ready to capitalize on that bullishness as it plays out.

In the meantime, you can catch up on the rest of the week's top-read stories from Green Chip and our sister publications below.

Enjoy your weekend,

Nick

What are Global Acres?: Global Acres & Ecological Footprints
Green Chip Contributing Editor Emily Rutan defines global acres for readers and discusses what our total world ecological footprint means for the planet's biocapacity.

Solar Rights: A Solar Bill of Rights
Green Chip's Jeff Siegel reports on the Solar Power International Conference this week, as the Solar Energy Industries Association details a "Solar Bill of Rights."

Smart Grid Investments: A Smart Grid Recap for Investors
Energy & Capital Editor Nick Hodge discusses smart grid investments by compiling his recent works on the subject. 

Super Start-Ups: Get In Now on this $297-billion- a-year Market
Tech giants like Cisco Systems and Google will share billions of gov't stimulus dollars and make tens of billions in profit as the smart grid develops. . . but the real money is in start-up companies. There's still profit to be had in these super start-ups. . . if you act soon.

Solar Energy Stocks: The Truth about Solar
Editor Nick Hodge discusses solar energy stocks, including the rampant misinformation disseminated about the sector. 

Veolia Environnement Stock: French Company's Water and Transit Projects Boost the Big Easy
Editor Sam Hopkins reports from New Orleans on the city's continuing Katrina recovery efforts and the French company being paid to finally get the job done.

23 Energy Companies You Should Know About: Share Prices to Pop from Gov't Slush-fund Boost
Knowing how much funding each company gets — and when — will be worth its weight in gold. We'll share with you this little-known list of companies in line to receive big dollars, and how you can profit from their government funding.

Smart Grid Development: $3.4 Billion for Smart Grid Development
Editor Jeff Siegel discusses the government's plans to award $3.4 billion in grants for smart grid development, and billions more in private investment dollars that will also go to the awarded companies. 

To determine the world's biocapacity, the amount of water, food, fiber, timer, and carbon sequestration provided by the Earth in a single year is measured and converted to a land area in global acres. To determine our ecological footprint, how much water, food, fiber, and timber we consume plus how much carbon we emit is measured and compared to the first number. These results are then converted to a land area in global acres. When the two are compared, our ecological footprint emerges. 

According to the most recent 2009 estimates, our total world ecological footprint is 40% higher than the world's biocapacity. This is not an encouraging statistic. 

Unfortunately, this number means we are consuming resources faster than they are being regenerated, and are now depleting the earth's natural capital. If we continue at this pace, we will eventually destroy the only assets we have without the option of regeneration. Well known examples of this destruction include the disappearing forests, falling water tables, and eroding soils. A key factor in the disappearance of many things is climate change, also affected by our ecological footprint. 

We've all been paying attention to the warnings associated with the depletion of our resources, yet the statistics of consumption, particularly in America, continue to skyrocket. WWF's Living Planet Report puts the United States as the world's worst culprit per-capita after the United Arab Emirates. To put it into a greater perspective, North America's ecological footprint is the largest of any continent in the world, almost doubling the ecological footprint of Europe.  

However, while the United States has been a major contributor to this rising issue, we have also taken many initiatives to develop innovative technology hoping to reverse this trend. Yet the battle has just begun.  

The best way to reduce our ecological footprint is to improve the efficiency with which goods and services are provided, reduce per capita consumption of goods and services, and increase overall biocapacity by conserving and restoring ecosystems before all of our resources are permanently destroyed.

Until next time,

—Emily

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More than 200 years after the Louisiana Purchase, the French are about to run New Orleans again.

The fleur de lis still graces everything from garbage cans to football helmets in this tropical American city, and as I've found in the past few days while looking for companies that are making the most of the Big Easy's post-Katrina renaissance, the famed fleur isn't the only nod to the area's erstwhile European rulers. . .

French multinational conglomerate Veolia Environnement (NYSE:VE) is becoming the company that handles New Orleans' most basic water and transportation needs.

Veolia has been a major player in this sea-level city's water distribution infrastructure since the mid-1990s. Veolia Water North America built the largest water treatment plant in the United States here in 1992. Today, the company continues to operate and maintain filtration facilities near the Mississippi River, whose connection to the Gulf of Mexico gave New Orleans its historical strategic importance, as well as its fresh water supply.

