Wednesday, July 08, 2009

You hear that sound?

It's the sound of another bubble popping. NO - seriously.

This post is a little dry, but it gives you a great look into how the clean energy push is going to blow up in the worlds face. These are the same people who are forcing car companies to make green cars and cramming through legislation to force us to use green energy. When the sector right at this moment is dying. It's in serious, serious trouble.

Let me ask you. If you thought you'd make a bunch of money selling a product - wouldn't you jump for joy if you got an 18% discount on buying the machine that made the product? Me too!

Apparently, companies who put up wind farms don't think so. Bloomberg reports that Wind Turbine orders fell 50% the first half of this year. On top of that - turbine prices have fallen 18%. It makes you wonder, how are those companies going to stay in business?

The easy answer is - they aren't. I'm not sure at this point there is any way to salvage this sector.

See, I always thought the "small guys" would be put out of business, and all the work would be funneled to "the big guys". Not so fast eco warrior!

There are a few really large players in the wind turbine field. One of them is Suzelon. It's the 5th largest turbine maker by sales. It seems their turbines weren't built so well, and they had a mishap where a blade fell off of one of their turbines. Which tanked the stock. Here. They had to replace or reinforce almost every blade they shipped. That cuts into profit.

This caused Suzelon to want to take over component companies so that crap didn't happen again. But, this made investors worried Suzlon might not have enough money and would need to sell assets to get it. Even green energy companies aren't able to get loans. And, why would investors be worried really? They only had to slash 50% of it's US workforce due to slack demand.

Apparently they couldn't raise the money, because all of a sudden a company called Vestas is trying to take over a stake in Hansen Transmission which is 61% owned by Suzelon. Except that Vestas doesn't seem to have any money either.

Vestas is the #1 manufacturer or turbines. They just announced they were closing a plant in Britain and the workers are pissed. But who cares really. They must have been giant assholes because the company wanted to move to the US to escape them. They must have crazy labor costs, because the US labor isn't cheap. They bitched and moaned that last year Vestas made record profit. Which they might have.

As usually is the case with these people, they don't understand that last year isn't this year. By the time a company starts letting you know they are in trouble, they've been in trouble a while. And BTW - turbine orders have dropped 50% this year. Do the math geniuses! Or read the news about Vestas market oversupply here.

But, hey - if the prices for these things have been falling, why aren't governments snapping them up at reduced prices? Why? If they were serious about "green energy" this should be a win for everyone. Right?

Apparently not, because prices for the turbines are expected to fall another 20% Which is not good.

Say it with me folks. Not good!

The #1 and #5 manufacturer have laid off 9% and 50+% of workers respectively. What is another 20% price drop in turbines going to do to them? Hmmmm? I haven't looked at the companies in between #1 and #5, but I'd bet money they are not doing any better.

I bet T. Boone Pickens is wishing he would have unloaded those turbines he has sitting around. It looks to me like he was trying to bail before things got really bad.

I always wanted the price of this stuff to come down so I could afford it. So everyone could afford it if they wanted to use it. Yet with a 50% order decrease and an estimated 48% price decrease - it looks like all the governments of the world are not going to be able to hide the fact that this technology was bullshit all along.

As a side note - I find it really dishonest that this Pew article came out a few days ago.


"The report finds that the emerging clean energy economy is creating well-paying jobs in every state for people of all skill levels and educational backgrounds. Included in Pew’s definition are jobs as diverse as engineers, plumbers, administrative assistants, construction workers, machine setters, marketing consultants, teachers and many others, with annual incomes ranging from $21,000 to $111,000."


They didn't use any data from this year, where it's obvious to anyone who looks that green jobs are being shed at an alarming rate. Not being created.

3 comments:

  1. it looks like all the governments of the world are not going to be able to hide the fact that this technology was bullshit all along.

    Well, here's one point where Keyser has to disagree. You think Waxman and Markey have any conception of what the "real world" is like - or care?

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  2. No - I don't think they care. Technically However, things are going to get very uncomfortable for them soon.

    In Feb. the administration extended unemployment benefits by 20 weeks. That starts running out the middle of this month. Things get much worse the closer you get to December. Starting next month.

    Many states have not funded their unemployment funds very well.

    So... theres that. They've had to borrow from the government. The other government.

    I read the numbers could get as high as 3 mil by December. So while daddy money bags is on an ego tour of the world, I'm betting he will come back to some very unhappy people.

    Not to mention, solar prices are set to come down 40%. So why aren't people buying on a 40% discount after all? That's half off? And full of sarcasm.

    If there was any time green energy was going to work, surely it would be during a half off sale? Right?

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  3. BTW - why is he giving 3 billion to farmers in other countries when the mayor of San Fransisco is mandating that any spare lot or devil strip be made into a garden and worked by volunteers?

    Here

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