Baltic Dry Index. 1042 +27
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“Those who don't know history are destined to repeat it.”
Edmund Burke.
As we slide towards the end of summer and the Fed’s
annual junket in Jackson Hole Wyoming, today, just another update on a “new”
industry whose era is rapidly arriving in the 21st century.
Photo-voltaic solar cells have come a long way in 60 years. From being a very
expensive low efficiency way of generating electricity for the satellite space
programs, to the threshold of an efficient unsubsidised way of generating
usable and storable electricity for homes.
Originally only about 2 percent efficient at great
cost, today’s PV solar cells come in at about 14-17 percent efficiency in
converting “sunlight” to electricity. At that efficiency, and with the
efficiencies of large scale manufacturing, photo-voltaic electricity gets
competitive with other forms of generating electricity, but without the
subsidies coal and dangerous nuclear power require. But we are on the cusp of
the next generation of PV solar panels arriving, with efficiencies in the 30
and 40 percents. At that sort of conversion efficiency, most roofs facing east,
west and south, become potential income generating assets.
A revolution is coming to electric power generation
next decade, with nuclear and coal powered generation the likely biggest
losers. Promising an end to the pollution of coal and the dangers of nuclear
power, Schumpeter’s Gale of “creative destruction” is about to hit the electric
power generation industry. An industry all too often loaded with debt and 20th
century obsolescent dinosaurs.
Creative
destruction describes the "process of industrial mutation that incessantly
revolutionizes the economic structure from within, incessantly destroying the
old one, incessantly creating a new one."
Solar Boom Driving First Global Panel Shortage Since 2006
Aug 19, 2014 12:01 AM GMT
The solar industry is facing a looming shortage of photovoltaic panels,
reversing a two-year slump triggered by a global glut. The oversupply pushed prices through the floor, making solar power more competitive and driving up demand. It also dragged dozens of manufacturers into bankruptcy, and slowed capital investment at the survivors. With installations expected to swell as much as 29 percent this year, executives are bracing for the first shortfall since 2006.
Scarcity will benefit the biggest manufacturers, including China’s Yingli Green Energy Holdings Co. (YGE) and Trina Solar Ltd. (TSL) A shortage may slow development outside the top markets in Asia and North America if suppliers favor their largest customers. Shipments to large, utility-scale solar farms may get priority over smaller, rooftop systems, threatening one of the industry’s fastest-growing markets.
“The cell and module glut has certainly dried up,” said Stefan de Haan, a solar analyst at IHS Inc. “There is no massive overcapacity anymore.”
The looming shortage shows the rapid expansion of solar energy. The industry may install as much as 52 gigawatts this year and 61 gigawatts in 2015. That’s up from 40 gigawatts in 2013, and more than seven times what developers demanded five years ago, according to Bloomberg New Energy Finance.
The
industry has about 70 gigawatts of production capacity, New Energy Finance
estimates, including a significant amount of older equipment that’s not
profitable. The supply-demand balance is tighter than those numbers suggest. De
Haan estimates capacity at about 59 gigawatts, excluding manufacturing lines
that are out of date or obsolete.
----Some manufacturers are already expanding. In May, Canadian Solar Inc. (CSIQ) began construction on a new cell factory in China, a joint venture with GCL-Poly Energy Holdings Ltd. that will initially have 300 megawatts of annual capacity.
The solar industry is cyclical and near a turning point, said Canadian Solar Chief Executive Officer Shawn Qu. He’s expanding now because he anticipates a shortage.
“Every industry goes through cycles,” Qu said. “It’s inevitable to see a cycle in solar.”
Other manufacturers already see a shortfall.
“It would be fair to say our panels are in short supply,” said Tom Werner, CEO of SunPower Corp. (SPWR) The San Jose, California-based company’s factories are running at full, and it announced in July plans for a new factory that may begin production in 2017 and will be able to make at least 700 megawatts a year. That’s more than double the plant it’s bringing online next year
----That potential threat to the rapidly growing U.S. residential solar market prompted SolarCity Corp. (SCTY) to buy a panelmaker in June. The rooftop developer expects demand to surge, especially for systems atop homes and commercial buildings.
SolarCity Deal
“At some point, it will be a 400-gigawatt-a-year market; it’s just mathematical,” said CEO Lyndon Rive. Smaller companies without supply contracts may be unable to get enough panels.Billionaire Elon Musk, SolarCity’s chairman, said the acquisition will guarantee supply. “If we don’t do this, we thought there was risk of not being able to have the solar panels we need,” he said during a conference call announcing the deal.