Now Veolia, which trades on the Euronext Paris market as VIE, is taking control of the city's famous streetcars and buses from the New Orleans Regional Transit Authority (NORTA). NORTA has failed in its efforts to get public transportation back on track after Hurricane Katrina in 2005 (and Gustav and Ike in 2008), decimated the primary customer base for intra-city mass transit.

Veolia Takes Over Post-Katrina Transit

Consider this: the population of New Orleans is still about 30% lower than it was before Katrina, yet NORTA ridership dropped by 70% over the same period!

That's too low even for sea-level, and NORTA can't get the numbers up. So they're paying Veolia up to $600 million over the next decade to handle everything from payroll and pensions to network operation; security and timetables for the city system and its connections to surrounding parishes, as counties are called in Louisiana.

Perhaps most importantly, Veolia will take over the system's public relations, using lessons from Veolia Transportation's business in 70 countries to recover some of the 70% of customers NORTA lost.

To be fair, it's not all NORTA's fault. As you probably know, Katrina hit the poorest areas of New Orleans the hardest. The reason that many residents of places like the Lower Ninth Ward couldn't evacuate in time to avoid the storm and rising floodwaters is the same reason that NORTA ridership is down a full 40% more than the city's population. Those folks depended on mass transit to traverse the city and to escape it.

And we all remember the sight of entire bus fleets sitting chassis-deep in murky water, as the Superdome filled with panicked New Orleanians. As indelible as those images are to anyone who saw the disaster unfold on TV, the mental and physical scars of Hurricane Katrina are all the more apparent here.

Over four years after the storm and floods roiled, restaurants place post-Katrina recovery clearances in their front windows as if they were the standard bills of health. I've heard 10-piece bands sing songs about high water and helplessness, and I've seen signs saying, "Katrina broke our city and Capitalism isn't going to fix it."

But Katrina, among other things, demonstrated an epic failure of government at all levels to protect the citizens who bankroll it.

Veolia's job will be to prevent such breakdowns through effective disaster planning and management. If improvement comes through a "capitalist" five-year deal with an option to renew, so be it.

Beyond hurricane preparedness, Veolia is intimately involved in state and city-level efforts to bring federal stimulus money down to the Delta.

New Orleans: "Exhibit A" for Stimulus Funds

In February 2009, Newsweek called New Orleans "Exhibit A" for why a federal stimulus was not only needed to bring the world's richest country out of recession, but also to restore a basic level of service and civil life to one of its most precarious cities.

So far, 16% of Louisiana's federal stimulus money has been allocated to transit and water projects, according to the Louisiana Recovery Authority's website.

Transit and water projects are both right up Veolia's alley.

New Orleans is even seeking to expand Veolia's task by building three new streetcar lines. Estimated at around $150 million, the city wants federal stimulus aid to boost the project. Under the "Exhibit A" banner, New Orleans can legitimately say that by expanding service out to poorer areas, resettlement and reintegration into the local economy will be made possible for thousands of families now scattered all across the country.

Some of the currently un-served areas had older streetcar lines that were torn up, though the wealthier Uptown area kept its St. Charles conduit. So it's not an "If you build it, they will come" scenario, to paraphrase one of my favorite films. Instead, it's more a question of, "If we rebuild it, will they come back?"

People tell me this is the time of year to get work done in the Big Easy because you won't sweat too hard. It's not too muggy, and it's certainly not chilly enough for my temperate-zone bones to raise any objection. Veolia Environnement is bringing its international expertise and the weight of a conglomerate to New Orleans to rebuild old things and build new ones, too.

And as I reported a couple weeks back from California, Veolia is part of an expansive national consensus that infrastructure issues are paramount to economic vitality.

The market is looking wobbly right now, but if you want a piece of what Veolia is doing here and elsewhere, current levels around $32 give you a sound technical support base and an opportunity to start building a position in this water and transportation double-play.

As it happens, the Green Chip team is wrapping up a report on the newest addition to the Green Chip International portfolio. Like Veolia, it's a major force in some of the world's biggest markets for water services. But unlike Veolia, this is a country-specific play on an emerging market that investors are clamoring to get a piece of. This stock is a value investor's dream hidden by hype. You don't want to miss this winner.

