subject: Tis The Season To Be Green [print this page] Green chips refer to environmentally friendly stocks and they are gaining in popularity. With the government having an expanded renewable energy target of 20% by 2020, how can you know which companies will turn out to be the winners?
Green investments
Renewable energy refers generally to:
* Wind
* Wave
* Geothermal
* Solar or
* Nuclear
Developing companies
When looking at investing in these companies, it's important to separate the developing technologies from companies still making money. Any company developing something new needs to have a few questions thrown at them including:
* What is the timeline until commercialisation?
* How much money is this going to take?
* Do they have a cornerstone investor supporting their plans?
* What are the chances of success?
* What is the likely demand/supply once commercialisation has occurred?
Infigen Energy
An example of a company that is already fairly well developed and making money is Infigen Energy. This company owns wind assets in Asia, Europe and North America. It's been looking to sell its assets in the US, Germany and France to increase growth in Australia.
The Rudd Government's emission trading targets means that Infigen sees more growth in Australia than these other markets.
Government funding
Then on the other end of the spectrum are companies which are testing new technologies. Recently the government gave $235 million towards developing these technologies.
Four companies received these funds:
* Geodynamics
* Petratherm
* Victoria Wave Partners and
* Hydro Tasmania
Geodynamics
Geodynamics is focused on geothermal technology. It's developing its proof of concept project at Cooper Basin which has the hottest known rocks of its type in the world.
The company believes that Copper Basin will be the lowest-cost renewable resource source in Australia.
It's received $90 million from the Federal Government which it hopes will lead to commercial expansion of the Cooper Basin.
Petratherm
Petratherm is another geothermal company with projects in Australia as well as overseas. Recently, the company entered into an agreement with four Chinese institutions to identify potential geothermal projects in China.
It will be using the funding from the Federal Government to develop a geothermal system in South Australia.
Victoria Wave Partners
Victoria Wave Partners is another company with an association to big names. It's a partnership between Leighton Contractors and Ocean Power Technologies. As the name suggests, the company is looking to harness energy.
Hydro Tasmania
Hydro Tasmania is the only company not listed on the sharemarket. This company is looking to demonstrate the integration of wind, solar and storage with a biodiesel generator.
Origin Energy
And then there are companies such as Origin Energy which have had a good track record of recognising new energies and investing in them. It's involved in a joint venture with Geodynamics to bring their energy to market.
by: Julia Lee
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