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Toshiba Picked to Conduct Energy-Saving Pilot Project in France
2010-12-28 09:05:47.381 GMT
By Bloomberg News
Dec. 28 (Bloomberg) -- Toshiba Corp. and Toshiba Solutions
Corp. were chosen to conduct a feasibility study for an energy-
conservation demonstration project in Lyon, France by the end of
March 2011.
The project includes setting up a remote monitoring system
for photovoltaic systems, charging infrastructure for electric
vehicles and systems to help manage energy use in buildings in
Lyon, Toshiba Corp. said in a statement yesterday. The company
didn't say how much would be invested in the project.
Japan's state-owned New Energy and Industrial Technology
Development Organization, which is responsible for the Lyon
program, will also initiate a similar project in Spain in 2011,
the organization said Dec. 24.
For Related News and Information:
Most-read alternative energy stories: MNI ALTNRG <GO>
For top news on renewable energy TOP ENV <GO>
New Energy Finance news and analysis: BNEF <GO>
--Editor: John Liu
To contact Bloomberg News staff for this story:
Feifei Shen in Beijing at +86-10-6649-7527 or
Fshen11@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or
landberg@bloomberg.net.
2010/12/30
Fwd: Floods Damage Cotton Crops in Australia’s Queensland (Update1)
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+------------------------------------------------------------------------------+
Floods Damage Cotton Crops in Australia's Queensland (Update1)
2010-12-29 03:55:02.113 GMT
(Updates with prices in sixth paragraph.)
By Wendy Pugh
Dec. 29 (Bloomberg) -- Flooding in Australia, the fourth-
largest cotton exporter, washed away some crops and may reduce
yields in Queensland state, an industry group said.
About 7,500 hectares (18,533 acres) at Theodore have been
destroyed, David Bone, communications manager at Sydney-based
Cotton Australia, said by phone. The effect of rain on crop
losses and yields in other areas, where floods may more quickly
subside, will depend on weather in coming weeks, he said.
Cotton futures surged to an all-time high last week on
speculation that global demand led by China will outpace supply.
Cotton Australia said Dec. 8 that national production this
season may reach a record 4.2 million bales, with 665,000
hectares planted, after wet weather ended drought in the
country's east and boosted irrigation dams.
"Around Theodore, crop has been washed away," Bone said.
"There would be losses in other areas but you need the water to
go off the land and for the crop to attempt to recover before
you can really say what the situation is," he said.
It's too soon to revise output forecasts, with harvesting
to mostly start in April, he said.
Cotton for March delivery declined 1.4 percent to $1.4231 a
pound on ICE Futures U.S. at 2:54 p.m. Melbourne time. The price
reached a record $1.5912 on Dec. 21.
Production in Australia may gain to 894,000 metric tons in
2010-2011, compared with 387,000 tons last season, the
Australian Bureau of Agricultural and Resource Economics and
Sciences said in a report Dec. 7. The forecast equals 3.9
million bales weighing 227 kilograms (500 pounds) each,
according to Bloomberg calculations.
Australia had its wettest September-to-November spring on
record, according to the Bureau of Meteorology. The rain has
continued this month, disrupting grain harvesting and coal
production and forcing hundreds of people to be evacuated.
For Related News and Information:
Top commodity stories: CTOP <GO>
Top agricultural stories TOP AGR <GO>
Most read Australian news: MNI AUD <GO>
--Editors: Matthew Oakley, Richard Dobson.
To contact the reporter on this story:
Wendy Pugh in Melbourne +61-3-9228-8736 or
wpugh@bloomberg.net
To contact the editor responsible for this story:
Richard Dobson at +86-21-6104-3030 or
rdobson4@bloomberg.net
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Floods Damage Cotton Crops in Australia's Queensland (Update1)
2010-12-29 03:55:02.113 GMT
(Updates with prices in sixth paragraph.)
By Wendy Pugh
Dec. 29 (Bloomberg) -- Flooding in Australia, the fourth-
largest cotton exporter, washed away some crops and may reduce
yields in Queensland state, an industry group said.
About 7,500 hectares (18,533 acres) at Theodore have been
destroyed, David Bone, communications manager at Sydney-based
Cotton Australia, said by phone. The effect of rain on crop
losses and yields in other areas, where floods may more quickly
subside, will depend on weather in coming weeks, he said.
Cotton futures surged to an all-time high last week on
speculation that global demand led by China will outpace supply.
Cotton Australia said Dec. 8 that national production this
season may reach a record 4.2 million bales, with 665,000
hectares planted, after wet weather ended drought in the
country's east and boosted irrigation dams.
"Around Theodore, crop has been washed away," Bone said.
"There would be losses in other areas but you need the water to
go off the land and for the crop to attempt to recover before
you can really say what the situation is," he said.
It's too soon to revise output forecasts, with harvesting
to mostly start in April, he said.
Cotton for March delivery declined 1.4 percent to $1.4231 a
pound on ICE Futures U.S. at 2:54 p.m. Melbourne time. The price
reached a record $1.5912 on Dec. 21.
Production in Australia may gain to 894,000 metric tons in
2010-2011, compared with 387,000 tons last season, the
Australian Bureau of Agricultural and Resource Economics and
Sciences said in a report Dec. 7. The forecast equals 3.9
million bales weighing 227 kilograms (500 pounds) each,
according to Bloomberg calculations.
Australia had its wettest September-to-November spring on
record, according to the Bureau of Meteorology. The rain has
continued this month, disrupting grain harvesting and coal
production and forcing hundreds of people to be evacuated.
For Related News and Information:
Top commodity stories: CTOP <GO>
Top agricultural stories TOP AGR <GO>
Most read Australian news: MNI AUD <GO>
--Editors: Matthew Oakley, Richard Dobson.
To contact the reporter on this story:
Wendy Pugh in Melbourne +61-3-9228-8736 or
wpugh@bloomberg.net
To contact the editor responsible for this story:
Richard Dobson at +86-21-6104-3030 or
rdobson4@bloomberg.net
Fwd: China Singyes Starts Operating Smart Grid Project in Guangdong
---
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+------------------------------------------------------------------------------+
China Singyes Starts Operating Smart Grid Project in Guangdong
2010-12-29 04:09:06.562 GMT
By Bloomberg News
Dec. 29 (Bloomberg) -- China Singyes Solar Technologies
Holdings Ltd. has started operating a smart grid project in
Zhuhai, Guangdong province.
The Dong'ao Island project will store energy and help to
regulate power generated from wind, solar and diesel fuel, the
company said in a filing to the Hong Kong Stock Exchange
yesterday. Singyes didn't say how much it invested in the
project.
The grid can be connected to the national electricity
network during periods of normal demand and separated to supply
only the island when there is a shortage.
Singyes, whose shares have gained about 38 percent this
quarter, said the project will increase the use of renewable
energy on the island to 70 percent from 30 percent.
The smart grid system can also be used to supply power to
larger electricity networks in urban areas, Singyes said.
For Related News and Information:
Most-read alternative energy stories: MNI ALTNRG <GO>
For top news on renewable energy TOP ENV <GO>
New Energy Finance news and analysis: BNEF <GO>
--Editors: Baldave Singh, John Viljoen.
To contact Bloomberg News staff for this story:
Feifei Shen in Beijing at +86-10-6649-7527 or
Fshen11@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or
landberg@bloomberg.net.
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
China Singyes Starts Operating Smart Grid Project in Guangdong
2010-12-29 04:09:06.562 GMT
By Bloomberg News
Dec. 29 (Bloomberg) -- China Singyes Solar Technologies
Holdings Ltd. has started operating a smart grid project in
Zhuhai, Guangdong province.
The Dong'ao Island project will store energy and help to
regulate power generated from wind, solar and diesel fuel, the
company said in a filing to the Hong Kong Stock Exchange
yesterday. Singyes didn't say how much it invested in the
project.
The grid can be connected to the national electricity
network during periods of normal demand and separated to supply
only the island when there is a shortage.
Singyes, whose shares have gained about 38 percent this
quarter, said the project will increase the use of renewable
energy on the island to 70 percent from 30 percent.
The smart grid system can also be used to supply power to
larger electricity networks in urban areas, Singyes said.
For Related News and Information:
Most-read alternative energy stories: MNI ALTNRG <GO>
For top news on renewable energy TOP ENV <GO>
New Energy Finance news and analysis: BNEF <GO>
--Editors: Baldave Singh, John Viljoen.
To contact Bloomberg News staff for this story:
Feifei Shen in Beijing at +86-10-6649-7527 or
Fshen11@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or
landberg@bloomberg.net.
Fwd: Morocco Preselects Four Bidding Groups for Solar Power Project
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Morocco Preselects Four Bidding Groups for Solar Power Project
2010-12-29 13:20:47.814 GMT
By Aida Alami
Dec. 29 (Bloomberg) -- Morocco preselected four groups that
include Enel SpA, Mitsui & Co. and Orascom Construction
Industries for the first phase of a 500-megawatt solar energy
project in the country's south.
They were picked out of 19 bidding groups, the Rabat-based
Moroccan Agency for Solar Energy said on its website. The
Ouarzazate project targets full operation by 2015.
One group includes Mitsui, Abeinsa ICI, Abengoa Solar and
Abu Dhabi National Energy Co.. A second is made up of Enel and
ASC SCE and a third by International Company for Water & Power,
or ACWA, Aries IS and TSK EE. A fourth group includes Egypt's
Orascom Construction, Solar Millennium AG and Evonik Steag AG.
For Related News and Information:
Stories on Morocco: NI MOROCCO BN <GO>
Top regional stories: TOP AFRICA <GO>
--With assistance by Alaa Shahine in Cairo, Editors: Jonas
Bergman, John Buckley
To contact the reporter on this story:
Aida Alami via Cairo newsroom at +202-2-461-8508
To contact the editor responsible for this story:
Mahmoud Kassem in Cairo at +202-2-461-8508 or
mkassem1@bloomberg.net.
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Morocco Preselects Four Bidding Groups for Solar Power Project
2010-12-29 13:20:47.814 GMT
By Aida Alami
Dec. 29 (Bloomberg) -- Morocco preselected four groups that
include Enel SpA, Mitsui & Co. and Orascom Construction
Industries for the first phase of a 500-megawatt solar energy
project in the country's south.
They were picked out of 19 bidding groups, the Rabat-based
Moroccan Agency for Solar Energy said on its website. The
Ouarzazate project targets full operation by 2015.
One group includes Mitsui, Abeinsa ICI, Abengoa Solar and
Abu Dhabi National Energy Co.. A second is made up of Enel and
ASC SCE and a third by International Company for Water & Power,
or ACWA, Aries IS and TSK EE. A fourth group includes Egypt's
Orascom Construction, Solar Millennium AG and Evonik Steag AG.
For Related News and Information:
Stories on Morocco: NI MOROCCO BN <GO>
Top regional stories: TOP AFRICA <GO>
--With assistance by Alaa Shahine in Cairo, Editors: Jonas
Bergman, John Buckley
To contact the reporter on this story:
Aida Alami via Cairo newsroom at +202-2-461-8508
To contact the editor responsible for this story:
Mahmoud Kassem in Cairo at +202-2-461-8508 or
mkassem1@bloomberg.net.