Regards,

Sam Hopkins

Editor's Note: My colleague Nick Hodge will soon be attending GreenBeat 2009, the foremost event on the smart grid. Below are some details about the conference.

Call for submissions: Smart Grid innovators wanted! Renovating the power grid requires big ideas from start-ups, major technology companies and manufacturers, and university labs. Innovations will range from technologies that increase the grid's capabilities and efficiency, to new business models taking advantage of these new capabilities. To find out more about GreenBeat's Innovation Competition and to apply, click here.

Deadline to enter the competition is October 30, 2009. VentureBeat will name the top 10 innovations driving the future of the Smart Grid on November 19, 2009, at the GreenBeat 2009 conference. Keynotes include Al Gore and John Doerr.

Save 20% on your regular priced GreenBeat 2009 conference tickets.

Here's what Resch delivered. . .

"We declare these rights not on behalf of our companies, but on behalf of our customers and our country. We seek no more than the freedom to compete on equal terms and no more than the liberty for consumers to choose the energy source they think best."

1. Americans have the right to put solar on their homes or businesses Restrictive covenants, onerous connection rules, and excessive permitting and inspections fees prevent many American homes and businesses from going solar.

3. Americans have the right to Net Meter and be compensated at the very least with full retail electricity rates. When customers generate excess solar power utilities should pay them consumer at least the retail value of that power.

4. The solar industry has the right to a fair competitive environment. The highly profitable fossil fuel industries have received tens of billions of dollars for decades. The solar energy expects a fair playing field, especially since the American public overwhelmingly supports the development and use of solar.

5. The solar industry has the right to equal access to public lands. America has the best solar resources in the world, yet solar companies have zero access to public lands compared to the 45 million acres used by oil and natural gas companies.

6. The solar industry has the right to interconnect and build new transmission lines. When America updates its electric grid, it must connect the vast solar resources in the Southwest to population centers across the nation.

7. Americans have the right to buy solar electricity from their utility.  Consumers have no choice to buy clean, reliable solar energy from their utilities instead of the dirty fossil fuels of the past.

8. Americans have the right, and should expect, the highest ethical treatment from the solar industry. Consumers should expect the solar energy industry to minimize its environmental impact, provide systems that work better than advertised, and communicate incentives clearly and accurately.

This is great stuff!!!

Jeff

Others haven't had it so good:

Indeed, playing cleantech's franchise player has proven to be a tough gig.

On one hand, you have a small group of Chinese companies on the brink of doubling or tripling in just two quarters.

On the other. . . a wild roller-coaster ride has ended as it usually does, back at the starting gate.

But what's stoking such discrepancies in a group of stocks that are so closely related?

A Lack of Solar Education

I'm convinced the reason for such volatility and variance is a lack of solar understanding and education that is worsened by constant misinformation from the media.

For the second group of solar stocks above, a downtrend since June doesn't make much sense at all. Granted, the summer months were sluggish. . . but there was a significant uptick in sales during August and September, with demand exceeding supply for several major producers.

That increase in demand should have acted as a bullish signal for major module producers and cell manufacturers.

Instead, it was the so-called second tier suppliers, like Trina Solar (NYSE: TSL), that saw a major jump.

That surge in demand should continue, buoyed by an already-passed 1 GW Chinese solar subsidy and new tax advantages included in the U.S. stimulus. An additional 1 GW subsidy could be passed by the central Chinese government in coming months.

What's more, that same increase in demand is allowing installers and distributors to mark up prices for panels, which could lead to higher average selling prices (ASPs) for suppliers down the road.

And finally, this increase in demand should bump up fourth quarter shipments just enough to beat expectations, which always leads to higher valuations.

This is probably all new information to you. And that's part of the problem. . .

Because you don't always get the full story by reading mainstream news and press releases. Consider these recent headlines from Wall Street Journal, Bloomberg, and the like:

• "Glut Feeling: Solar Power's Got Too Much of a Good Thing"

• "Solar Panel Glut Will Scorch Small Players"

• "Watch Out: Solar Stocks Might Sink"

• "Supply Glut Will Put the Heat on Solar Stocks"

With stories like these being pushed by stalwart financial news agencies in the face of contrary data. . . is it any wonder that investing in solar stocks has been a crapshoot?

