Germany’s $143 Billion Wind Farms Jeopardized by Tight Funding
The credit freeze has not only impaired lending but also technological innovation in the energy sector. We will clearly be moving from a situation of demand destruction (high prices) to supply destruction (low prices). This will cause the supply/demand mismatch that will send the underlying commodities higher in the longer term.
Below is the relative performance of Alternative Energy (PBW) and Energy (XLE). As a world we need this ratio to trend higher over time.
June 3 (Bloomberg) — As much as 100 billion euros ($143 billion) in planned investments in German offshore wind farms are at risk as developers struggle to get funding, jeopardizing the deepest emissions cuts in the European Union.
“The appetite per project has fallen,” said Thomas Rueschen, who arranges funding for wind farms and solar power plants as global head of Asset and Finance Leasing at Deutsche Bank AG in Frankfurt. “Finding creditors for the financing has become a bigger challenge.”
Small wind park planners now have to fund as much as 40 percent of a project on their own, compared with as little as 20 percent before lending conditions tightened, said Hans Buenting, chief financial officer of RWE AG’s alternative energy unit.
Utilities are also betting that building offshore wind farms will pay off as customers switch to more environmentally- friendly sources of energy. One in four who changed providers in 2008 chose electricity from renewable energy sources, according to the Verivox.de Web site which allows consumers to compare tariffs.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aYoYkIa1Di38
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Commodities/Futures, General, Politics, Strategy/Allocation | MacroMan | 
June 3, 2009 9:57 am
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