Cleantech Trends 2018: Wind and EVs in Focus

With 2018 coming to a close, the Investing News Network (INN) takes a look back at the cleantech sector — an industry that was thrown into the spotlight by politicians and one that promises to be a highlight in 2019 and beyond.

In the US, the companies have been trying to find ways to offset the headwinds that were set lose by the Trump administration while in Canada, the industry is recovering from the headwinds of the government in Ontario.

With 2018 coming to a close, INN takes a look back at the trends that impacted the cleantech industry with commentary from the industry experts and companies involved in this sector.

Clean Tech Market Report – 2018

 

Find out how the clean energy market will be affected in 2018

Cleantech trends 2018: Ontario’s impact

In Canada, In late November, the Ontario government unveiled a C$ 500 million climate plan in late November that promised to lower greenhouse emissions in-line with the federal government’s plan but without imposing carbon tax.

Although, it was not detailed on how the emissions will be reduced, the province would be setting up Ontario Carbon Trust which would leverage private investment in clean technologies at a ratio of four private dollar to one public dollar.

The announcement from Ontario in late November follows a dramatic couple of quarters for the sector especially in the province.

Ontario Premier Doug Ford, who assumed office on June 29, made several moves in the space that included scrapping of 750 renewable energy contracts, fighting carbon tax and ending cap and trade system.

Robert Hornung, president of the Canadian Wind Energy Association (CanWEA) told INN that the scraping of contracts has affected the industry’s confidence.

“This was not completely unexpected because the government has indicated that it will be looking for cost savings but the fact that government took that decision to cancel those contracts has had an impact,” he said in a phone interview.

Hornung said that there are projects that are still being built and are going forward and that the province is home to Canada’s largest wind energy fleet.

According to CanWEA, Ontario has 5,076 megawatts (MW) of installed capacity as of August 2018 with 175 MW added in 2018. The firm says that over 2,500 wind turbines generate electricity that contributes 7.5 percent of the total electricity demand.

Clean Tech Market Report – 2018

 

Find out how the clean energy market will be affected in 2018

Cleantech trends 2018: Continued cost decline

However, Hornung said that the key trend in the space is the continued decline of costs that the sector has been witnessing.

Hornung highlighted the procurement process of SaskPower in October and the government of Saskatchewan where the average bidding price of 29 proposals was C$ 3.75 kW/h. Although the price of the winning bid wasn’t revealed, Hornung believes that it would have been at a much lower rate.

“It really set a new standard for wind energy cost, showing that wind energy truly is the most cost competitive form of new generation available in Canada,” he said.

In 2017, Alberta had a procurement process where the average price was C$ 3.7 kW/h amongst the four winners while the winners ranged from C$ 3.1 kW/h to C$ 4.3 kW/h.

“The numbers are the same but what they are measuring is different,” Hornung said. “In December, we are supposed to see the results of two more procurements announced and it will be interesting to see where those prices come in.”

Hornung said that the wind energy sector for over a decade had to deal with criticism that the sector was not cost competitive but with the latest developments, the sector is placed well going ahead.

Cleantech trends 2018: Electric vehicles in focus

Meanwhile, electric vehicles (EVs) are also part of the Ontario government’s climate change plan. The proposal aims to bank on the uptake of EV sales meeting its 2030 target to reduce emissions. Ironically, the Ford government ended the incentives to EV and Hydrogen vehicles as part of their cost cutting measures.

At the time of unveiling the climate change plan, Rod Phillips, Ontario’s environment minister, told reporters that subsidiaries for electric vehicles weren’t “necessary”.

However, in late November, the government of British Columbia announced that the province would mandate the sale of every light duty car and truck to be of zero emission vehicle by 2040. The province outlined a three point plan, which includes an increase in the provincial incentive program and the expansion of the province’s direct charger sites.

Clean Tech Market Report – 2018

 

Find out how the clean energy market will be affected in 2018

Climate and clean energy body, Clean Energy Canada called the B.C. government’s plan as a “win-win: situation in a November statement.

“A third of British Columbians expect their next car to be electric — even more are interested,” Dan Woynillowicz, policy director at Clean Energy Canada, said in the release. “It’s no mystery why. Not only do electric cars help cut pollution and clean up the air we breathe, in B.C. going electric cuts your fuel bill by three-quarters.”

Jerry Kroll, CEO of Electra Meccanica (NASDAQ:SOLO), told INN that the B.C. government’s plan was a “breath of fresh air” but that it is an opportunity for the province and the country to do more.

Kroll called for “bold initiatives” to be introduced on the lines of the ones given to Tesla (NASDAQ:TSLA) in order to boost the Canadian automotive space.

Electra Meccanica, Canada’s only EV manufacturer, noted in October that the company has received over 64,000 vehicle preorders translating to US$ 2.4 billion in potential sales. However, Kroll said that the EV market has a challenge on its own.

“The most challenging aspect of the EV/cleantech market is to ensure that 100 percent of people understand that EV’s are superior in every respect to gasoline-powered cars,” Kroll said in an email statement to INN.

Kroll said that the company’s biggest milestone was SOLO, its upcoming car being certified in the USA and its r listing on the NASDAQ stock exchange.

“Our greatest achievement was that our SOLO became certified for the USA which is a really big deal, and allows us to deliver from our new corporate dealership/showroom in Los Angeles beginning in November,” Kroll said.

Clean Tech Market Report – 2018

 

Find out how the clean energy market will be affected in 2018

Cleantech trends 2018: Renewables rise in the US

In November, Canadian Solar (NASDAQ:CSIQ) announced that it made its first delivery of its bifacial modules in the US. Bifacial modules generate energy from front side as well as the back side leading to higher returns on the investments, and the product was delivered to Neighborhood Power.

In a release, Neighbourhood Power said that the modules will offset the new tariffs on solar modules and steel mounting equipment as implemented by the Trump administration.

In January, the Trump administration imposed 30 percent duties on solar panels, which resulted in several projects being shelved and the industry losing billions of dollars.

Meanwhile, the US Energy Information Administration (EIA) revealed that solar, wind and other non hydropower renewables will generate more than 10 percent of the total electricity in 2018. On a comparative scale, the energy from these sources generated less than 10 percent of the total electricity in 2017. It has to be noted that hydropower is forecasted to generate seven percent of the total electricity in 2018 which is similar to what it generated in 2017 and its forecast for 2019.

While the electricity from renewable energy sources are on a upscale in the US, it still wasn’t enough to reduce the energy related carbon dioxide emissions. The report from EIA said that emissions will increase by 2.5 percent up from 2017 levels owing to cooler temperatures and higher use of natural gas consumption.

Cleantech trends 2018: Investor takeaway

Despite a challenging political landscape in the US and Canada, cleantech companies and the industry as a whole have made an impact on the sector. The wind industry in particular has grabbed headlines in Canada with its ability to show cost competitiveness while the EV market is headed for a huge push in 2019 and beyond.

Stay tuned for our cleantech outlook into 2018 and what’s in store for the industry.

Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

Clean Tech Market Report – 2018

 

Find out how the clean energy market will be affected in 2018

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