Finding the Solar Truth

Perhaps the most revealing example is this gem of headline, run in some form by Bloomberg and many others: "German Solar Subsidies Face 'Enormous' Cut."

An 'enormous' subsidy cut in the world's largest solar market would be enough to make any investor shy away from the sector. . .

But it wasn't true.

After the story had been picked up by countless news agencies — even the AP ran it — and spooked countless investors. . . Reuters ran a piece entitled, "New German Government Won't Slash Solar Power Rates: Source." And, as they often do with controversial or misreported topics, they ran a factbox to clear everything up.

Now, if you were getting your solar information from me. . .

I would've told you from the beginning that the German solar subsidy would not be cut this year or next. And, even if it is cut in 2011, that would only lead to increased sales in 2009 and 2011 — ahead of any subsidy changes.

With respect to a solar glut. . . I've been saying that it's a possibility, but that any oversupply could be absorbed by global stimulus-funded projects. Increasing volume, even slightly, can be enough to maintain profitable margins.

A recent joint announcement by First Solar (NASDAQ: FSLR) and the Chinese government that they're building a 2 GW solar power plant is clear proof of that.

This is the problem with most financial news: There's no nuance. It's either black or white — bull or bear.

Hell might freeze over if they were bullish with caution or bearish with a silver lining.

Here at Green Chip, we take a different angle. We want to make money as much as you do. And only telling one side of the story doesn't contribute to that end.

Instead of telling you a "Supply Glut Will Put the Heat on Solar Stocks," I've been warning against a potential oversupply, while still highlighting the best investment opportunities and maintaining a bullish outlook.

I'm not saying to dismiss other news agencies and websites. I'm simply suggesting you make sure to get the entire story — every time.

Not doing so could mean missing a great investment opportunity. . . such as the six-month ~200% runs by Canadian Solar and Trina Solar.

But you wouldn't have wanted to invest in them. . . there was a massive solar glut at the time, right?

Call it like you see it,

Nick

P.S. After writing this article, I came across a new article on Barron's about the German solar subsidies. Direct quote: "The agreement does not call for immediate cuts in the so-called feed-in tariff for solar projects." Maybe they're learning.

P.P.S. I've been using this straightforward approach to lead investors to cleantech profits time and time again. . . no matter what the other outlets are claiming. I've closed 45 winners this year, including several solar stocks at a time when there was supposedly a "glut." If you're tired of the spin, and just want profitable investment information, this approach is definitely for you.

In an effort to help consumers save money on electric bills, reduce blackouts and move a wealth of new wind and solar, these grants will go to 100 companies, utilities, manufacturers, cities and various other partners in 49 states.

The winning companies have also secured another $4.7 billion in private investment, bringing the total to $8.1 billion in total smart grid investments.

And in wind news, SeaEnergy announced today that it's looking to build offshore wind farms in Taiwan with energy project developer, Taiwan Generations Corporation.

The two companies will start with an offshore wind farm on the west coast of Taiwan, which will have a capacity of up to 600 megawatts.

Taiwan currently has a renewable energy target of 15 percent by 2025.

Jeff

The wind farm, which will be the second largest in Bulgaria (the largest is a 156 MW farm on the northern Black Sea coast), is going to be built about 42 miles south of Sofia. Operations are expected to begin in 2011.

And in solar news, the ENN Group has signed an agreement with Duke Energy to register a joint venture with the goal of becoming a PV systems provider in the U.S. The JV will focus on utility-scale solar farms and commercial distributed generation projects.

ENN operates China's first silicon thin-film photovoltaic module production line. The company's capacity has reached 70 megawatts, although expansion plans are expected to take capacity to 500 megawatts over the next two years.

Jeff

The debate over emissions is coming clearly into focus ahead of the December COP-15 meeting.

This week at the October meeting of the Business Council (a group of executives from the 120 biggest U.S. businesses), PG&E CEO Peter Darbee was quoted saying:

No one among the group was arguing the science of climate change. That debate, at least in that forum, appears to be over. The discussion was really about, 'climate change is happening, it is a challenge of vast proportions and it will require an effort on the part of mankind to respond to this challenge.'

Support for emissions regulation also resurfaced in Congress this week. . .

