Articles by ecothrust at Technorati Headline Animator

Sunday, July 22, 2012

Why renewable energy gets a poor share of climate funds

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There is something bogus about the way the world goes about paying its lip service to climate change. There is very little time, space and resources demarcated for clean energy. Energy is basically a technology subject. Whether it is energy from oil, gas or coal  or from solar panels or wind turbines, it remains very much a technology regime that is highly complex and  rapidly modernising . An area where specialists with decades of realtime  experience in the field are needed to make any significant and worthwhile contribution. Unfortunately in most  global policy forums there are few technolgists present ,the arena being usually dominated by Bankers, financers, economists and even social activists,none of whom understand the subject of energy or how to bring about a smooth and rapid transition from conventional to clean energy

Due to the fact that climate change discussions are in the hands of non-technical persons posing as experts, it has become a farce with all types of solutions today that have no relevance to renewable energy occupying the same spotlight as solar or wind energy. Biofuels and clean coal technolgy are few examples of such
pretenders stealing the limelight and scarce finance from the real renewables. Biofuels are not renewable energy because it consumes scarce land resources and water, fertilizer and power for every crop cycle and a capital intensive process to convert into fuel.Yet the energy industry is trying to pass it on as a renewable energy source and extract subsidies from pliant politicians. Same is the case with clean coal technology, a failed concept that is still tecieving investment and subsidies from several OECD majors thanks to the clout of the fossil fuel producers in the energy industry .

As a result of such anamolies the real clean energy options like solar and wind energy get only 30% of the global subsidies allocated supposedly for sustainable development of energy. While the fossil fuel industry gets subsidies of over  $400 billion annually the actual subsidy allocation for renewable energy is just over $20 billion,though nearly $60 billion of subsidies are spent on sustainable energy development that includes several non-productive or unrelated areas that should have been normally excluded from the subsidy lists.
This is the prime reason why renewable energy gets a poor share of climate funds and has been unable to reduce costs and expand volumes significantly.   

Wednesday, July 11, 2012

Time to Curb Volatile Markets

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The Year 2012 and 2013 may see the volatile global commodity markets in full play with food grains joining the 3 primary objects of investor attraction. Oil, Gold and the US dollar are the three pivot points of global speculation today. There are many more minor interests like Copper which is hot this year, or new metals like Palladium or agricultural produce like sugar or corporate stocks, the Treasury bonds of different nations. US Treasury bonds which used to be an all time favorite before 2008 has once again regained its following after a mild setback after the sub prime mortgage crisis. Gold has now replaced the long time favorite the US Treasury bond, with big traditional buyers like China and Saudi Arabia, shifting preferences. No wonder it gained in over 50% in value in the last 3 years being quoted over Rs 30,000 or 1/2 K for 10 gms. 


The History Of Speculative Markets/ 

After the year 2000 it was the commodity markets, not the currency or the stock markets that witnessed the maximum volatility.  One could say that since this is a futures market based on the anticipation of traders, of future prices, it is bound to be both volatile and speculative as sources of commodities are finite and demand is growing. The truth however is that the futures market that were originally devised to reduce risk for the producers, the users and the physical traders of stock,  has increased risk due to its unpredictable volatility and speculative tendencies, as it is totally deregulated.

Speculation in Oil at the futures market has hurt both physical retailers and big users like Airlines as per documented evidence.  Dan Gilligan, the President of the  Petroleum Marketing Association in the US, the largest body of retailers with over 8000 members confirmed last year, that despite surplus supply positions and waning demand worldwide  oil prices shot through the roof during September 2008. The Air Transport Association of America has also condemned the destructive volatility of markets at a CFTC hearing last July. The shipping industry too has been hurt as lease rates of oil tankers have been hammered to give a boost to contango trades 

So why does no one address the issue. The possible reason is that there are powerful forces like the big banks and hedge funds who profit from the volatility and spread the booty around to the regulators, the politicians, the media and the judiciary creating an impenetrable barrier which initially stalls any action on reform and finally subverts it. Since most US bills passed are negotiated they lack the teeth to be decisive and lets the offender get away easily with a minor rap on the knuckles or a token fine, if booked.

 Besides with the major violation occurring at ICE Commodity Exchange in London which is outside American jurisdiction, the market makers are relatively certain that they will be able to ward of any intrusive questioning by American Senators with the help of the lax British regulators at FSA and British laws that are not restrictive towards volatility based on speculation. The energy traders who shifted base from the US to the UK in the year 2000 to set up the ICE exchange at London after American regulators clamped down on Enron had done their homework well.    