Yest/ EU Carbon-Dioxide Allowances Increase Along With Natural Gas
---
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+------------------------------------------------------------------------------+
EU Carbon-Dioxide Allowances Increase Along With Natural Gas
2010-12-29 17:52:27.701 GMT
By Ewa Krukowska and Catherine Airlie
Dec. 29 (Bloomberg) -- European Union carbon permits rose
as higher prices for natural gas helped boost demand for
emission rights.
EU permits for December 2011 gained 1.3 percent to 14.28
euros ($18.82) as of 5:30 p.m. on the ICE Futures Europe
exchange in London on the first day of trading after the
Christmas holidays.
U.K. natural gas for delivery next summer, the six months
through September 2011, rose 3.3 percent to 55 pence a therm,
according to broker prices compiled by Bloomberg. Higher gas
prices may prompt some power utilities to burn more coal, which
requires about twice as many carbon permits as gas-powered
generation.
For Related News and Information:
Emission market news NI ECREDITS <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
Sustainability, environmental indexes SEI <GO>
--Editor: Mike Anderson
To contact the reporter on this story:
Ewa Krukowska in Warsaw at +48-22-433-44-70 or
ekrukowska@bloomberg.net or
Catherine Airlie at +44-20-7073-3308 or
cairlie@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
EU Carbon-Dioxide Allowances Increase Along With Natural Gas
2010-12-29 17:52:27.701 GMT
By Ewa Krukowska and Catherine Airlie
Dec. 29 (Bloomberg) -- European Union carbon permits rose
as higher prices for natural gas helped boost demand for
emission rights.
EU permits for December 2011 gained 1.3 percent to 14.28
euros ($18.82) as of 5:30 p.m. on the ICE Futures Europe
exchange in London on the first day of trading after the
Christmas holidays.
U.K. natural gas for delivery next summer, the six months
through September 2011, rose 3.3 percent to 55 pence a therm,
according to broker prices compiled by Bloomberg. Higher gas
prices may prompt some power utilities to burn more coal, which
requires about twice as many carbon permits as gas-powered
generation.
For Related News and Information:
Emission market news NI ECREDITS <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
Sustainability, environmental indexes SEI <GO>
--Editor: Mike Anderson
To contact the reporter on this story:
Ewa Krukowska in Warsaw at +48-22-433-44-70 or
ekrukowska@bloomberg.net or
Catherine Airlie at +44-20-7073-3308 or
cairlie@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
Fwd: Nissan Leads Charge as Automakers Test U.S. Electric-Car Market
---
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+------------------------------------------------------------------------------+
Nissan Leads Charge as Automakers Test U.S. Electric-Car Market
2010-12-29 22:00:00.7 GMT
By Eric Pooley and David Welch
Dec. 30 (Bloomberg) -- Most of the drivers on U.S. Route
101 in Marin County, California, on a foggy December morning are
oblivious to the black snub-nosed car gliding along beside them.
Every so often, someone does a double take, gives a thumbs
up or snaps a cell-phone picture, because the car in the next
lane is one they've never seen before: Nissan Motor Co.'s Leaf,
the world's first affordable, mass-produced electric vehicle.
This particular Leaf happens to be No. 1, the first sold
anywhere. At the wheel is Olivier Chalouhi, who took delivery an
hour earlier amid some impressive hoopla at a Nissan dealership
in Petaluma. Now, driving south to San Francisco with Nissan
Americas Chairman Carlos Tavares riding shotgun, Chalouhi, a
31-year-old Web entrepreneur, is explaining how he came to be
the first person to buy this car.
His voice is soft but easy to hear from the back seat,
Bloomberg Businessweek reports in its Jan. 3 issue. With no
internal-combustion engine, the Leaf, which sells for about
$25,000 after a $7,500 federal tax credit, is eerily quiet,
almost as cocoonlike as Nissan's $50,000-plus Infiniti M.
"It all started when I saw an ad for the Chevy Volt,"
Chalouhi says.
General Motors Co.'s Volt, which started shipping to
dealers in mid-December, is the Leaf's chief competitor
in the green-car sweepstakes. It runs for about 40 miles
(64 kilometers) on an electric charge before a small gasoline
engine kicks in to recharge the battery.
'No Tailpipe'
That gives the Volt more than 350 miles of range, unlike
the Leaf, which runs for 60 to 100 miles, varying with weather
and terrain and driving style, before needing a recharge that
can take 30 minutes to 7 hours, depending on the strength of the
charger. The Volt's gasoline engine makes it less attractive to
some eco-minded consumers such as Chalouhi.
"In all the articles I read about the Volt, the Leaf was
discussed as well," he says. "As soon as I found out about the
Leaf, I forgot about the Volt. The Volt wasn't going to project
the image I wanted. It has a tailpipe."
"The Volt is a hybrid, a very nice hybrid," Tavares, 52,
says from the passenger seat. "But we see it as a transitional
vehicle and we were always of the opinion that we were providing
the ultimate destination: 100 percent clean. No emissions. No
gasoline. No tailpipe."
The energy chain is more complicated than that. The
electricity powering a Leaf may or may not come from low-
emission sources.
Plenty of Pep
Right now, it's time to enjoy the ride. Chalouhi turns off
the highway and guns the car up a steep, winding road in the
Marin Headlands overlooking San Francisco Bay. The Leaf is
surprisingly agile and sure-footed. Its electric motor has
plenty of pep, and 600 pounds (270 kilograms) of laminated
lithium-ion batteries below the floorboards help it hug the
road.
Chalouhi is having fun with the tight turns heading into
the hills, where Nissan has stationed a media team to capture
the moment with some suitably dramatic images. Alas, the Golden
Gate Bridge is hiding behind the fog, making the glamour shot
impossible, so Chalouhi guides the car back down toward 101
while a product manager, Paul Hawson, briefs him on the next
photo op, at City Hall in San Francisco.
"At the end of the ceremony, you and Mr. Tavares will go
to the car and plug in the charger together," Hawson says.
Chalouhi looks worried and says, "So I'm not going to be
charging for long?"
"A short amount of time, yes," Hawson says.
'Range Anxiety'
Chalouhi lives 35 miles to the south in Redwood City; the
Leaf's sophisticated navigation screen is telling him he has
37 miles left before his battery runs out of juice. The owner of
the first mass-produced electric vehicle, in other words, is
experiencing his first twinge of what marketers at Detroit-based
GM have helpfully named "range anxiety."
"So I won't get much charge at City Hall?" Chalouhi says.
"You'll get some," Hawson assures him. "You'll get home.
We'll make sure you get home."
The psychology of the U.S. car buyer is the biggest
roadblock Nissan must get past for the Leaf to become the hit
that the company promises it will be. Carlos Ghosn, chief
executive officer of Yokohama, Japan-based Nissan, likes to
point out that 95 percent of drivers travel fewer than 100 miles
a day, making the Leaf practical for most.
'Risk Aversion'
Yet practicality doesn't always translate into peace of
mind. A recent study by Synovate Motoresearch, a unit of London-
based Aegis Group Plc, showed that 60 percent of 1,600 U.S.
consumers surveyed think their gasoline-powered cars are
reliable. Only 30 percent of those surveyed think hybrid-
electric cars are reliable, even after a decade of virtually
trouble-free performance, and just 10 percent think electric
cars will be trouble-free.
"The main thing holding back electric vehicles is the
customer," says John German, a former strategic planner for
Honda Motor Co. who is now a program director for the
International Council on Clean Transportation, a Washington-
based advocacy and research group. "It's risk aversion."
Nissan and GM missed the decade-long trend toward gasoline-
electric hybrid vehicles. Toyota Motor Corp.'s Prius car
dominates that segment, which still accounts for less than
3 percent of all vehicles sold in the U.S.
When Ghosn joined Nissan as chief operating officer in
1999, the company was flirting with bankruptcy. As CEO starting
in 2001, he slashed 60 percent of its research and development
projects while keeping the battery program that led to the Leaf.
R&D Spending
In 2005 he also became CEO of Renault SA, which owns
about 44 percent of Nissan, while Nissan holds 15 percent of the
French automaker. The Renault-Nissan alliance has now spent more
than 4 billion euros ($5.3 billion) developing electric vehicles
and batteries, according to the company.
Both Nissan and GM began work on their new electric
vehicles in 2006, when the rest of the auto industry had more or
less given up on such cars after a brief foray in the late 1990s
and early 2000s.
When Nissan announced its project that year, "nobody took
us seriously," Ghosn, 56, says in a telephone interview. "We
had many very ironic comments coming from our competitors about
the illusion of the electric car."
The sniping never stopped. Former GM Vice Chairman Bob
Lutz, who helped develop the Volt, told Bloomberg News in
January that all-electric vehicles were still years away from
widespread adoption.
"He's rolling the dice," Lutz said of Ghosn's battery-
only approach. "I don't see it happening."
Earlier Fiasco
Until a battery emerged with better range at less cost, the
industry decided, all-electric vehicles were too limited for the
mainstream. Some investors still seem to agree. Electric-car
maker Tesla Motors Inc.'s shares dropped 15 percent on Dec. 27,
after insiders' lockup period expired.
Everyone remembered the fiasco of the abortive electric-
vehicle era, from 1996 to 2003, when California required GM and
other carmakers to offer such models. The cars were too
expensive to be profitable, so the automakers succeeded in
overturning the state mandate, then scrapped the program.
In GM's case, the company crushed many of the cars, called
EV-1s, a public-relations nightmare captured in the 2006
documentary "Who Killed the Electric Car?"
Now, "everybody is competing for the electric-car
market," Ghosn says. "People who don't really have an electric
car are saying, 'We have one, too.' Even the hybrids want to
look electric, which was not obvious four or five years ago. My
call was the right one. It doesn't always work out that way, so
you're happy when you're vindicated."
Government Pressure
His declaration of victory may be a little premature. For
one thing, major automakers no longer have a choice about going
electric. They have to, largely because of government mandates.
California law requires the largest automakers to have low- or
no-emissions cars in their fleets by 2012. The new fuel-economy
standards of U.S President Barack Obama's administration raise
fleet-average requirements to 35.5 miles per gallon by 2016, a
40 percent improvement over current levels. Such rules make
having a zero-emissions vehicle a smart way to balance out the
gas guzzlers.
More than a dozen electric and plug-in hybrids are slated
to go on sale in the next two years, and entries from carmakers
such as Ford Motor Co., Honda, Toyota and Mazda Motor Corp. will
be on display at the Detroit auto show, which begins on Jan. 10.
Biggest Bet
Still, Nissan is the only major automaker betting so
heavily on all-electric technology. GM is hedging, with cars
that run on electricity while using a gasoline engine to
recharge.
Honda has put its research and development muscle into
hydrogen fuel-cell technology, which remains prohibitively
expensive. Each Honda FCX Clarity hydrogen vehicle costs the
automaker more than $100,000 to produce, according to K.G.
Duleep, a fuel-cell analyst at Energy & Environmental Analysis
Inc., an Arlington, Virginia-based consulting firm.