----Companies that make manufacturing equipment such as Germany’s Manz AG expect the looming shortage to spur orders.
“According to our estimation, the gap between supply and demand will be closed at the end of 2014,” said Axel Bartmann, a spokesman for Manz. “This will definitely lead to rising investments in advanced equipment.”
Panel Pricing
Unlike other industries, a shortage probably won’t boost prices, said Arno Harris, CEO of Recurrent Energy, a San Francisco-based developer owned by Sharp Corp.As production costs slide, manufacturers can increase profit without raising prices. That’s important because solar power is extremely price-sensitive, Harris said.
More
In other news, will this provoke Russia to
intervene? As with MH17, each side blames the other.
Ukraine: 'dozens dead' in strike on fleeing refugees
Dozens of civilians reportedly burned alive in missile attack on a convoy fleeing war-torn eastern Ukraine, top Ukrainian official says
Ukraine accused pro-Russian
rebels of killing dozens of fleeing refugees in a missile strike in the east of
the country on Monday, a claim that was strongly denied by the separatists.
Ukraine's National Security and
Defence Council (SNBO) called the attack a “bloody crime” and said that dozens
of civilians "including women and children” had died.
Grad missile launchers and
mortars “passed to the bandits by the Russian Federation” were used to fire on
a convoy of refugees trying to leave the war zone, said Andriy Lysenko, an SNBO
spokesman.
"The rebels were expecting
the convoy and destroyed it entirely. We haven't been able to count the number
of victims ... dozens (were killed)," Mr Lysenko said in a briefing to
journalists.
Details of the alleged attack
were thin, and the SNBO said it was clarifying the number of casualties.
Anatoly Proshin, a Ukrainian
military spokesman, said the convoy had been hit by “a powerful artillery
strike” between the villages of Khryashchuvatye and Novosvitlivka, near the
city of Luhansk, a rebel stronghold.
“People were burned alive in the
vehicles – they didn’t have time to get out,” he told the Ukrainian news
channel 112.ua.
However, in a separate interview
with the Ukrainskaya Pravda website, Mr Proshin said that although the convoy
had been waving white flags, the refugees were being transported by the army in
military vehicles.
The Telegraph could not reach a
Ukrainian military spokesman for comment.
EU to spend €125m to prop up fruit and vegetable prices against Russian sanctions
Kremlin's ban on EU food imports has led to oversupply of produce, prompting intervention to protect farmers
The European Union will use
emergency funds to prop up the price of fruit and vegetables in order to
compensate farmers for Russia’s ban on many Western food imports.
The European Commission announced €125m (£100m) worth of
emergency support on
Monday for farmers who had overproduced fruit and vegetables over the summer.
The funds, designed to compensate
for collapsing exports to Russia, will be used to buy up fruit and vegetables
at full price from farmers, or to compensate them for not harvesting their
produce, in order to prevent a glut of supplies that could drive down prices.
The subsidies, taken from the EU
Common Agricultural Policy’s €420m of emergency reserves, are being used to
prevent “price pressures” for farmers, agriculture commissioner Dacian Ciolos
said.
The announcement came as it was
revealed that eurozone exports to Russia – one of the single currency area’s
key markets – fell by
14pc in the first five months of the year.
---- “Taking into account the market situation following the Russian restrictions on imports of EU agricultural products, with effect from today, I am triggering CAP emergency measures which will reduce overall supply of a number of fruit and vegetable products on the European market as and when price pressures become too great in the coming months,” Mr Ciolos said.
“Acting early will provide an
efficient support to the price paid to producers on the internal market, help
the market adjust and be cost effective.”
Figures released by the EU
statistics agency Eurostat showed that exports to Russia from January to May
had fallen by €5bn to €32.1bn.
“The world is a place that’s gone from being flat to round to crooked.”
Mad Magazine.
At the Comex silver depositories Monday final figures were: Registered 59.93 Moz,
Eligible 116.56 Moz, Total 176.49 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No crooks today, in the run up
to the coming long weekend and end of summer, your editor is taking a research
break.
The monthly Coppock Indicators finished July.
DJIA: +157 Down. NASDAQ: +318 Down. SP500: +232 Down. The Fed’s final bubble has taken on a
very scary wobble, but this is nothing compared to the return of real interest
rates at some point ahead.
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