When the US Congress deregulated energy markets in 2000 and permitted operation in privatised exchanges at the behest of Enron, it created a perennial problem for both the producers and the users of energy. It issued a licence for the trader middleman to take over, from the secretive electronic privatised commodity exchanges without leaving an provision for audit supervision. The California energy crisis showed subsequently to an extent how deregulated markets could be counter-productive, but after Enron was booked under various offences and went bankrupt, the basic issues that had enabled Enron to manipulate its books were left unaddressed, despite attempts by Senator Levin and a few others, to plug the loop holes.

The majority of energy traders at Enron, who had smelt the scent of blood, then moved to London to avoid US regulatory measures. Here Jeffrey C Sprecher of Continental Power Exchange set up the deregulated privatised fully automatic, high speed ICE Exchange for electronic trading of commodities that Enron had dreamt of but could not build. It was here that Big Banks and Big Oil set up the trading cartel that spiked oil in 2008 to take it up to $147 a barrel before crashing it to below $50 creating an unprecedented volatility band of $115 and raking in mammoth profits for the cartel. This market volatility, many believe added to the losses of other big funds like Lehman Brothers, AIG  an during the 2008 market crash, and ultimately led to major bankruptcies in the Wall Street.

However even $500 billion of investor funds is too small an amount to create the massive volatility that has been witnessed in the commodity markets. What has caused this volatility is high speed round trip trading (banned in the US after the Enron saga) of the investor funds   at the ICE commodity exchange at London that churned out a mind blowing turnover of $7 Trillion in the last quarter. Each barrel of oil was cross swapped 20 to 30 times by the traders at the ICE Exchange operating from behind the counters of the Big Banks and Hedge operators, before it hit the retail markets at substantially higher prices.      


Morgan Stanley the Wall Street Bank and one of the biggest in the oil trading business operates through a mindboggling 450,000 subsidiary companies, to effectively control its market share in the oil business. Its trading operation at ICE Exchange is handled not by its employees but by scores of licensed brokers who are the third party operators who can take of debt off its balance sheets or enter into any other off the balance sheet transactions without any questions asked, as the privatised exchange does not leave any audit trail for the regulators.


Whereas taxing the big banks for excessive profiteering is meaningless, a nominal transaction tax of 0.01 percent on individual transactions will be both restrictive as well as create a audit trail for regulators to follow the chain of investments at the commodity exchanges. As a matter of fact this transaction tax should be levied on all financial transactions across the board, be it at the stock exchanges or bond markets, the currency or the commodity exchanges. For if manufacturing and trading operations can bear the VAT worldwide without complaints there is no reason why monetary transactions all over cannot be subject to a Financial Transaction Tax (FATT). Apart from curbing the flow of hot money and reducing market volatility, it will help bring back order to the chaotic financial markets that govern the world today.


Sunday, April 15, 2012

E bike marvel story now published in Chinadialogue

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Exporting China's e-bike marvel

Sandip Sen

April 05, 2012

China’s development of a cheap and efficient transport solution has empowered millions of ordinary commuters, writes Sandip Sen. India shoud take note.

Can_china_export_its_e-bike_marvel_139

“Considering that there is no supporting infrastructure, the future and growth of the Indian market looks less certain than in China, unless the government becomes proactive.”

Disruptive technologies are game changers that herald a new era, toppling established market leaders within a short span of time. The battery-operated electric two-wheeler, or electric bike, is one such technology. Within a little over a decade, it will have bridged the 125-year lead that internal combustion engine (ICE) two-wheelers running on petrol have had in the market.

The industry growth chart for the past decade tells this phenomenal growth story, scripted by China almost single-handedly.

In 1998, China commenced mass-producing electric bikes indigenously with 56,000 units made by a dozen producers. The world that year produced 42 million motorbikes, almost all fuelled by fossil fuels. By 2010, China had 2,000-odd manufacturers producing 30 million electric units a year to feed a rapidly-growing annual global market of US$12 billion.

Unlike other export-oriented industries, China consumes 80% of its own production. It has over 150 million electric bikes on the road, while Europe, with 18 million units, comes a distant second. India, with less than 500,000 vehicles produced, is low down on the list. Its big, global two-wheeler brands – Hero Motors, Bajaj Auto, Lohia Machines and TVS – have missed a trick.