Bayerische Motoren Werke AG, Volkswagen AG and Daimler AG's
Mercedes-Benz have focused on ultra-efficient diesel engines.
Toyota's main electric-vehicle offering is an incremental play:
a plug-in Prius that adds about 15 miles of all-electric range
before the hybrid motor takes over.
Market Skeptics
It remains to be seen whether this flood of supply will
meet with sustainable demand. In a report called "Drive Green
2020: More Hope Than Reality," marketing-research firm J.D.
Power & Associates projects that in nine years, battery-electric
models such as the Leaf will have annual sales of only about
100,000 units in the U.S. and 1.3 million globally, or about
1.8 percent of the 71 million vehicles expected to be sold.
Another 3.9 million hybrids and plug-in hybrids will be
sold worldwide in 2020, bringing the total electric and hybrid
market to about 7 percent, the Westlake Village, California-
based firm estimates.
"While most consumers say they want to create a smaller
personal carbon footprint, research shows this consideration
carries relatively low weight in the vehicle purchase
decision," the J.D. Power report says.
Other studies are more bullish. Bloomberg New Energy
Finance projects that plug-in cars such as the Leaf and the Volt
may make up 9 percent of U.S. sales by 2020 and 22 percent by
2030. Yet after 10 years as the world leader in hybrid sales,
Toyota has never sold more than 187,000 Priuses in the U.S. in a
year, about the same number as Hyundai Motor Co.'s Sonata sedan.
Prius sales reached that peak in 2007, just before the financial
crisis began, and have dropped since then as lower fuel prices
have lured Americans back to sport-utility vehicles.
Boosting Production
Now consider Ghosn's projections for the Leaf. Nissan will
produce only about 50,000 this year and next. Then by the end of
2012, three new Leaf plants will be operating -- in Oppama,
Japan; Sunderland, England; and Smyrna, Tennessee -- with a
total capacity of 500,000 cars a year and the ability to
increase to 1 million, just as all those competing electric
vehicles and hybrids from Toyota, Volkswagen's Audi and Ford
will be coming to market.
Ghosn is the first to admit that he's making a huge bet. It
may not be an altogether crazy one.
Tom Turrentine is director of the Plug-in Hybrid Electric
Vehicle Research Center at the University of California, Davis.
An anthropologist by training, Turrentine has joined with major
automakers to conduct a series of detailed studies of Americans
driving electric cars -- not just enthusiasts of such models,
but regular people.
'Having Fun'
As his team observed the driving habits of more than 300
households with vehicles such as electrified BMW Minis, plug-in
Priuses and Nissan Hypermini two-seat electrics during the past
several years, the data told him that such models "were never
going to be 'just like' internal-combustion cars."
"There's something about electric drive, with its quiet
glide and immediately available torque, that drivers really
enjoy," Turrentine says. "Even when they aren't going fast,
people think they are having fun. Engineers at BMW tell me it's
the way the cars accelerate. You don't have clutches and
transmissions, so your accelerator pedal is feeding electricity
directly to the motor, and you feel it accelerate the car.
There's nothing in between you and the tires. Some people fall
in love with that feeling."
For all his confidence, Ghosn understands the immense
challenges to expanding Leaf sales. That's why, for the past
three years, his company has had a team of traveling executives,
called the Zero Emission Mobility Team, meeting with city, state
and utility officials around the U.S. to solve infrastructure
problems such as the permitting process for home chargers and
the need to create a network of high-speed public chargers in
cities and along interstate highways.
'Whole New System'
"We are not the provider of just a car this time," he
says. "We are the provider of a whole new system."
Utilities may welcome the opportunity to sell more
electricity, while they also worry about the load. Several new
electric vehicles suddenly plugged into the same suburban block
could fry a local transformer.
More difficult is installing the needed network of charging
stations, both in the home and in public, to allay range
anxiety; 13,000 public chargers are expected to be in the ground
by the end of 2011. The U.S., by Nissan's count, has 106,000
gasoline stations.
'Pragmatic Majority'
The most important issue has to do with customer education
and acceptance. To appeal to the "pragmatic majority" of
buyers, Nissan needs to sell the cost advantage of ownership:
Year in and year out, electric vehicles cost far less to own and
operate than internal-combustion models -- about 2 cents a mile
to drive, compared with about 13 cents a mile for an average
gasoline-powered car, according to the automaker. They also are
less expensive to maintain.
To buy Leafs in serious numbers, these pragmatic men and
women need to be able to imagine themselves behind the wheel of
an electric vehicle. For the product to be competitive, Nissan
also must keep the price down. Nissan makes its own batteries in
a joint venture with NEC Corp., and they account for roughly
half the cost of the car, making the initial price of an
electric vehicle more than that of comparable gasoline-powered
models.
For now, federal and state tax credits and rebates are
required to make the cars cost-competitive. The Leaf's sticker
price of about $33,000 is $10,000 more than a well-equipped
Honda Civic, for example. With the $7,500 federal tax credit,
along with rebates and tax credits available in 16 states, such
as a $5,000 price break in California and a $4,500 rebate in
Hawaii, the electric vehicle becomes competitive.
Economies of Scale
Assuming the new Congress doesn't roll it back, that
federal tax credit is available to the first 200,000 electric-
vehicle customers of each automaker. When it runs out, Nissan
expects to be selling so many Leafs that economies of scale will
bring costs down. Ghosn says the company needs to sell between
500,000 and 1 million Leafs a year to enjoy those economies.
"Then we'll be able to compete without any government
subsidies," he says. "Our battery costs are already coming
way, way down. Everybody in the business has estimates, but
nobody really knows everything we're up to. The Leaf is going to
be one of the most profitable products Nissan has ever made."
While Ghosn was planning the Leaf in 2006, Lutz and Jon
Lauckner, GM's vice chairman and director of product planning at
the time, were also trying to dream up an electric car that
would leapfrog the Prius. Like Nissan, GM was after some much-
needed public acclaim and green credibility. The company had
been derided for shutting down its EV-1 and crushing the cars,
and Lutz thought a pure electric vehicle that used no gasoline
would be a public-relations coup.
'Game-Changing Concept'
Lauckner, now president of General Motors Ventures LLC, the
automaker's technology venture-capital group, studied U.S.
driving habits just as Ghosn and Tavares were doing at Nissan.
Where Nissan focused on the fewer than 100 miles a day traveled
by 95 percent of drivers, Lauckner lingered over another set of
numbers: 78 percent drive fewer than 40 miles a day.
He figured a car equipped with enough battery power to go
that far, plus a gasoline engine to recharge it on the fly,
"would be a game-changing concept that would address the
shortfalls of electric vehicles on one side and go beyond the
top hybrids on the other. We wanted this to be someone's first
car, not their second or third commuter car."
Forget About Gasoline
Lauckner showed Lutz a schematic for the Chevy Volt, a car
that would allow many drivers to forget about gasoline unless
they were taking a special trip. Someone with a 30-mile commute
would get roughly 150 miles per gallon, and the car would travel
well over 300 miles on a tank of gas.
The U.S. Environmental Protection Agency, using a new
metric designed to compare different fuel types, now estimates
the Volt's average fuel economy at 93 "mpg equivalent" in
electric mode, 37 in gas-only. The Leaf's mpg equivalent is 99.
Later that summer, Lutz and Lauckner took the proposal to
then-CEO Rick Wagoner, who had killed GM's EV-1 after $1 billion
in investments because he was convinced consumers didn't want
it. Wagoner bought into the idea.
Once Wagoner and GM's board approved, engineers had to
build the thing. Getting beyond the early adopters and selling
to the public meant GM needed to offer more than just fuel
economy, especially since the Volt was going to list at more
than $40,000 before tax credits.
History Books
The car had to be upscale without being a luxury vehicle,
says Tony Posawatz, the Volt's vehicle line director. In his
small office at GM's Vehicle Engineering Center in suburban
Detroit, Posawatz pulls out books on the history of electric
vehicles, which date back to 1881 and outsold gasoline-powered
cars in the early days. Henry Ford's wife drove one.
Posawatz points to a 1910 ad for the Baker Electric.
Beneath a drawing of a woman at the wheel, the ad copy boasts of
the "quietest and most refined electric car." Back then, he
says, electric-car makers such as Baker, Detroit Electric and
Waverly Electric targeted women, who wouldn't have to crank a
starter or tolerate the noise and soot of gasoline-powered cars.
No one has to crank a car anymore, while electric cars are
still quiet and clean. That meant that even if the Volt wasn't
going to be a luxury car, it could be premium in many ways. A
near-silent ride would be a selling point. Like Nissan's
engineers, Posawatz knew that when you get rid of a car's
exhaust note, the vehicle is so quiet that passengers get a
bigger dose of road and wind noise.
Smoothing Ride
In conventional cars, "the gasoline engine masks a lot of
your sins," Posawatz says. The engineers worked to tighten the
gaps between doors and body panels to reduce wind noise, then
packed the car with sound-deadening material to hide the growl
of the gasoline engine when it's running. GM also engineered a
body that is stiffer than most luxury cars to give it a smoother
ride and more precise handling, something the hybrids on the
market traditionally do not offer.
With 80 percent high-strength steel and a buttoned-up body,
the Volt is as stiff as most luxury sports cars, built to handle
hairpin turns. It drives as well or better than a Leaf. One
thing is certain: Neither will ever be mistaken for a golf cart.
In the spring of 2008, more than 2 1/2 years before the
Leaf would go on sale and a year before Ghosn showed it off in
public for the first time, Nissan gathered executives from
governmental affairs, product planning, communications, sales
and marketing to create its Zero Emission Mobility Team.
Spreading Message
The team had a huge job: prepare America for the electric
vehicle by creating Leaf-friendly policies in states with
progressive environmental agendas. That meant joining with local
officials and utilities to encourage tax incentives, and
streamlining the permitting and installation process for home
chargers while building a network of public charging stations
and educating drivers about the advantages of electric vehicles.
Doing all of that meant the carmaker would have to
establish relationships with a range of players it hadn't dealt
with before. And it meant Nissan would have to insert itself,
for the first time, between its dealers and their customers.
"We've never had to organize anything like this," says
Brian Carolin, Nissan's senior vice president for sales and
marketing in North America. "I know how to sell cars, and after
26 years with this company, I like to think I understand
American psychology. But this is the most interesting and
demanding car launch I've ever been involved with. I have a
portfolio of 17 Nissan nameplates, half a dozen Infinitis and
one Leaf. I spend a wildly disproportionate amount of my time on
the Leaf."
Choosing Markets
Mobility Team executives Tracy Woodard, from government
affairs, and Mark Perry, from product development, toured the
country together meeting with activists and officials, figuring
out which markets to sell into first. They sorted potential
markets according to three main criteria.
First, they looked for places that had electric-vehicle
incentives left over from the late 1990s and early 2000s. Then
they pored over maps showing the density of hybrid customers --
of the early Leaf buyers, 80 percent have never owned a Nissan
before and almost half have owned Priuses. Third, they focused
on states where the local utilities were comfortable with the
idea and willing to upgrade their grids if needed.
