KBC favours wind for renewable investments
"We as investors like strong, steady growth, which is why we currently favor wind more than solar, which is expected to see more volatility in the short term," said Treasa Ni Chonghaile, manager of KBC's Eco Alternative Energy fund.
The solar sector is in the process of wide-ranging consolidation, triggered by cell and module oversupply that has plagued the industry and has forced some players to file for bankruptcy, while other are suffering major losses.
The wind industry, however, has seen most of its consolidation activity already, with a handful of players, such as India's Suzlon Energy Ltd, Germany's Nordex AG and Denmark's Vestas Wind Systems A/S emerging as global players, along with bigger conglomerates, notably Siemens AG and General Electric Co.
Ni Chonghaile's fund, currently about 236 million euros (US$348 million), has gained 16.1 percent to October 29 from January, underperforming the FTSE clean tech index, which gained 21.4 percent in the same period.
About 35 percent of the fund is invested in companies active in the wind sector, compared with about 28 percent for the solar industry.
"The wind sector has a more mature technology, benefits from government support and is more cost-competitive versus solar," Ni Chonghaile said.
In Germany, for example, feed-in tariffs for solar companies are on average much higher than those for wind power, meaning wind energy companies produce at more competitive levels vis-a-vis their solar peers.
Top picks in Ni Chonghaile's portfolio include wind market leader Vestas, Spain's Iberdrola Renovables SA — the world's leading renewable energy generator — and U.S. solar cell maker First Solar Inc.
Ni Chonghaile's fund also holds shares in Novera Energy Ltd, an operator of landfill gas sites, which is trying to fend off a takeover offer by private-equity backed peer Infinis Energy, saying the bid was "wholly inadequate."
"We like the company's assets. This is one of the reasons why we, too, think that Infinis' bid is undervaluing the company," Ni Chonghaile said.
Related News
SDG&E Wants More Money From Customers Who Don’t Buy Much Electricity. A Lot More.
SAN DIEGO - The utility San Diego Gas & Energy has an aggressive proposal pending before the California Public Utilities Commission: It wants to charge most residential customers a minimum bill of $38.40 each month, regardless of how much energy they use. The costs of this policy would hit low-income customers and those who generate their own energy with rooftop solar. We’re urging the Commission to oppose this flawed plan—and we need your help.
SDG&E’s proposal is bad news for sustainable energy. About half of the customers whose bills would go up under this proposal have rooftop solar. The policy would…