In 2010, the world produced 60 million motorbikes that ran on fossil fuel and 32 million electric and hybrid two-wheelers. With a near average yearly growth of 20%, electric-powered units will close the gap by 2015, with both categories expected to be producing 70 million units individually by that time.

The world’s five largest motorcycle markets are China, India, Indonesia, Brazil and Vietnam, which together have three billion people in need of low-cost, eco-friendly vehicles for daily commutes. Other emerging economies will soon latch on to the China growth story. Also, it is only a matter of time before solar batteries replace lead-acid, lanthanum and lithium ion ones. “In China, electric bicycles have a moderating influence on the use of cars,” advocacy group The Clean Air Initiative for Asian Cities told The New York Times. As a result, there are five times more electric bikes on China’s roads than cars.

Most of these are low-powered units of 200 watts, fitted with reusable lead acid batteries. They typically cost 2,400 yuan (less than US$400), the average monthly pay of a Chinese worker. They are no-frills utility vehicles chugging steadily at 20 kilometres an hour. The workforce typically travels 50 kilometres a day on single charge, usually from home to workplace, and is said to save 150 million worker hours each day. By contrast, the US motorbike market is 82% for recreation with low average bike runs of 1,000 miles per year, against 12,000 miles per year driven by the American car user.

China’s policy initiatives started with its State High-Tech Development Plan, or 863 Programme, in 1986. China was still poor, but slowly changing from Mao-style communism to Deng-style market economics. Among the seven technology sector plans identified by physicist Wang Ganchang and his team of engineers, and endorsed by Deng Xiaoping, was the energy plan that included the 863 Electric Drive Fuel Cell Vehicle Project.

This was not rocket science. As China would progress into a global factory over the years, it would need to empower millions of workers with personal transport for commuting to work. To avoid the risk of becoming dependent on imported fossil fuel, China would have to develop a low-cost alternative energy solution for its commuters.

The electric bike would give China several key advantages. One, it would provide freedom from imported technology or resources. Two, it would be a measured scale-up of the bicycle that was already in use by the factory and farm workers. Three, China could obviate huge investments in mass-transport systems that depend on subsidies to remain operational. And last, but not least, the electric two-wheeler solution was cheap, efficient and sustainable.

China introduced several policy initiatives. During the 1980s and 1990s, it started using its pool of surplus labour to build cycle lanes parallel to roads throughout its cities. Today, all cities, even tier four and tier six towns with only one million people, have segregated bicycle tracks.

At the turn of the century, as China became more prosperous, it invested 800 million yuan (US$127 million) in the 863 fuel cell project. It created several common services facilities that small entrepreneurs could use to access technology and finance. As the component and accessory plants developed, so did the assemblers retrofitting traditional bikes with motors powered by lead acid-batteries. Intensive development of the battery industry, lead acid and lithium ion, also started. Over the next decade, a slew of subsidies and policy measures – subsidised land and monetary grants – propped up the industry. Consumers got cash incentives.

The subsidy was hiked repeatedly when new and powerful models were introduced and was upgraded last year to a maximum of 3,000 yuan (US$475) for a 1,000-watt two-wheeler costing up to 10,000 yuan (US$1,600). There was no need for registration of the electric two-wheelers and no licence requirement for the buyers. This made it popular and user-friendly for students, women and the aged because it was a low-cost, low-speed but power-assisted vehicle. The big boost to the industry came, however, when several cities started to ban conventional motorbikes. Though criticised as an extreme step, it ensured that every manufacturer moved into the production of electric vehicles in China.

China also invested heavily on the back-end components and is the world’s leading producer of electric controllers, DC motors, miniature circuit breakers, brushless motors, batteries and chargers. Its sovereign fund, China Investment Corporation, made sizable investments in lithium mining and processing units in China, Chile, Argentina and Australia, and controls 70% of the global supply.

In 2007, it introduced two-wheelers powered by lithium ion batteries that gave a higher speed as well as longer life. A new product category of electric scooters rapidly became popular that catered to the more sophisticated user by offering a higher speed of 50 kilometres-per-hour and longer charge life of 80 to 100 kilometres. As speeds rose, so did the number of accidents. Some municipalities like Shenzhen have responded by banning electric bikes for six months with the intent to introduce registration and licensing for higher-powered models.

Meanwhile, the advent of high-speed units and a hybrid version powered by lithium and lanthanum batteries have also spurred the interest of global majors. Yamaha, Honda, Suzuki, Peugeot, BMW and Volkswagen are all readying new models that will hit the market this year. At Delhi's Auto Expo 2012, Indian manufacturers Hero Electricals, Lohia Auto and TVS Motor also displayed both electric-driven as well as hybrid versions.