They came up with a Wave One map that included Washington,
Oregon, California, Arizona, Tennessee, Texas and Hawaii. Wave
Two will follow in the late summer and early fall of 2011,
continuing around the Sun Belt and then up the East Coast. By
limiting early sales to just seven states, Nissan can help
achieve a critical mass of charging stations.
Of the 13,000 stations expected nationwide by the end of
2011, almost half will be on the West Coast. Limiting the market
also means Nissan will have to train, initially, only 163 of its
1,000 U.S. dealers to sell and service the car.
Meeting With Stakeholders
In the summer of 2008, Woodard, 45, and Perry, 53, began
reaching out to "conveners," influential local officials and
activists who could bring together groups of stakeholders. In
the fall, they held their first major meeting in San Francisco,
organized by Jack P. Broadbent, CEO of the Bay Area Air Quality
Management District.
"Nissan did this right," Broadbent says. "They got here
six months before the competition, and they broke through the
lingering suspicion of the activists."
They invited electric-vehicle evangelists such as Paul
Scott to drive the Leaf on Nissan's test track in Yokohama.
Scott, vice president of the activist group Plug In America,
then blogged favorably about the experience.
The company also donated $25,000 to Plug In America, says
Scott, who now sells Leafs at Santa Monica Nissan.
"We're not bought off," he says. "What won us over is
the fact that they're making this EV."
'Bandleaders,' 'Cat Herders'
As Woodard and Perry met more people, they categorized
their local partners into personality types such as
"bandleaders," "trail bosses," "cat herders." What they
had in common, Woodard says, was that "they know everybody. And
when they invite people to meetings, the people come."
Not long ago, Woodard counted up the business cards she had
collected from stakeholder meetings: 1,400 people in 307 cities
in 27 states.
"It's a very hands-on, personal thing," she says. "And
we surprised them, because this time, unlike regular lobbying,
the ask isn't for the company. The ask is for the customer: Give
the EV buyer incentives. Set up EV charging systems. Streamline
the permitting process for home chargers."
There were plenty of cities where the local leaders looked
at Woodard and Perry as if they each had six heads, yet mostly
there was enthusiasm, even impatience. Perry came across a local
news article announcing that the Oregon-based utility Portland
General Electric Co. was installing 100 charging stations, and
Nissan hadn't even visited Portland yet.
'Getting Ready'
"What are they doing?" he asked Woodard. "There's
nothing to charge."
"They're getting ready for us," Woodard replied.
While traveling the country, she and Perry began to hear
footsteps.
"We almost thought there was a bug in our luggage, because
after we'd leave a town, there'd be another visitor coming right
behind," Woodard says.
Usually it was Britta Gross, GM's director of global energy
systems and infrastructure commercialization, paving the way for
the Volt. Sometimes it was an executive from Ford, Mitsubishi
Motors Corp. or Toyota.
"That was fine, because we were saying about 80 percent
the same things," Woodard says. "Leaf is more dependent on
electric charging than Volt, but we were all talking about
infrastructure, planning, permits and charging installation. It
gives credibility and scale. It helps if cities know there's a
lot of interest."
Getting a Charger
Charging an electric car with a standard 120-volt outlet
can take as long as 18 hours. You need six to eight hours to
charge one with a more powerful 240-volt outlet. Buying a
station today means contacting a utility to see if the
neighborhood transformer can handle the load, getting a
contractor to install a 240-volt charger in your garage and
having the city inspect it.
It can cost anywhere from a few hundred dollars to $3,000
and take a month or two, says Ed Kjaer, director of plug-in
vehicle readiness for Southern California Edison Co., a
Rosemead, California-based utility that has had electric cars in
its fleet since 1998.
Nissan, and to a lesser extent GM, needed to make the
process easier for both customers and utilities. So Nissan hired
a contractor, Monrovia, California-based AeroVironment Inc., to
help Leaf buyers with the installation process. Woodard and
Perry also made deals with local utilities, agreeing to let
those companies know, with customers' permission, if Nissan sold
a Leaf in their territory.
'Two Hair Dryers'
As Woodard and Perry discovered, "there are 3,000
utilities in the U.S., with 3,000 stories," Perry says. "So
this is a regional issue. In Houston, with massive homes and AC
loads, adding an EV is no big deal. A San Francisco row house
will have a much smaller load."
An electric vehicle charging at 240 volts draws 3,300 watts
of power. A hair dryer may draw 1,600.
"So we're two hair dryers," Perry says. "If that will
cause a neighborhood transformer to blow, you've got bigger
problems than EVs. To Portland General Electric, we were like
three plasma TVs. To NRG in Houston, we were a mosquito. Our
message was, 'We're coming, and we don't want to be your pain
point, but you need to get ready.'"
Soon they were giving presentations at utility conferences,
places where car companies had never showed up before. And
before long Southern California Edison was setting up a booth at
the Los Angeles auto show.
Becoming 'an Appliance'
"We'd been speaking two different languages, but gradually
we learned to communicate," Perry says. "The breakthrough came
when they started calling us 'an appliance.' As car guys, we
freaked over that. But it meant we were accepted."
Part of what makes the emerging electric-vehicle economy so
intriguing is the large number of unknowns. How will drivers of
them choose to charge their vehicles? The best guess of industry
executives is that 80 percent of charging will take place at
home. Public chargers may be no more than a security blanket,
yet retailers already are lining up to offer them.
In Tennessee, restaurant operator Cracker Barrel Old
Country Store Inc. announced on Nov. 30 that it would install
chargers at 24 of its interstate locations, part of an intercity
network that will link Nashville, Chattanooga and Knoxville. The
company called it a return to its roots: When the first Cracker
Barrel opened in 1969, it sold both food and gas.
Unanswered Questions
No one yet knows how Cracker Barrel or other retailers will
generate revenue from these charges. They can't sell electricity
directly to customers -- in most states, only utilities and
merchant generators can do that -- though they could charge for
a half-hour in the parking space next to the charger.
There are other open questions. Will customers happily pay
for flat-fee, unlimited-use charging plans such as the one NRG
Energy Inc. is rolling out in Houston? Or will they prefer to
buy their charges a la carte, for a service fee similar to the
one at an ATM? Will higher prices stop "opportunity chargers"
who top up their vehicles after work, even if they don't really
need the charge to get home? Or will people pay any price
because they want the peace of mind an afternoon charge can
bring? What does that market look like? Is it different by hour
of the day, by demographics? Nobody knows.
Green Debate
Inside the green-car community -- the world of academics,
analysts, policy makers and environmentalists who spend their
days worrying about transportation emissions -- there's also a
lively debate about which kind of low-emissions car is greenest.
The Leaf produces zero emissions, and according to numerous
studies touted by Nissan, even if the electricity that powers it
comes from a coal-fired plant, its carbon footprint is smaller
than that of an average gasoline-powered car. If its electricity
comes from solar, wind, hydro or nuclear power, then the Leaf is
an unassailably zero-emission vehicle. And Nissan executives
point out that U.S. electric generation is getting cleaner.
A GM Volt's true emissions are harder to determine, because
it can be driven in all-electric mode or with a gasoline assist.
For now, the heavy batteries that store the power in Leafs
and Volts are still too expensive to be the most cost-effective
option, according to a 2009 study by engineers at Carnegie
Mellon University in Pittsburgh. The study also found that plug-
in vehicles with 40 or more miles of all-electric range "do not
offer the lowest lifetime cost in any scenario, although they
could minimize greenhouse gas emissions."
Best Mix
Lighter plug-in hybrids with about 10 miles of all-electric
range appear to offer the best mix of price, charging time and
efficiency, according to Jeremy Michalek, the Carnegie Mellon
mechanical engineering professor who led the study. Plug-ins of
this sort -- the Prius, due in 2012, will be one -- work best
for urban drivers who can charge every 20 miles or so, he says.
All of these plug-in cars are far cleaner and cheaper to
operate than what most Americans drive now.
In August 2009, Ghosn unveiled the Leaf at a ceremony
dedicating Nissan's new headquarters in Yokohama. That same
month, Nissan opened a Leaf website and asked visitors to
register if they wanted to learn more.
Within a year they had 175,000 "hand-raisers" without
running a single television spot for the car. The number has
since risen to more than 250,000. It didn't cost a cent to
register, and rivals downplay the hand-raisers' significance.
Nissan says it has used them to bring some 50,000 people to Leaf
test-drives around the country and for surveys and focus groups.
Taking Reservations
On April 20 of this year, a month after the company
announced pricing for the vehicle, it invited the hand-raisers
to make an online "reservation" by putting down a refundable
$99 fee. Nissan got 6,000 reservations in the first 24 hours and
20,000 within five months, three months ahead of schedule. Now
that the company is inviting small groups of those who reserved
to contact a dealer and order a Leaf, about half of them are
actually ordering a car. The ones who don't order now can still
do it when and if they are ready.
Complexity and cost have alienated at least one prospective
Leaf buyer. Kenneth Shiels, a 64-year-old retired teacher in El
Granada, California, put down a $99 deposit for a Leaf on
April 20. He owns a Prius and a 2000 Honda Insight, the first
hybrid on the U.S. market, and was dying to get into an electric
vehicle.
Balking at Costs
Nissan contacted him in August, inviting him to pay $100 to
AeroVironment in exchange for an inspection of his electrical
wiring and an estimate of the charger's installation cost.
Shiels didn't go for it. He guesstimated that the installation
would set him back about $2,400. He added that to the $3,190 in
sales tax he would pay on the $33,720 Leaf LS, and figured he
was spending close to $40,000 before the federal government's
$7,500 tax credit and California's $5,000 rebate brought the
price back down.
"I'm losing interest," he says. "I was excited, but I
think I'll pull out of this. I felt like the initial price I saw
in April was a come-on, and then it went sky-high."
Nissan says it's delighted by consumer demand for the car,
demand so strong it can't make enough Leafs until 2012. There
are no demos to be found at Nissan dealers; every Leaf made is
going to paying customers, because Nissan believes word of mouth
will be the most powerful seller.
Waiting for Delivery
Customers allowed to order a Leaf can expect to wait four
to seven months for it to be built to specifications. More than
2,500 Americans have now bought the car and will take delivery
in coming months. Additional waves of U.S. buyers will be
invited to order cars until some 20,000 have been sold by the
end of 2011. If you get to order one in the spring, you'll see a
Leaf in your driveway by the fall.
Few doubt that in the next year or two Nissan will be able
to sell the 50,000 Leafs it can produce globally. As production
ramps up to 10 times that, Nissan will need to draw customers
from beyond the circle of green enthusiasts. If gasoline prices
rise and the Leaf proves to be reliable and delivers its
promised range at a fraction of the cost of gasoline-powered
cars, Nissan might just pull it off.
When mainstream pragmatists test the waters, they may be
tempted to do so with a vehicle that uses a conventional
gasoline-powered engine to augment its electric range. They may
opt for a plug-in Prius. GM thinks they'll choose the Volt.
Nissan is happy that so much of the electric-vehicle
conversation now revolves around their company.