Reuters reported, "The White House is encouraged by progress on a climate change bill in the U.S. Senate and is working to advance it even if a December deadline passes."

Just to recap:

The House passed a climate and energy bill in June. And similar legislation is currently being debated in Senate committee. Senator Barbara Boxer is still claiming she'll have it to the floor by December.

But as I've been saying. . . don't hold your breath. There is still much opposition to regulating emissions. . . even if the opposition is political and partisan.

Senator McCain has been very vocal about his reservations. He was quoted this week saying no progress has been made, while claiming that Democrats are beholden to environmentalists.

I didn't know the CEOs of the 120 largest companies in the U.S. were "environmentalists." I think it's more likely they just want clear policy instead of murky debate.

And the climate debate, in my opinion, couldn't get any murkier. . .

Case in point: The Government Accountability Office this week released a report urging the White House to prepare now for climate change. It called for Congress, along with state and local governments, to "develop a national strategic plan that will guide the nation's efforts to adapt to a changing climate."

On the same day, a Pew poll was released showing "57 percent of Americans see 'solid evidence of warming,' compared to 71 percent in April 2008, and 77 percent in August 2007."

This presents an honest question: How can elected officials be expected to pass a measure to combat a problem that a growing proportion of their constituency believes doesn't exist?

I suggest framing the debate purely in terms of energy. That data set is much less susceptible to manipulation by politicians, special interest groups, and lobbyists.

Of course, whether providing solutions for climate change or for energy independence. . . cleantech comes out a winner.

Expect more on recent solar and electric vehicle developments next week, and catch up on all of this week's coverage below.

Enjoy your weekend,

Nick

Novera Wind Energy: Novera Lands Financing for Wind Project
Green Chip's Jeff Siegel reports on a $59.5 million debt facility for Novera Energy to begin construction of the Glenkerie wind farm in Scotland.

Smart Grid Stocks: The Trillion Dollar Transmission Horse
Energy & Capital Editor Nick Hodge discusses smart grid stocks and the coming $1 trillion investment that will send them higher. . .

Global Warming Research: More Americans Believe Climate Change Has Nothing to Do with Them
Contributing Editor Tom Schueneman offers his take on the latest global warming research.

Solar Thermal Energy Companies: Siemens Acquires Solel for Solar Market Strength
Editor Sam Hopkins points out industrial giant Siemens' recent moves to make itself greener, and how you can profit.

23 Energy Companies You Should Know About: Share Prices to Pop from Gov't Slush-fund Boost
Knowing how much funding each company gets — and when — will be worth its weight in gold. We'll share with you this little-known list of companies in line to receive big dollars, and how you can profit from their government funding.

Suntech Solar Reliathon: Suntech Goes Utility-Scale with Reliathon
Editor Jeff Siegel discusses Suntech Power's launch of a new product, Reliathon, in an effort to expand into the U.S. utility-scale solar market.

Where Capital Dollars Go: We've Identified More Than $1 Trillion Being Poured into This Sector
No matter how skeptical people are about the green sector, fact is alternative energy use will double several times over in the next 15-20 years. And we'll share with you our renewable sector stock picks set to skyrocket. . .

Smart Grid Companies: Stocks like EnerNOC Continue to Benefit
Energy and Capital Editor Sam Hopkins highlights the performance of a few select smart grid companies heading into autumn.

Last year gave us new boundaries: $147 a barrel was too expensive, and $33 was too cheap. But those aren't terribly useful numbers in the real world.

We now know that $147 was extra-inflated by too much money sloshing into the sector, and $33 was extra-deflated by the fear and confusion that dominated all markets in December of last year. It's likely that tighter regulation of the oil futures market will tamp down the former, and the latter will not be seen again. . . so long as the world banking system continues to beg, borrow, and steal its way to stability and "full faith and credit."

If you're a Chevron trying to decide if you should plunk down another $5 billion for a big new deepwater platform, or a marginal producer of oil from unconventional sources where the production cost is high, you'll find it hard to commit to new projects with price volatility like that.

One way to get a handle on the question is to look at the supply side costs. As I wrote in March, the current cost of new production in the few places in the world where oil production can still be increased ranges from $60-$75 a barrel, and the average minimum is around $65. The more extreme and marginal projects we'll be eyeing in ten years' time will need closer to $100 a barrel to pay off.