However, the huge subsidy support and scalable volumes of China may make it difficult for Indian producers to match the success over the border. Considering that there is no supporting infrastructure – no bike lanes throughout the nation – the future and growth of the Indian market looks less certain than in China, unless the government becomes proactive.

China expects to produce 75 million units per year by 2020, with 500 million electric bikes on road. This will mean that a third of China’s population will be empowered with personal transport and will not need state-funded subsidised mass transport. The electric two-wheeler may prove a major trump card for China’s working class, providing access to low-cost, eco-friendly personal transport for commuting to work at China’s global factories.

Sandip Sen is an author, journalist and consultant. You can follow him on Twitter @ecothrust and read his risk management blog on
The Economic Times here.
This article was first published in
The Economic Times on February 9. It is reproduced here with permission

Sunday, March 25, 2012

E2W NEWS OF THE WORLD 25th March 2012

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E2W NEWS OF WORLD, WEEK ENDED 25th March 2012
Snippets available online in www.ecothrust.blogspot.com and shared drop box (Ask for Invite)
March 12 Taipei Taiwan
Taipei, March 12, 2012 (CENS)--Eyeing the European electric-bicycle market, where over one million units are sold per year, Taiwan`s China Motor Corp. (CMC) has tied up with seven local companies to jointly explore the segment.

According to CMC, the local assembler of Mitsubishi cars, said that its medium- to long-term goal is to ship 300,000 to 500,000 e-bikes to Europe per annum.

United Microelectronic Corp. (UMC), a major semiconductor maker, is also optimistic toward the high-end intelligent e-bike business, with its carbon-fiber bike-frame manufacturing subsidiary Awise Fiber Technology Co., Ltd. aggressively integrating resources in the UMC Group to tap the e-bike market.

Industry sources said that the European bicycle market peaked in 2008 with some 18.5 million units sold that year, and began to fall in the following years. However, sales of e-bikes in the region has been steadily increasing for years, including about 700,000 units in 2010 and some one million in 2011 (up 42% year-on-year).

Mar 16 Berlin, Germany
By Miriam Klaussner / Holy Fox
The electric bike industry is booming. What was once seen as a bicycle for retirees is now cool and trendy. The newest riders are young, stylish and earn good money. They see their e-bike as a car alternative.


For more read  

Sunday, March 11, 2012

E2W NEWS OF THE WORLD 11th MAR12

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                       E2W News  For Week Ended 11th Mar 2012


Also available in Dropbox ( Ask for Invite )




10 Mar NJ US
9 Mar Dublin, Ireland
8 Mar Taipei, Taiwan
7 Mar Tel Aviv Israel
6 Mar NJ US




10th Mar New Jersey US
OCEAN CITY — Denise Baj will go to court for a third time to try and win approval to navigate her electric bicycle around town. Like the first two times, Baj, 51, of First Street, doesn’t really have a choice. The police recently issued her nine tickets for riding the unusual vehicle.
“It’s ridiculous. It’s harassment at this point. The two previous cases were dismissed. There is no law banning electric bikes in New Jersey. Anywhere a bicycle goes, I can go,” said Baj. It may not be that simple. There are differences in laws relating to bicycles, motorized bicycles, mo-peds and motorcycles. The police, at the urging of municipal Prosecutor Don Charles, want to see if requirements such as insurance, registration, motorcycle-type helmets as opposed to bicycle helmets and other things apply to the unusual conveyance. Another court case is the way to test this, said police Capt. Steven Ang.
9th Mar  Dublin Ireland
DUBLIN -- Research and Markets (http://www.researchandmarkets.com/research/9e5ef2/global_electric_bi) has announced the addition of the "Global Electric Bike Battery Market 2011-2015" report to their offering.
Tech Navio's analysts forecast the Global Electric Bike Battery market to grow at a CAGR of 11.4 over the period 2011-2015. One of the key factors contributing to this market growth is governments' regulations on supporting green technology. The Global Electric Bike Battery market has also been witnessing development of next-generation batteries. However, increasing concern on battery lifecycle could pose a challenge to the growth of this market. Key vendors dominating this market space include Chaowei Power Holdings Ltd, Tianneng Power Int. Ltd, Panasonic Storage Battery (Shenyang) Co. Ltd, and Chisen Electric Co.