Wobbles in the sustainability of renewable energy

[rpm]

Wobbles in the sustainability of renewable energy

International solar power developer Abengoa (NASDAQ: ABGB), with three concentrating solar power (CSP) projects in South Africa, started insolvency proceedings on Wednesday 25 November 2015, perhaps signalling an overheating of the global renewable energy sector, and a correction in the trajectory of adoption of renewable energy in the face of reduced prices for fossil fuel-based energy from coal, oil and gas.

 

[Chris.Geerdts]

This article says nothing about the sustainability of renewable energy, which depends on the sun for sustainability, not the dollar.

However it is perhaps a warning that the investment industry has become a little 'overheated', with two many investment dollars chasing this opportunity at once.

I note one of the points in the article - that this is may simply be a problem caused by a (temporary) fall in the price of fossil fuels (which must ultimately escalate). From an SA pov there is the aspect of high forex repayments (relative to incomes) due to the ZAR collapse.

My bet (without all the detail) is it's mainly a case of a company that grew too quickly. This is a common problem with successful companies which are greedy to grab all the opportunities at once, and also need to maintain high market share. As their debt leveraging shoots up, they become vulnerable to changes in any parts of this model.

Some well positioned entrepreneur will grab their assets and make more money from them than the original investor

 

[Rocket-Boy]

Im pretty sure eskom has something to do with this, in terms of getting them connected up and actually paying for the generated capacity.
There have been numerous wind projects over the years where eskom couldnt agree to pricing or supply the links to the grid and they stood dormant for a really long time.

 

[Thor]

http://www.justonelap.com/webinarDetail.asp?intWebinarID=294

[video=youtube;0_Y8aUx745k]https://www.youtube.com/watch?v=0_Y8aUx745k[/video]

 

[richjdavies]

"Big investor forgets to take into account currency risk..." news at 11!

(basically, they put a big plant, and wrote a contract for long-term power that will make them money -- with ZAR at 11/USD... they then borrow USD to build the plant at 1%... a few years later they realise that they are getting paid less in $US per kWh than they thought - it's unchanged in ZAR, but ZARs are worth less now... It really is a Rookie mistake!)