fatlone’s view: tech’s talk about renewable energy (wind and solar)

The content of this blog post is actually the conversation between RC and me discussing about wind and solar energy industry, now I post it here and hope more of you can share your views here.

here we go 🙂

RC says:

i got here when i was researching 658. i lost some money and was thinking of getting back in at ~$10. thank you for your comment regarding direct drive technology in wind turbine now i think 658 does not worth even $5 since its tech is no longer competitive.

You seems to be quite knowledgeable regarding renewable energy. you have pointed out in an earlier post there’s so much uncertainty in solar energy it may not be a good investment theme. my view on solar is also quite dim(pun intended). it will be similar to other high tech investment (LCD panel, RAM etc) , very good for the user, bad for the investors. Why? coz it will not create consistent + cash flow for investors

high competition -> invest heavily on production method/research -> build bigger better plants -> competitors build even bigger newer plant -> supply>demand -> low margin -> invest even more in research -> build bigger better plants…

this vicious cycle will repeat again and again. The only exception I can think of is Intel, which has a dominant lead in market share thus dictates the gross margin.

hope i did not bore you.

fatlone says:

hi RC, its my pleasure to have you leave comment here :)

the loop you pointed out actually is the barrier of entry for the new comers, many people know the bads of hi tech industry, but only few of them understand the goods.

from my point of view, the largest risk of a hi tech firm is how it can maintain its technology leadership. high capex is not a problem under the current economy situation as the capital cost is still quite low. if the market recognized your product or technology, the growth will be very explosive.

because of the cut-throat competition, most of the players will be eliminated when the market is well developed, few strongest players will share most of the market under a low gross profit margin. the situation i much better in the 1st tier player than the other tiers

the earlier the company join the competition, the higher the chance to become successful. because research is the thing that consume money and time, if the company has more money to spend it may require less time to achieve the same level of other competitors did. but it really takes time to make great thing. there is no fast-pass i believe.

let’s back to solar energy market, i think it is still quite young, most of the main players are just listed less than 10 years, there is still a long long way for solar to go.

one of my picks in solar stock is comtec solar (712), i believe it belongs to the first tier player in terms of its technology level and management because it can produce one of the highest conversion rate wafer in China (later when it launches n-type wafer it is getting nearer to the leadership from western, Japanese and korean firms, but their prices are not as attractive than chinese firms), also its GP beats most of the solar firms, the only firms i heard which has higher GP than 712 is GCL-poly which success is based on exceptional management and the capital from the nation.

if you believe direct-drive is the future of wind turbine tech, 2208 should be the “star of tomorrow”, because it bet heavily on that tech, and if the wind energy market performs well again, 2208 is my first choice in HK stock market

please feel free to leave your comment here RC ching :)

RC says:

you said the earlier a company enter the market, the higher chance it become successful. I am not too sure this is how it works in the high tech market. ie. microsoft is a relative late comer, but it beats IBM and Apple in the OS market. Intel is also a late comer, it beats IBM and DEC in the PC market. Because of the excitment of “high tech” which naturally attract lots of new comers and competition and there’s high chance a disruptive breakthrough can appear.
I simply dont have enough knowledge to comment on solar tech. Where can I read more about 712 tech lead?
Direct drive is definitely the future. A electronic converter (low loss, cheaper, lighter) is far superior to mechanical device (gear), there will be no comparison. The real trouble comes from too much competition. Everybody in china wants to be big big big = low margin, high capex + blood on the street.

Why do PRC always say 「火電做規模,水電做實力,風電作秀。」?
“风电竞争日趋激烈,连本有希望取得利润回报的海上风电,如今也已走上低价竞争的末路。对于首轮100万千瓦海上风电超预期的低投标价格,业内人士皆大发感慨–必亏无疑!
国有大型发电企业的低价抢滩有其内在驱动力:国家发改委曾对新能源在电源结构中的占比做出强制规定,该比例的存在意味着,将来想申请更多的火电装机,就必须先提高新能源装机规模,而新能源装机的亏损可以通过火电装机盈利来弥补。”…

is this the reason??
….
“现在强制的新能源电源占比低,撬动的杠杆却很大,新能源装机的亏损可以通过火电装机盈利来弥补,这是大型发电企业敢于亏本抢夺新能源资源的根本原因。
另一方面,目前风电整机企业的销售大不如从前,但由于风电资源抢手,包括金风科技在内的一线风电设备供应商已开始从早期风电场勘探环节入手,切入风电资源,然后进一步投资、建设、运营,最后将建设好的风电场整体转让给大型发电企业。
风电设备供应商们敢于以BOT模式运营,看中的就是大型发电企业新能源装机的压力,毕竟风电的装机成本在可再生能源中依然是最低的,所以大型发电企业趋之若鹜。
”现在大型发电企业就是要装机容量,风电场建起来就行,发不发电以后再说,”业内人士表示,”将来减排的摊派指标会更高,完不成就得交高额碳税,因此风电场资产价格持续上涨。”

twist in demand? is this sustainable? is the same thing happening w/ solar?

http://blog.eastmoney.com/lantianr/blog_140544236.html

fatlone says:

Hi RC, thank you for sharing this news to us, it updates me about the wind energy market.

just simply google “IBM Microsoft”, I found this link in first page of results:
http://inventors.about.com/library/weekly/aa033099.htm

the article said Microsoft co-founder Bill Gates was approached by IBM to develop the OS for its new Personal Computer. Consider the whole history of computer, Microsoft is not as old as IBM, but when considering the Personal Computer Era, it is one of the important pioneers like Apple and Intel

intel is also younger than IBM, but I think their relationship is co-operation rather than competition (i know IBM has its own CPU but for the common PC market, IBM did not promote its CPU but choosing Intel, i dunno the reason though), the first mass

all the late comers above are actually the pioneer of their industry, if we move forward to the internet era, Google is much younger than the mentioned giants but it did create some important tech in search engine and promote cloud computing that none of these giants have achieved before.