"We want people to be talking about Nissan as the brand
that brought this car to the masses," says Carolin, the
company's marketing boss. "The big prize for me is not how many
Leafs I sell. It is, 'How can I use the Leaf to build and
improve the Nissan brand?' I've worked for the company for many
years, and we've never had a single point of focus. The lack of
focus of this brand has been an issue globally. The gift of the
Leaf is that it gives precision to what we stand for. Now we
have a message. We stand for innovation."
For Related News and Information:
Nissan earnings data: 7201 JP <Equity> CH1 <GO>
GM and alternative energy: GM US <Equity> TCNI ALTNRG <GO>
U.S. gasoline price graph: 3AGSREG <Index> GP D <GO>
Autos and climate change: TNI AUT CLIMATE <GO>
--With assistance from Alan Ohnsman in Los Angeles. Editors:
Josh Tyrangiel, Bryant Urstadt, John Lear
To contact the reporters on this story:
Eric Pooley in New York at +1-212-318-2000 or
epooley2@bloomberg.net;
David Welch in Southfield, Michigan, at +1-248=827-7131 or
dwelch12@bloomberg.net
To contact the editor responsible for this story:
Josh Tyrangiel at +1-212-617-3331 or jtyrangiel@bloomberg.net
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Nissan Leads Charge as Automakers Test U.S. Electric-Car Market
2010-12-29 22:00:00.7 GMT
By Eric Pooley and David Welch
Dec. 30 (Bloomberg) -- Most of the drivers on U.S. Route
101 in Marin County, California, on a foggy December morning are
oblivious to the black snub-nosed car gliding along beside them.
Every so often, someone does a double take, gives a thumbs
up or snaps a cell-phone picture, because the car in the next
lane is one they've never seen before: Nissan Motor Co.'s Leaf,
the world's first affordable, mass-produced electric vehicle.
This particular Leaf happens to be No. 1, the first sold
anywhere. At the wheel is Olivier Chalouhi, who took delivery an
hour earlier amid some impressive hoopla at a Nissan dealership
in Petaluma. Now, driving south to San Francisco with Nissan
Americas Chairman Carlos Tavares riding shotgun, Chalouhi, a
31-year-old Web entrepreneur, is explaining how he came to be
the first person to buy this car.
His voice is soft but easy to hear from the back seat,
Bloomberg Businessweek reports in its Jan. 3 issue. With no
internal-combustion engine, the Leaf, which sells for about
$25,000 after a $7,500 federal tax credit, is eerily quiet,
almost as cocoonlike as Nissan's $50,000-plus Infiniti M.
"It all started when I saw an ad for the Chevy Volt,"
Chalouhi says.
General Motors Co.'s Volt, which started shipping to
dealers in mid-December, is the Leaf's chief competitor
in the green-car sweepstakes. It runs for about 40 miles
(64 kilometers) on an electric charge before a small gasoline
engine kicks in to recharge the battery.
'No Tailpipe'
That gives the Volt more than 350 miles of range, unlike
the Leaf, which runs for 60 to 100 miles, varying with weather
and terrain and driving style, before needing a recharge that
can take 30 minutes to 7 hours, depending on the strength of the
charger. The Volt's gasoline engine makes it less attractive to
some eco-minded consumers such as Chalouhi.
"In all the articles I read about the Volt, the Leaf was
discussed as well," he says. "As soon as I found out about the
Leaf, I forgot about the Volt. The Volt wasn't going to project
the image I wanted. It has a tailpipe."
"The Volt is a hybrid, a very nice hybrid," Tavares, 52,
says from the passenger seat. "But we see it as a transitional
vehicle and we were always of the opinion that we were providing
the ultimate destination: 100 percent clean. No emissions. No
gasoline. No tailpipe."
The energy chain is more complicated than that. The
electricity powering a Leaf may or may not come from low-
emission sources.
Plenty of Pep
Right now, it's time to enjoy the ride. Chalouhi turns off
the highway and guns the car up a steep, winding road in the
Marin Headlands overlooking San Francisco Bay. The Leaf is
surprisingly agile and sure-footed. Its electric motor has
plenty of pep, and 600 pounds (270 kilograms) of laminated
lithium-ion batteries below the floorboards help it hug the
road.
Chalouhi is having fun with the tight turns heading into
the hills, where Nissan has stationed a media team to capture
the moment with some suitably dramatic images. Alas, the Golden
Gate Bridge is hiding behind the fog, making the glamour shot
impossible, so Chalouhi guides the car back down toward 101
while a product manager, Paul Hawson, briefs him on the next
photo op, at City Hall in San Francisco.
"At the end of the ceremony, you and Mr. Tavares will go
to the car and plug in the charger together," Hawson says.
Chalouhi looks worried and says, "So I'm not going to be
charging for long?"
"A short amount of time, yes," Hawson says.
'Range Anxiety'
Chalouhi lives 35 miles to the south in Redwood City; the
Leaf's sophisticated navigation screen is telling him he has
37 miles left before his battery runs out of juice. The owner of
the first mass-produced electric vehicle, in other words, is
experiencing his first twinge of what marketers at Detroit-based
GM have helpfully named "range anxiety."
"So I won't get much charge at City Hall?" Chalouhi says.
"You'll get some," Hawson assures him. "You'll get home.
We'll make sure you get home."
The psychology of the U.S. car buyer is the biggest
roadblock Nissan must get past for the Leaf to become the hit
that the company promises it will be. Carlos Ghosn, chief
executive officer of Yokohama, Japan-based Nissan, likes to
point out that 95 percent of drivers travel fewer than 100 miles
a day, making the Leaf practical for most.
'Risk Aversion'
Yet practicality doesn't always translate into peace of
mind. A recent study by Synovate Motoresearch, a unit of London-
based Aegis Group Plc, showed that 60 percent of 1,600 U.S.
consumers surveyed think their gasoline-powered cars are
reliable. Only 30 percent of those surveyed think hybrid-
electric cars are reliable, even after a decade of virtually
trouble-free performance, and just 10 percent think electric
cars will be trouble-free.
"The main thing holding back electric vehicles is the
customer," says John German, a former strategic planner for
Honda Motor Co. who is now a program director for the
International Council on Clean Transportation, a Washington-
based advocacy and research group. "It's risk aversion."
Nissan and GM missed the decade-long trend toward gasoline-
electric hybrid vehicles. Toyota Motor Corp.'s Prius car
dominates that segment, which still accounts for less than
3 percent of all vehicles sold in the U.S.
When Ghosn joined Nissan as chief operating officer in
1999, the company was flirting with bankruptcy. As CEO starting
in 2001, he slashed 60 percent of its research and development
projects while keeping the battery program that led to the Leaf.
R&D Spending
In 2005 he also became CEO of Renault SA, which owns
about 44 percent of Nissan, while Nissan holds 15 percent of the
French automaker. The Renault-Nissan alliance has now spent more
than 4 billion euros ($5.3 billion) developing electric vehicles
and batteries, according to the company.
Both Nissan and GM began work on their new electric
vehicles in 2006, when the rest of the auto industry had more or
less given up on such cars after a brief foray in the late 1990s
and early 2000s.
When Nissan announced its project that year, "nobody took
us seriously," Ghosn, 56, says in a telephone interview. "We
had many very ironic comments coming from our competitors about
the illusion of the electric car."
The sniping never stopped. Former GM Vice Chairman Bob
Lutz, who helped develop the Volt, told Bloomberg News in
January that all-electric vehicles were still years away from
widespread adoption.
"He's rolling the dice," Lutz said of Ghosn's battery-
only approach. "I don't see it happening."
Earlier Fiasco
Until a battery emerged with better range at less cost, the
industry decided, all-electric vehicles were too limited for the
mainstream. Some investors still seem to agree. Electric-car
maker Tesla Motors Inc.'s shares dropped 15 percent on Dec. 27,
after insiders' lockup period expired.
Everyone remembered the fiasco of the abortive electric-
vehicle era, from 1996 to 2003, when California required GM and
other carmakers to offer such models. The cars were too
expensive to be profitable, so the automakers succeeded in
overturning the state mandate, then scrapped the program.
In GM's case, the company crushed many of the cars, called
EV-1s, a public-relations nightmare captured in the 2006
documentary "Who Killed the Electric Car?"
Now, "everybody is competing for the electric-car
market," Ghosn says. "People who don't really have an electric
car are saying, 'We have one, too.' Even the hybrids want to
look electric, which was not obvious four or five years ago. My
call was the right one. It doesn't always work out that way, so
you're happy when you're vindicated."
Government Pressure
His declaration of victory may be a little premature. For
one thing, major automakers no longer have a choice about going
electric. They have to, largely because of government mandates.
California law requires the largest automakers to have low- or
no-emissions cars in their fleets by 2012. The new fuel-economy
standards of U.S President Barack Obama's administration raise
fleet-average requirements to 35.5 miles per gallon by 2016, a
40 percent improvement over current levels. Such rules make
having a zero-emissions vehicle a smart way to balance out the
gas guzzlers.
More than a dozen electric and plug-in hybrids are slated
to go on sale in the next two years, and entries from carmakers
such as Ford Motor Co., Honda, Toyota and Mazda Motor Corp. will
be on display at the Detroit auto show, which begins on Jan. 10.
Biggest Bet
Still, Nissan is the only major automaker betting so
heavily on all-electric technology. GM is hedging, with cars
that run on electricity while using a gasoline engine to
recharge.
Honda has put its research and development muscle into
hydrogen fuel-cell technology, which remains prohibitively
expensive. Each Honda FCX Clarity hydrogen vehicle costs the
automaker more than $100,000 to produce, according to K.G.
Duleep, a fuel-cell analyst at Energy & Environmental Analysis
Inc., an Arlington, Virginia-based consulting firm.
Bayerische Motoren Werke AG, Volkswagen AG and Daimler AG's
Mercedes-Benz have focused on ultra-efficient diesel engines.
Toyota's main electric-vehicle offering is an incremental play:
a plug-in Prius that adds about 15 miles of all-electric range
before the hybrid motor takes over.
Market Skeptics
It remains to be seen whether this flood of supply will
meet with sustainable demand. In a report called "Drive Green
2020: More Hope Than Reality," marketing-research firm J.D.
Power & Associates projects that in nine years, battery-electric
models such as the Leaf will have annual sales of only about
100,000 units in the U.S. and 1.3 million globally, or about
1.8 percent of the 71 million vehicles expected to be sold.
Another 3.9 million hybrids and plug-in hybrids will be
sold worldwide in 2020, bringing the total electric and hybrid
market to about 7 percent, the Westlake Village, California-
based firm estimates.
"While most consumers say they want to create a smaller
personal carbon footprint, research shows this consideration
carries relatively low weight in the vehicle purchase
decision," the J.D. Power report says.
Other studies are more bullish. Bloomberg New Energy
Finance projects that plug-in cars such as the Leaf and the Volt
may make up 9 percent of U.S. sales by 2020 and 22 percent by
2030. Yet after 10 years as the world leader in hybrid sales,
Toyota has never sold more than 187,000 Priuses in the U.S. in a
year, about the same number as Hyundai Motor Co.'s Sonata sedan.
Prius sales reached that peak in 2007, just before the financial
crisis began, and have dropped since then as lower fuel prices
have lured Americans back to sport-utility vehicles.