But prices on the demand side of the equation are harder to gauge.

Our First Peak Oil Recession

Several presenters at the Association for the Study of Peak Oil (ASPO) conference two weeks ago used measures of GDP to express the economy's tolerance limit for high oil prices.

David Murphy, a pioneer in net energy (EROI) research at SUNY, noted that major recessions are always associated with petroleum and offered this chart, suggesting that that oil expenditures over 5.5% of GDP lead to major recessions:

Source

Murphy changed the time scale from years to months at the end of the chart to demonstrate how the portion of GDP paying for oil last year spiked and crashed as much in 12 months as it did in 4-5 years during the most recent recessions.

Steven Kopits, Managing Director of Douglas-Westwood LLC, came to similar conclusions in his presentation. He noted how oil stopped responding to price signals in 2004, with production remaining basically flat even as prices tripled. The global oil supply only expanded by 2% while global GDP grew 17%, causing prices to increase by about 25% per year from 2003 on.

By 2008, when crude expenditures reached 4% of GDP, the U.S. fell into recession. In fact, said Kopits, oil over $80 would have been enough on its own to cause what he called "our first peak oil recession."

Former head of exploration and production for Saudi Aramco Sadad al-Husseini opined similarly in his interview with ASPO, saying that the spending ceiling is between 5% and 6% of global GPD. Accordingly, he thinks alternatives to petroleum like Arctic oil, coal- and gas-to-liquids, and so on may not be economical to develop because their costs are too high.

In essence, OECD countries are simply getting squeezed out of the market as the global drivers of demand shift to the developing world. When the cost of filling the tank on an SUV goes from $60 to $100, it really takes a bite out of consumption in America. But your average resident of, say, India or the Philippines can shrug off a 50-cent increase in the cost of filling the tank on his scooter, because he gets so much more economic value from the transportation.

Kopits believes that $70 oil is enough to effectively lock out the EU from the oil market, and $75 locks out the U.S. This begins to explain how, as independent oil producer Jeffrey Brown observed in his presentation, the U.S. was outbid by Kenya for oil last year.

On a related note, ASPO analyst Dave Cohen made a convincing argument that economic fundamentals will not support increased oil demand — even from China — for years to come, ensuring that global GDP growth remains weak.

In counterpoint, Matthew Simmons asserted that we don't yet know the economy's tolerance point, and thought it could be as high as $500-$700 a barrel.

This is where I must make my departure from Simmons' camp. The data presented on GDP and price at the conference have forced me to reconsider my longstanding belief that peak oil will bring much higher prices. Although prices 5 to 10 years from now, when we're well past the peak and into decline, remain an open question. . . I now doubt that we'll see oil over $150 anytime soon.

A Narrow Ledge

If these analyses are correct, then we are on what Kopits called "a narrow ledge": Houston needs $75 oil to keep drilling, but the economy goes into recession with oil at $80.

Two editors of "The Oil Drum" generally concurred. Nate Hagens put the boundaries a bit wider at $60 to keep drilling and $80-$100 as the economic pain tolerance point, and Gail Tverberg observed that oil at $75-$80 seems to kick off a recession.

If the stability of oil production relies on oil spending staying within roughly 4% and 5% of GDP, it's going to be dicey. But if the oil price ledge is only $5 wide, then it's not clear to me whether the global GDP can manage to stay on it.

In short, the world may not be able to continue executing the expensive oil projects of the future at all. The tension between the price of new production and the pain tolerance of the global economy may be resolved not by stable prices, but by a failure to bring new supply online.

This is indeed a crisis — but it's also a hint that it's time to focus on how we're going to replace oil.

Take it from Sadad al-Husseini: "The hidden opportunity may be efficiency and conservation."

The investment community has already heard that message. At the ASPO conference this year, I estimate that not one of the roughly 400 attendees represented development capital, while at a typical Cleantech Forum in San Francisco, at least half of the 1,500 or so attendees are with banks, VCs, and big hedge funds. Granted, the ASPO conferences are about information, not deal-making. . . Still, investors seem to prefer theses based on abundance to those based on scarcity.