I cannot say Intel is the new comer because there is IBM, and Microsoft is another new comer and also the Google. Actually, besides google, all of them are having over 30 years of history. They are still dominate the hi tech industry which is keep developing under fast-paces. I believe google can still maintain its leadership for another decade.

Most of the hi tech industry are originate from Laboratory, just like internet was created a few ten years ago, but the leaders of internet industry were mainly founded in these 10-20 years. Solar technology was also invented in few decades ago, but it is being extensively adopted in commercial or residential in 2000s. Therefore, from my point of view, the companies which joined the market at the beginning of the bloom i will consider it as the first group. (if the company involved in the experimental stage, i will consider it as pioneer)

about the tech lead of 712, i grab a link from the official web:http://www.comtecsolar.com/upload/712KM240311.pdf

this report discuss the development of 712′s n-type wafer, it is a new gen of high conversion rate wafer, only the developed countries possess the tech to produce it like germany and Japan, but the chinese firms plan to launch mass production this year, one of these companies is comtec solar. i believe comtec solar is not the most advance firm globally, but it should be the leader in china (or even in asia when comparing with taiwan and korea) and making good progress to refresh its tech. So, 712 able to provide hi-end wafer with a competitive price.

solar industry is totally different from wind energy in china market. solar energy still not adopt extensively in china as it is too expensive for chinese, therefore when we study the chinese solar firms we should concentrate on the europe market which shares over the half of the global market.

the largest drawback of chinese wind energy firms is they dont have the proven history of stable operation of their wind turbines. even they can produce the turbines in the lowest cost, but the reliability is also very important because the maintenance cost comprises a significant part of total cost of the lifetime operation. This is another case we can learn the advantage of early entry, goldwind has the longest history in wind turbine production compared with other main rivals in china including the largest player Sinovel, so goldwind is my first choice if i want to place my bet on chinese firm. also goldwind is the leader in direct-drive tech, it spent heavily on researching of this tech, one of my favourite bloggers “accountboy” pointed out a big advantage of direct-drive, that is the DD wind turbine can operate under low wind speed, which implies that greater area can be adopted.

another big drawback is the wind turbines cannot connect the grid effectively, thats generates a great loss, people are still looking for solution and one of their hopes is “smart-grid”, smart-grid is a big investment concept, if you have the idea let share your view here!

this is the first time i read about that twisted demand, i hope the chinese govt can amend the policy to stop that situation. it lets me thinking of HK electrical market, HK govt guarantee the profit of the electricity providers at the certain percentage of the capex they spent each year, therefore they invest at a exaggerative amount and built many unused capacity

the future of chinese wind energy firm is the global market, goldwind is the first one to attempt and also the most aggressive one

the more successful cases being operated, the faster growth of the firm, the beginning is the hardest time to face, I hope the chinese players can proof themselves with its cost as well as quality

I am not a pro in hi tech field (nor any other fields :P ), I just try my best to share what i know.

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本篇發表於 風能, fatlone's view, 太陽能, 新能源 並標籤為 , 。將永久鏈結加入書籤。

4 Responses to fatlone’s view: tech’s talk about renewable energy (wind and solar)

  1. 山頂洞人 說道:

    fatlone兄搞資料搜集和研探總不是小手筆!

    在個人的網站內:

    +++++++++++
    「fatlone兄不用客氣,隨便用。我也是轉來的,只是加了一點個人觀感,順帶也對保協和卡姆調整了一點點看法。很期待fatlone兄的意見,儘管暢所欲言,直到目前為止,個人範圍內所留意到的,你是非行內人士中持續對有關產業考察得最深入兼廣泛的觀察者。

    >>>>
    業內人仕既睇法係好有價值, 即使係投行分析師, 都唔會熟得過佢地, 更何況係坊間既財演。

    依家呢個時勢, 買乜股都死。

    唔識做淡既話, 唔買係最好既選擇, 趁依家無乜股買, 可以放多D時間做研究, 唔使諗要貼市炒炒炒。
    <<<<
    完全同意。另外,Danny兄提到的#358,我個人會多加留意,過去自覺不熟有色金屬產業所以一直略過,但剛才看了一些資料後發覺也不錯,只是印象仍然十分模糊,需要花點時間或許才有點讓自己信服的判斷。fatlone兄不妨也留意下,若以你的搜料功夫和對行業視察的執着勁頭,相信可得出很值得參考的見解。

    +++++++++++

  2. Sing 說道:

    呢幾日個市跌,太陽能無原無故又跌,唔通真係好似陸羽仁講要去到終極大跌後,才會反身有望 ?

  3. Sing 說道:

    News of polySi price.
    揮別暴利,大陸多晶矽價格4月底迄今跌逾三成
    http://www.moneydj.com/KMDJ/News/NewsViewer.aspx?a=20ff1fbe-7c64-4ec1-9acb-071652d91ec9

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