Boosting Production
Now consider Ghosn's projections for the Leaf. Nissan will
produce only about 50,000 this year and next. Then by the end of
2012, three new Leaf plants will be operating -- in Oppama,
Japan; Sunderland, England; and Smyrna, Tennessee -- with a
total capacity of 500,000 cars a year and the ability to
increase to 1 million, just as all those competing electric
vehicles and hybrids from Toyota, Volkswagen's Audi and Ford
will be coming to market.
Ghosn is the first to admit that he's making a huge bet. It
may not be an altogether crazy one.
Tom Turrentine is director of the Plug-in Hybrid Electric
Vehicle Research Center at the University of California, Davis.
An anthropologist by training, Turrentine has joined with major
automakers to conduct a series of detailed studies of Americans
driving electric cars -- not just enthusiasts of such models,
but regular people.
'Having Fun'
As his team observed the driving habits of more than 300
households with vehicles such as electrified BMW Minis, plug-in
Priuses and Nissan Hypermini two-seat electrics during the past
several years, the data told him that such models "were never
going to be 'just like' internal-combustion cars."
"There's something about electric drive, with its quiet
glide and immediately available torque, that drivers really
enjoy," Turrentine says. "Even when they aren't going fast,
people think they are having fun. Engineers at BMW tell me it's
the way the cars accelerate. You don't have clutches and
transmissions, so your accelerator pedal is feeding electricity
directly to the motor, and you feel it accelerate the car.
There's nothing in between you and the tires. Some people fall
in love with that feeling."
For all his confidence, Ghosn understands the immense
challenges to expanding Leaf sales. That's why, for the past
three years, his company has had a team of traveling executives,
called the Zero Emission Mobility Team, meeting with city, state
and utility officials around the U.S. to solve infrastructure
problems such as the permitting process for home chargers and
the need to create a network of high-speed public chargers in
cities and along interstate highways.
'Whole New System'
"We are not the provider of just a car this time," he
says. "We are the provider of a whole new system."
Utilities may welcome the opportunity to sell more
electricity, while they also worry about the load. Several new
electric vehicles suddenly plugged into the same suburban block
could fry a local transformer.
More difficult is installing the needed network of charging
stations, both in the home and in public, to allay range
anxiety; 13,000 public chargers are expected to be in the ground
by the end of 2011. The U.S., by Nissan's count, has 106,000
gasoline stations.
'Pragmatic Majority'
The most important issue has to do with customer education
and acceptance. To appeal to the "pragmatic majority" of
buyers, Nissan needs to sell the cost advantage of ownership:
Year in and year out, electric vehicles cost far less to own and
operate than internal-combustion models -- about 2 cents a mile
to drive, compared with about 13 cents a mile for an average
gasoline-powered car, according to the automaker. They also are
less expensive to maintain.
To buy Leafs in serious numbers, these pragmatic men and
women need to be able to imagine themselves behind the wheel of
an electric vehicle. For the product to be competitive, Nissan
also must keep the price down. Nissan makes its own batteries in
a joint venture with NEC Corp., and they account for roughly
half the cost of the car, making the initial price of an
electric vehicle more than that of comparable gasoline-powered
models.
For now, federal and state tax credits and rebates are
required to make the cars cost-competitive. The Leaf's sticker
price of about $33,000 is $10,000 more than a well-equipped
Honda Civic, for example. With the $7,500 federal tax credit,
along with rebates and tax credits available in 16 states, such
as a $5,000 price break in California and a $4,500 rebate in
Hawaii, the electric vehicle becomes competitive.
Economies of Scale
Assuming the new Congress doesn't roll it back, that
federal tax credit is available to the first 200,000 electric-
vehicle customers of each automaker. When it runs out, Nissan
expects to be selling so many Leafs that economies of scale will
bring costs down. Ghosn says the company needs to sell between
500,000 and 1 million Leafs a year to enjoy those economies.
"Then we'll be able to compete without any government
subsidies," he says. "Our battery costs are already coming
way, way down. Everybody in the business has estimates, but
nobody really knows everything we're up to. The Leaf is going to
be one of the most profitable products Nissan has ever made."
While Ghosn was planning the Leaf in 2006, Lutz and Jon
Lauckner, GM's vice chairman and director of product planning at
the time, were also trying to dream up an electric car that
would leapfrog the Prius. Like Nissan, GM was after some much-
needed public acclaim and green credibility. The company had
been derided for shutting down its EV-1 and crushing the cars,
and Lutz thought a pure electric vehicle that used no gasoline
would be a public-relations coup.
'Game-Changing Concept'
Lauckner, now president of General Motors Ventures LLC, the
automaker's technology venture-capital group, studied U.S.
driving habits just as Ghosn and Tavares were doing at Nissan.
Where Nissan focused on the fewer than 100 miles a day traveled
by 95 percent of drivers, Lauckner lingered over another set of
numbers: 78 percent drive fewer than 40 miles a day.
He figured a car equipped with enough battery power to go
that far, plus a gasoline engine to recharge it on the fly,
"would be a game-changing concept that would address the
shortfalls of electric vehicles on one side and go beyond the
top hybrids on the other. We wanted this to be someone's first
car, not their second or third commuter car."
Forget About Gasoline
Lauckner showed Lutz a schematic for the Chevy Volt, a car
that would allow many drivers to forget about gasoline unless
they were taking a special trip. Someone with a 30-mile commute
would get roughly 150 miles per gallon, and the car would travel
well over 300 miles on a tank of gas.
The U.S. Environmental Protection Agency, using a new
metric designed to compare different fuel types, now estimates
the Volt's average fuel economy at 93 "mpg equivalent" in
electric mode, 37 in gas-only. The Leaf's mpg equivalent is 99.
Later that summer, Lutz and Lauckner took the proposal to
then-CEO Rick Wagoner, who had killed GM's EV-1 after $1 billion
in investments because he was convinced consumers didn't want
it. Wagoner bought into the idea.
Once Wagoner and GM's board approved, engineers had to
build the thing. Getting beyond the early adopters and selling
to the public meant GM needed to offer more than just fuel
economy, especially since the Volt was going to list at more
than $40,000 before tax credits.
History Books
The car had to be upscale without being a luxury vehicle,
says Tony Posawatz, the Volt's vehicle line director. In his
small office at GM's Vehicle Engineering Center in suburban
Detroit, Posawatz pulls out books on the history of electric
vehicles, which date back to 1881 and outsold gasoline-powered
cars in the early days. Henry Ford's wife drove one.
Posawatz points to a 1910 ad for the Baker Electric.
Beneath a drawing of a woman at the wheel, the ad copy boasts of
the "quietest and most refined electric car." Back then, he
says, electric-car makers such as Baker, Detroit Electric and
Waverly Electric targeted women, who wouldn't have to crank a
starter or tolerate the noise and soot of gasoline-powered cars.
No one has to crank a car anymore, while electric cars are
still quiet and clean. That meant that even if the Volt wasn't
going to be a luxury car, it could be premium in many ways. A
near-silent ride would be a selling point. Like Nissan's
engineers, Posawatz knew that when you get rid of a car's
exhaust note, the vehicle is so quiet that passengers get a
bigger dose of road and wind noise.
Smoothing Ride
In conventional cars, "the gasoline engine masks a lot of
your sins," Posawatz says. The engineers worked to tighten the
gaps between doors and body panels to reduce wind noise, then
packed the car with sound-deadening material to hide the growl
of the gasoline engine when it's running. GM also engineered a
body that is stiffer than most luxury cars to give it a smoother
ride and more precise handling, something the hybrids on the
market traditionally do not offer.
With 80 percent high-strength steel and a buttoned-up body,
the Volt is as stiff as most luxury sports cars, built to handle
hairpin turns. It drives as well or better than a Leaf. One
thing is certain: Neither will ever be mistaken for a golf cart.
In the spring of 2008, more than 2 1/2 years before the
Leaf would go on sale and a year before Ghosn showed it off in
public for the first time, Nissan gathered executives from
governmental affairs, product planning, communications, sales
and marketing to create its Zero Emission Mobility Team.
Spreading Message
The team had a huge job: prepare America for the electric
vehicle by creating Leaf-friendly policies in states with
progressive environmental agendas. That meant joining with local
officials and utilities to encourage tax incentives, and
streamlining the permitting and installation process for home
chargers while building a network of public charging stations
and educating drivers about the advantages of electric vehicles.
Doing all of that meant the carmaker would have to
establish relationships with a range of players it hadn't dealt
with before. And it meant Nissan would have to insert itself,
for the first time, between its dealers and their customers.
"We've never had to organize anything like this," says
Brian Carolin, Nissan's senior vice president for sales and
marketing in North America. "I know how to sell cars, and after
26 years with this company, I like to think I understand
American psychology. But this is the most interesting and
demanding car launch I've ever been involved with. I have a
portfolio of 17 Nissan nameplates, half a dozen Infinitis and
one Leaf. I spend a wildly disproportionate amount of my time on
the Leaf."
Choosing Markets
Mobility Team executives Tracy Woodard, from government
affairs, and Mark Perry, from product development, toured the
country together meeting with activists and officials, figuring
out which markets to sell into first. They sorted potential
markets according to three main criteria.
First, they looked for places that had electric-vehicle
incentives left over from the late 1990s and early 2000s. Then
they pored over maps showing the density of hybrid customers --
of the early Leaf buyers, 80 percent have never owned a Nissan
before and almost half have owned Priuses. Third, they focused
on states where the local utilities were comfortable with the
idea and willing to upgrade their grids if needed.
They came up with a Wave One map that included Washington,
Oregon, California, Arizona, Tennessee, Texas and Hawaii. Wave
Two will follow in the late summer and early fall of 2011,
continuing around the Sun Belt and then up the East Coast. By
limiting early sales to just seven states, Nissan can help
achieve a critical mass of charging stations.
Of the 13,000 stations expected nationwide by the end of
2011, almost half will be on the West Coast. Limiting the market
also means Nissan will have to train, initially, only 163 of its
1,000 U.S. dealers to sell and service the car.
Meeting With Stakeholders
In the summer of 2008, Woodard, 45, and Perry, 53, began
reaching out to "conveners," influential local officials and
activists who could bring together groups of stakeholders. In
the fall, they held their first major meeting in San Francisco,
organized by Jack P. Broadbent, CEO of the Bay Area Air Quality
Management District.
"Nissan did this right," Broadbent says. "They got here
six months before the competition, and they broke through the
lingering suspicion of the activists."
They invited electric-vehicle evangelists such as Paul
Scott to drive the Leaf on Nissan's test track in Yokohama.
Scott, vice president of the activist group Plug In America,
then blogged favorably about the experience.
The company also donated $25,000 to Plug In America, says
Scott, who now sells Leafs at Santa Monica Nissan.
"We're not bought off," he says. "What won us over is
the fact that they're making this EV."
'Bandleaders,' 'Cat Herders'
As Woodard and Perry met more people, they categorized
their local partners into personality types such as
"bandleaders," "trail bosses," "cat herders." What they
had in common, Woodard says, was that "they know everybody. And
when they invite people to meetings, the people come."
