Merkel’s $1.4bn incentive for EVs to bolster German automotive industry
German Chancellor Angela Merkel waved the flag for electric vehicles last week through a deal with the country’s automobile industry, jointly to spend EUR 1.2bn ($1.4bn) on incentives to bolster sales of battery-powered cars. Rebates of around EUR 4,000 will be available to buyers of fully-electric models, while the sale of a plug-in hybrid variety will warrant a rebate of EUR 3,000, according to a press statement.
This direct purchase subsidy is less than that offered to buyers of EVs in France and the UK, and is expected to lead to a “relatively modest boost” in EV sales this year, according to an Analyst Reaction published on the topic by Bloomberg New Energy Finance. Of more consequence is an agreement to fund 15,000 rapid DC chargers in Germany for EUR 300m, which would “push Germany to the top position in Europe in terms of rapid charging development and help enable mass EV uptake in the 2020s,” the note says.
Meanwhile, in Canada, the government of Ontario has pledged investment of $20m to install 493 EV charging stations over the next 11 months, to help address the issue of range anxiety. And in the US, Washington State signed a bill to extend the number of electric vehicles eligible to receive sales-and-use tax exemptions. Electric vehicles costing less than $42,500 will now be eligible to receive the funding, in an effort by lawmakers to incentivise the purchase of mid-market vehicles such as the Chevrolet Bolt and Tesla Model 3.
In other news, turbine manufacturers Vestas Wind Systems and Xinjiang Goldwind Science & Technology unveiled quarterly profit figures for Q1 2016. These marked the tenth profitable quarter for the Danish company and a profit-rise of 49% for the China-based company. Both companies have benefited from an increase in turbine orders, on the back of rising demand for wind energy installations in Europe and China respectively. Goldwind reported that its net income was CNY 370.5m ($57 million) in the three months ending 31 March, up from CNY 248.8m a year earlier, while Vestas reported a smaller-than-expected net income decline of 38% to EUR 35m in Q1 2016.
The race to build larger and more efficient turbines is being run at full pelt by MHI Vestas Offshore Wind – a joint venture between Vestas Wind Systems and Mitsubishi Heavy Industries. The wind turbine-maker is currently testing its new 8MW turbine on land in Denmark, before installing the world’s most powerful turbine yet in large offshore wind parks. Spanish utility Iberdrola announced last week that it will purchase 102 of the turbines at a value of some GBP 825m ($1.2bn).
On the solar front, as SunEdison battles with bankruptcy negotiations, shares of Yingli Green Energy plunged the most in more than seven months after the Baoding, China-based company signaled it may follow a similar demise. The decreasing cost of solar panels and declining shipments brought about due to a shortage of working capital are behind Yingli’s losses last year and concern for its ability to repay loans due in two weeks, for which it is in talks with creditors.
Meanwhile, SunEdison hired John Dubel as chief restructuring officer, to take care of the clean-energy company’s financial restructuring following its listing of some $16.1bn in liabilities after a global acquisition spree. The US company’s bankruptcy filing is reverberating halfway around the world in India. Its search for equity partnerships for as much as 2.4GW of capacity in that country is adding to a surplus of green capacity up for sale, say developers. “Projects in India have won contracts but have yet to be financed and may find it difficult to raise capital due to their rock-bottom contract prices,” wrote BNEF solar analysts in the Insight Note : What’s (Still) for sale at SunEdison. The company is seeking sales on as much as 5.3GW of project in as many as 12 countries, in an effort to pay back debtor-in-possession loans.
In other news, Norway’s $870bn sovereign wealth fund announced today that it will back shareholder proposals to introduce climate reporting at the annual general meeting of Exxon Mobil and Chevron at the end of the month. Norges Bank Investment Management previously supported similar proposals at Royal Dutch Shell and BP.
In emerging markets, Palestine laid out a plan to auction permits to build some 10 solar plants as large as 10MW each, in a bid to reduce the amount of power it purchases from neighboring Israel, and improve its energy security.
In Latin America, Brazil’s economic recession significantly reduced demand in a recent energy auction, where companies won contracts to sell 278MW from 29 projects, out of more than 29GW from 802 developments that were qualified to participate. Distribution companies are somewhat oversupplied as power consumption in Brazil declined 4.2% in the first quarter, while “a low availability of funds, higher interest rates and rising development costs” exacerbated the situation, according to BNEF analysis.
Source:Bloomberg New Energy Finance