It only makes sense. If you had a large chunk of capital to deploy in the energy space, would you rather try to balance on a narrow ledge, or jump into a sector that's growing at 30% per year — with no ceiling in sight — and the wind of oil depletion at its back?

Efficiency and conservation may not be as sexy as solar and wind, but for the next several decades they will be the only real way to survive a future of volatile oil and gas prices and declining supply. It takes a long time to rebuild an infrastructure. . . and in the meantime, we're going to have to make do with what we've got.

In the pursuit of investment capital, cleantech clearly has the edge over oil now.

Until next time,

Chris

P.S. Chris continues this article as Part 2 of a series of reports from the 2009 ASPO Peak Oil Conference. See also Part 1.

P.P.S. It's no surprise that the bulk of new efficiency dollars is going to the smart grid. Indeed, CEOs of both GE and Cisco have each said its development will rival the Internet in size, scope. . . and profit. As economic pressures weigh on the development of new oil. . . there's no limit to how high conservation stocks could climb. In fact, this report has all the details on three that could easily double.

While the issue is largely divided along partisan lines, all political persuasions have "cooled" on the idea that climate change is a serious problem.

The survey results coincide with a government report released today by the Government Accounting Office (GAO) urging the White House to prepare for the consequences of global warming. The report says that federal, state, and local governments should"develop a national strategic plan that will guide the nation's efforts to adapt to a changing climate."

Earlier this year, the U.S. Global Change Research Program issued a report outlining impacts of climate change already underway and those unavoidable due to global warming already "built into the system."

In July military experts and policy wonks testified before Congress about "grave national security threat" posed by climate change.

And yet Americans are becoming increasingly lackadaisical about it? Plunging our collective head into the sand won't make it go away.

When completed, the wind farm will boast 11 wind turbines with a capacity of up to 27 megawatts - or enough to power roughly 15,000 homes. The wind farm is expected to become operational in 2011.

And MEMC Electronic Materials (NYSE:WFR) announced yesterday that it will be acquiring SunEdison for $200 million.

SunEdison develops, finances and operates solar plants all over the world. It's actually the largest solar energy services provider in North America with more than 72 megawatts of photovoltaic solar power plants currently under management. The company also has more than 6 megawatts in Europe.

Under the terms of the agreement, security holders of SunEdison will be paid 70 percent in cash and 30 percent in MEMC stock.

Jeff

According to the company, by using Reliathon, the overall savings for installing a system of at least 10 megawatts could come in at around 10 percent.  When you're talking about million-dollar projects, this is a pretty big deal.

Suntech says it plans to start shipping Reliathon in Q2, 2010.

Also in solar news, Mexican restaurant Chipotle (NYSE:CMG) has announced that it is partnering with Standard Renewable Energy to install solar panels on about 75 of its restaurants over the next year.  Once completed, the project will make Chipotle the largest direct producer of solar energy in the restaurant industry.

Here's what CEO Steve Ells had to say...

"Our effort to change the way people think about and eat fast food began with our commitment to serving food made with ingredients from more sustainable sources, and that same kind of thinking now influences all areas of our business.  Today we're following a similar path in the way we design and build restaurants, looking for more environmentally friendly building materials and systems that make our restaurants more efficient."

Beyond this recent announcement, Chipotle was already the first restaurant to receive LEED Platinum certification - which is the highest level of "green" certification by the U.S. Green Building Council - for its Gurnee, Ill location.  And all of Chipotle's new restaurants do include some environmentally friendly materials, including low VOC paints, recycled drywall and stainless steel, and low-E window glass that helps reduce heating and cooling needs.

Chipotle's been a leader in the pursuit of more sustainable building options as an extension of its philosophy which is called "Food with Integrity."  The idea being that the company seeks ingredients from more sustainable sources.  This has led to Chipotle being the leader in providing more naturally raised meat (from animals raised in a humane way, never given antibiotics or added hormones, and fed a pure vegetarian diet) than any other restaurant company.  The company also serves organic and locally-grown produce, and cheese and sour cream made with milk from cows that are never given the synthetic hormone rBGH.

Jeff

Sam Hopkins

P.S. You've read about the evolution of clean energy and sustainability in Green Chip Stocks for years now. But there's another way to tell the story, and a new film highlights another area where the green shift is taking place. You can watch the whole video, Scraphouse, online right here.