Not long ago, Woodard counted up the business cards she had
collected from stakeholder meetings: 1,400 people in 307 cities
in 27 states.
"It's a very hands-on, personal thing," she says. "And
we surprised them, because this time, unlike regular lobbying,
the ask isn't for the company. The ask is for the customer: Give
the EV buyer incentives. Set up EV charging systems. Streamline
the permitting process for home chargers."
There were plenty of cities where the local leaders looked
at Woodard and Perry as if they each had six heads, yet mostly
there was enthusiasm, even impatience. Perry came across a local
news article announcing that the Oregon-based utility Portland
General Electric Co. was installing 100 charging stations, and
Nissan hadn't even visited Portland yet.
'Getting Ready'
"What are they doing?" he asked Woodard. "There's
nothing to charge."
"They're getting ready for us," Woodard replied.
While traveling the country, she and Perry began to hear
footsteps.
"We almost thought there was a bug in our luggage, because
after we'd leave a town, there'd be another visitor coming right
behind," Woodard says.
Usually it was Britta Gross, GM's director of global energy
systems and infrastructure commercialization, paving the way for
the Volt. Sometimes it was an executive from Ford, Mitsubishi
Motors Corp. or Toyota.
"That was fine, because we were saying about 80 percent
the same things," Woodard says. "Leaf is more dependent on
electric charging than Volt, but we were all talking about
infrastructure, planning, permits and charging installation. It
gives credibility and scale. It helps if cities know there's a
lot of interest."
Getting a Charger
Charging an electric car with a standard 120-volt outlet
can take as long as 18 hours. You need six to eight hours to
charge one with a more powerful 240-volt outlet. Buying a
station today means contacting a utility to see if the
neighborhood transformer can handle the load, getting a
contractor to install a 240-volt charger in your garage and
having the city inspect it.
It can cost anywhere from a few hundred dollars to $3,000
and take a month or two, says Ed Kjaer, director of plug-in
vehicle readiness for Southern California Edison Co., a
Rosemead, California-based utility that has had electric cars in
its fleet since 1998.
Nissan, and to a lesser extent GM, needed to make the
process easier for both customers and utilities. So Nissan hired
a contractor, Monrovia, California-based AeroVironment Inc., to
help Leaf buyers with the installation process. Woodard and
Perry also made deals with local utilities, agreeing to let
those companies know, with customers' permission, if Nissan sold
a Leaf in their territory.
'Two Hair Dryers'
As Woodard and Perry discovered, "there are 3,000
utilities in the U.S., with 3,000 stories," Perry says. "So
this is a regional issue. In Houston, with massive homes and AC
loads, adding an EV is no big deal. A San Francisco row house
will have a much smaller load."
An electric vehicle charging at 240 volts draws 3,300 watts
of power. A hair dryer may draw 1,600.
"So we're two hair dryers," Perry says. "If that will
cause a neighborhood transformer to blow, you've got bigger
problems than EVs. To Portland General Electric, we were like
three plasma TVs. To NRG in Houston, we were a mosquito. Our
message was, 'We're coming, and we don't want to be your pain
point, but you need to get ready.'"
Soon they were giving presentations at utility conferences,
places where car companies had never showed up before. And
before long Southern California Edison was setting up a booth at
the Los Angeles auto show.
Becoming 'an Appliance'
"We'd been speaking two different languages, but gradually
we learned to communicate," Perry says. "The breakthrough came
when they started calling us 'an appliance.' As car guys, we
freaked over that. But it meant we were accepted."
Part of what makes the emerging electric-vehicle economy so
intriguing is the large number of unknowns. How will drivers of
them choose to charge their vehicles? The best guess of industry
executives is that 80 percent of charging will take place at
home. Public chargers may be no more than a security blanket,
yet retailers already are lining up to offer them.
In Tennessee, restaurant operator Cracker Barrel Old
Country Store Inc. announced on Nov. 30 that it would install
chargers at 24 of its interstate locations, part of an intercity
network that will link Nashville, Chattanooga and Knoxville. The
company called it a return to its roots: When the first Cracker
Barrel opened in 1969, it sold both food and gas.
Unanswered Questions
No one yet knows how Cracker Barrel or other retailers will
generate revenue from these charges. They can't sell electricity
directly to customers -- in most states, only utilities and
merchant generators can do that -- though they could charge for
a half-hour in the parking space next to the charger.
There are other open questions. Will customers happily pay
for flat-fee, unlimited-use charging plans such as the one NRG
Energy Inc. is rolling out in Houston? Or will they prefer to
buy their charges a la carte, for a service fee similar to the
one at an ATM? Will higher prices stop "opportunity chargers"
who top up their vehicles after work, even if they don't really
need the charge to get home? Or will people pay any price
because they want the peace of mind an afternoon charge can
bring? What does that market look like? Is it different by hour
of the day, by demographics? Nobody knows.
Green Debate
Inside the green-car community -- the world of academics,
analysts, policy makers and environmentalists who spend their
days worrying about transportation emissions -- there's also a
lively debate about which kind of low-emissions car is greenest.
The Leaf produces zero emissions, and according to numerous
studies touted by Nissan, even if the electricity that powers it
comes from a coal-fired plant, its carbon footprint is smaller
than that of an average gasoline-powered car. If its electricity
comes from solar, wind, hydro or nuclear power, then the Leaf is
an unassailably zero-emission vehicle. And Nissan executives
point out that U.S. electric generation is getting cleaner.
A GM Volt's true emissions are harder to determine, because
it can be driven in all-electric mode or with a gasoline assist.
For now, the heavy batteries that store the power in Leafs
and Volts are still too expensive to be the most cost-effective
option, according to a 2009 study by engineers at Carnegie
Mellon University in Pittsburgh. The study also found that plug-
in vehicles with 40 or more miles of all-electric range "do not
offer the lowest lifetime cost in any scenario, although they
could minimize greenhouse gas emissions."
Best Mix
Lighter plug-in hybrids with about 10 miles of all-electric
range appear to offer the best mix of price, charging time and
efficiency, according to Jeremy Michalek, the Carnegie Mellon
mechanical engineering professor who led the study. Plug-ins of
this sort -- the Prius, due in 2012, will be one -- work best
for urban drivers who can charge every 20 miles or so, he says.
All of these plug-in cars are far cleaner and cheaper to
operate than what most Americans drive now.
In August 2009, Ghosn unveiled the Leaf at a ceremony
dedicating Nissan's new headquarters in Yokohama. That same
month, Nissan opened a Leaf website and asked visitors to
register if they wanted to learn more.
Within a year they had 175,000 "hand-raisers" without
running a single television spot for the car. The number has
since risen to more than 250,000. It didn't cost a cent to
register, and rivals downplay the hand-raisers' significance.
Nissan says it has used them to bring some 50,000 people to Leaf
test-drives around the country and for surveys and focus groups.
Taking Reservations
On April 20 of this year, a month after the company
announced pricing for the vehicle, it invited the hand-raisers
to make an online "reservation" by putting down a refundable
$99 fee. Nissan got 6,000 reservations in the first 24 hours and
20,000 within five months, three months ahead of schedule. Now
that the company is inviting small groups of those who reserved
to contact a dealer and order a Leaf, about half of them are
actually ordering a car. The ones who don't order now can still
do it when and if they are ready.
Complexity and cost have alienated at least one prospective
Leaf buyer. Kenneth Shiels, a 64-year-old retired teacher in El
Granada, California, put down a $99 deposit for a Leaf on
April 20. He owns a Prius and a 2000 Honda Insight, the first
hybrid on the U.S. market, and was dying to get into an electric
vehicle.
Balking at Costs
Nissan contacted him in August, inviting him to pay $100 to
AeroVironment in exchange for an inspection of his electrical
wiring and an estimate of the charger's installation cost.
Shiels didn't go for it. He guesstimated that the installation
would set him back about $2,400. He added that to the $3,190 in
sales tax he would pay on the $33,720 Leaf LS, and figured he
was spending close to $40,000 before the federal government's
$7,500 tax credit and California's $5,000 rebate brought the
price back down.
"I'm losing interest," he says. "I was excited, but I
think I'll pull out of this. I felt like the initial price I saw
in April was a come-on, and then it went sky-high."
Nissan says it's delighted by consumer demand for the car,
demand so strong it can't make enough Leafs until 2012. There
are no demos to be found at Nissan dealers; every Leaf made is
going to paying customers, because Nissan believes word of mouth
will be the most powerful seller.
Waiting for Delivery
Customers allowed to order a Leaf can expect to wait four
to seven months for it to be built to specifications. More than
2,500 Americans have now bought the car and will take delivery
in coming months. Additional waves of U.S. buyers will be
invited to order cars until some 20,000 have been sold by the
end of 2011. If you get to order one in the spring, you'll see a
Leaf in your driveway by the fall.
Few doubt that in the next year or two Nissan will be able
to sell the 50,000 Leafs it can produce globally. As production
ramps up to 10 times that, Nissan will need to draw customers
from beyond the circle of green enthusiasts. If gasoline prices
rise and the Leaf proves to be reliable and delivers its
promised range at a fraction of the cost of gasoline-powered
cars, Nissan might just pull it off.
When mainstream pragmatists test the waters, they may be
tempted to do so with a vehicle that uses a conventional
gasoline-powered engine to augment its electric range. They may
opt for a plug-in Prius. GM thinks they'll choose the Volt.
Nissan is happy that so much of the electric-vehicle
conversation now revolves around their company.
"We want people to be talking about Nissan as the brand
that brought this car to the masses," says Carolin, the
company's marketing boss. "The big prize for me is not how many
Leafs I sell. It is, 'How can I use the Leaf to build and
improve the Nissan brand?' I've worked for the company for many
years, and we've never had a single point of focus. The lack of
focus of this brand has been an issue globally. The gift of the
Leaf is that it gives precision to what we stand for. Now we
have a message. We stand for innovation."
For Related News and Information:
Nissan earnings data: 7201 JP <Equity> CH1 <GO>
GM and alternative energy: GM US <Equity> TCNI ALTNRG <GO>
U.S. gasoline price graph: 3AGSREG <Index> GP D <GO>
Autos and climate change: TNI AUT CLIMATE <GO>
--With assistance from Alan Ohnsman in Los Angeles. Editors:
Josh Tyrangiel, Bryant Urstadt, John Lear
To contact the reporters on this story:
Eric Pooley in New York at +1-212-318-2000 or
epooley2@bloomberg.net;
David Welch in Southfield, Michigan, at +1-248=827-7131 or
dwelch12@bloomberg.net
To contact the editor responsible for this story:
Josh Tyrangiel at +1-212-617-3331 or jtyrangiel@bloomberg.net
Fwd: China Manufacturing Grows at Slower Pace, PMI Shows (Update2)
China -- serious about climate protection
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China Manufacturing Grows at Slower Pace, PMI Shows (Update2)
2010-12-30 04:17:13.596 GMT
(Adds economist's comment in fourth paragraph.)
By Bloomberg News
Dec. 30 (Bloomberg) -- China's manufacturing growth
slowed for the first time in five months in December as the
government tightened monetary policy and chased energy-
efficiency and pollution targets, a survey indicated.
A purchasing managers' index released today by HSBC
Holdings Plc and Markit Economics fell to 54.4 from 55.3 in
November. The data are seasonally adjusted and a reading
above 50 indicates an expansion.
Rising corporate profits and expansions by companies
including Aluminum Corp of China Ltd. and Volkswagen AG may
help to sustain manufacturing as the government curbs lending
to counter inflation. Morgan Stanley and JPMorgan Chase & Co.
forecast interest rates will rise at least twice in the first
half of 2011 after an increase on Christmas Day that was the
second since the global financial crisis.
"Inflation rather than growth still remains as the top
policy concern, despite the moderation in December's
manufacturing PMI reading," said Qu Hongbin, Hong Kong-based
China economist for HSBC. "Modest" interest-rate increases
are needed to anchor inflation expectations in coming months,
Qu said.
The Shanghai Composite Index fell 0.4 percent as of the
11:30 a.m. local time break in trading. The yuan touched
6.6142 per dollar, the strongest since 1993.
Switch From Contraction
While today's PMI reading was the weakest in three
months, it compares with a contraction as recently as July.
For the fourth quarter as a whole, the index had the
strongest performance since the first three months of this
year, HSBC said in a statement.
The measure is based on a survey of executives at more
than 430 companies and gives an indication of activity in the
manufacturing sector. A separate government-backed PMI is due
Jan. 1.
Higher interest rates, a crackdown on real-estate
speculation, and closures of energy-wasting and highly
polluting factories are among measures by Premier Wen
Jiabao's government that may cool growth. Officials have also
boosted reserve requirements for lenders six times this year
to counter inflation and limit asset bubbles in the real-
estate market.
Export Orders
New export orders rose "only modestly," indicating
that growth centered on the domestic market, the bank said,
without giving numbers.
The report contained some encouraging signs for policy
makers, with input and output costs rising at a slower pace
and job creation quickening to the fastest since June, HSBC
said. Still, the inflation measures remain elevated, the bank
said.
Today's data "suggests industrial production momentum
is still strong, though sentiment may have been weakened a
bit by recent tightening measures and companies' lingering
concern over how such tightening is going to play out," said
Li Wei, Shanghai-based economist with Standard Chartered Bank.
Industrial companies' profits climbed 49 percent in the
first 11 months of 2010 to 3.88 trillion yuan ($585 billion),
according to a Dec. 27 government report.
The economy grew 9.6 percent in the third quarter from a
year earlier. Consumer prices climbed 5.1 percent in November
from a year earlier, the most in 28 months, and producer
prices gained 6.1 percent.
Inflation Fight
Peng Sen, vice chairman of the National Development and
Reform Commission, said the nation must prepare for a long-
term fight against inflation, according to a Dec. 21 report
on state television.
Companies in China, the world's biggest maker of steel,
cement and mobile phones, are expanding after exports topped
pre-crisis levels. The momentum of economic growth is
"consolidating," the central bank said Dec. 27.
Aluminum Corp. of China, or Chalco, will build a 17.5
billion yuan base that includes alumina and aluminum smelting
plants and a bauxite mine in the southwestern Guizhou
province, according to a statement in the government-run
People's Daily newspaper.
German carmaker VW's two joint ventures in China will
spend 10.6 billion euros ($14 billion) in the world's biggest
auto market through 2015, adding two factories to help double
production to 3 million cars a year, the company said last
month.
For Related News and Information:
Most-read stories on China: MNI CHINA <GO>
Top stories on China: TOPN <GO>
Top stories on Economy: TECO <GO>
Stories on China's economy: TNI CHINA ECO <GO>
China's economic-data watch indexes: ESNP CH <GO>
--Zheng Lifei. With assistance from Sophie Leung in Hong Kong
and Li Yanping in Beijing. Editors: Paul Panckhurst, Ken
McCallum
To contact Bloomberg News staff for this story:
Zheng Lifei in Beijing at +86-10-6649-7560
or lzheng32@bloomberg.net
To contact the editor responsible for this story:
Chris Anstey at +81-3-3201-7553 or
canstey@bloomberg.net
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Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
China Manufacturing Grows at Slower Pace, PMI Shows (Update2)
2010-12-30 04:17:13.596 GMT
(Adds economist's comment in fourth paragraph.)
By Bloomberg News
Dec. 30 (Bloomberg) -- China's manufacturing growth
slowed for the first time in five months in December as the
government tightened monetary policy and chased energy-
efficiency and pollution targets, a survey indicated.
A purchasing managers' index released today by HSBC
Holdings Plc and Markit Economics fell to 54.4 from 55.3 in
November. The data are seasonally adjusted and a reading
above 50 indicates an expansion.
Rising corporate profits and expansions by companies
including Aluminum Corp of China Ltd. and Volkswagen AG may
help to sustain manufacturing as the government curbs lending
to counter inflation. Morgan Stanley and JPMorgan Chase & Co.
forecast interest rates will rise at least twice in the first
half of 2011 after an increase on Christmas Day that was the
second since the global financial crisis.
"Inflation rather than growth still remains as the top
policy concern, despite the moderation in December's
manufacturing PMI reading," said Qu Hongbin, Hong Kong-based
China economist for HSBC. "Modest" interest-rate increases
are needed to anchor inflation expectations in coming months,
Qu said.
The Shanghai Composite Index fell 0.4 percent as of the
11:30 a.m. local time break in trading. The yuan touched
6.6142 per dollar, the strongest since 1993.
Switch From Contraction
While today's PMI reading was the weakest in three
months, it compares with a contraction as recently as July.
For the fourth quarter as a whole, the index had the
strongest performance since the first three months of this
year, HSBC said in a statement.
The measure is based on a survey of executives at more
than 430 companies and gives an indication of activity in the
manufacturing sector. A separate government-backed PMI is due
Jan. 1.
Higher interest rates, a crackdown on real-estate
speculation, and closures of energy-wasting and highly
polluting factories are among measures by Premier Wen
Jiabao's government that may cool growth. Officials have also
boosted reserve requirements for lenders six times this year
to counter inflation and limit asset bubbles in the real-
estate market.
Export Orders
New export orders rose "only modestly," indicating
that growth centered on the domestic market, the bank said,
without giving numbers.
The report contained some encouraging signs for policy
makers, with input and output costs rising at a slower pace
and job creation quickening to the fastest since June, HSBC
said. Still, the inflation measures remain elevated, the bank
said.
Today's data "suggests industrial production momentum
is still strong, though sentiment may have been weakened a
bit by recent tightening measures and companies' lingering
concern over how such tightening is going to play out," said
Li Wei, Shanghai-based economist with Standard Chartered Bank.
Industrial companies' profits climbed 49 percent in the
first 11 months of 2010 to 3.88 trillion yuan ($585 billion),
according to a Dec. 27 government report.
The economy grew 9.6 percent in the third quarter from a
year earlier. Consumer prices climbed 5.1 percent in November
from a year earlier, the most in 28 months, and producer
prices gained 6.1 percent.
Inflation Fight
Peng Sen, vice chairman of the National Development and
Reform Commission, said the nation must prepare for a long-
term fight against inflation, according to a Dec. 21 report
on state television.
Companies in China, the world's biggest maker of steel,
cement and mobile phones, are expanding after exports topped
pre-crisis levels. The momentum of economic growth is
"consolidating," the central bank said Dec. 27.
Aluminum Corp. of China, or Chalco, will build a 17.5
billion yuan base that includes alumina and aluminum smelting
plants and a bauxite mine in the southwestern Guizhou
province, according to a statement in the government-run
People's Daily newspaper.
German carmaker VW's two joint ventures in China will
spend 10.6 billion euros ($14 billion) in the world's biggest
auto market through 2015, adding two factories to help double
production to 3 million cars a year, the company said last
month.
For Related News and Information:
Most-read stories on China: MNI CHINA <GO>
Top stories on China: TOPN <GO>
Top stories on Economy: TECO <GO>
Stories on China's economy: TNI CHINA ECO <GO>
China's economic-data watch indexes: ESNP CH <GO>
--Zheng Lifei. With assistance from Sophie Leung in Hong Kong
and Li Yanping in Beijing. Editors: Paul Panckhurst, Ken
McCallum
To contact Bloomberg News staff for this story:
Zheng Lifei in Beijing at +86-10-6649-7560
or lzheng32@bloomberg.net
To contact the editor responsible for this story:
Chris Anstey at +81-3-3201-7553 or
canstey@bloomberg.net
2010/12/28
Fwd: + New York Travelers Face Delays as Winds Slow Clear-Up (Update1)
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
New York Travelers Face Delays as Winds Slow Clear-Up (Update1)
2010-12-28 11:41:35.917 GMT
(Updates with wind forecast in second paragraph.)
By Aaron Clark and Stuart Biggs
Dec. 28 (Bloomberg) -- New York commuters and travelers
face further disruptions today as winds hinder efforts to clear
roads and runways following the heaviest December snows in six
decades.
While the storm is moving slowly away, rising atmospheric
pressure will continue to cause winds gusting to about 40 mph
(64 kph) in some open areas, commercial forecaster AccuWeather
Inc. said on its website. Winds may "quickly" cover roads with
snow, according to a winter weather advisory from the National
Weather Service late yesterday.
Airports may struggle to keep runways clear, said
Pennsylvania-based AccuWeather. New York's LaGuardia, John F.
Kennedy International and Newark Liberty airports opened last
night for outgoing traffic after snows forced shutdowns.
Airlines have canceled more than 6,000 flights nationwide since
airports began to close on Dec. 26.
NJ Transit, which carries about 170,000 commuters to and
from New York City daily, said passengers should expect delays
because of local road conditions. The agency expected to restore
bus services at 12:01 a.m. and planned to operate reduced train
services today aside from on the Atlantic City Rail Line, it
said in a statement on its website. Amtrak will pare rail
services between Boston, New York and Washington, it said.
30-inch Snowfall
More than a foot of snow fell across the northeast
yesterday, with some areas in New Jersey getting more than 30
inches (76 centimeters), according to AccuWeather. Central Park
had 20 inches of snow by 8 a.m. yesterday, the most for the
month since 1948, the National Weather Service said.
New York City will have winds between 16 mph and 20 mph
with gusts as high as 31 mph, according to a Weather Service
forecast. Its winter weather advisory, covering a wider region,
said gusts may hit 55 mph overnight before slowing to 40 mph by
morning.
The storm reached New York the day after Christmas, one of
the five busiest shopping days of the year. It may take
retailers two weeks to recover from lost sales, said Marshal
Cohen, chief industry analyst at NPD Group Inc., a research firm
based in Port Washington, New York.
New York, which faces a $2.5 billion deficit in the $65
billion budget projected for next year, will be more affected by
lost economic activity than clean-up costs, Mayor Michael
Bloomberg said at a City Hall news conference on Dec. 26. The
mayor is founder and majority owner of Bloomberg News parent
Bloomberg LP.
The snowfall was the fifth-largest on record for the city,
Sanitation Commissioner John Doherty said on Dec. 26.
Flight Cancelations
U.S. carriers canceled at least 3,389 flights yesterday,
after cutting more than 3,334 on Dec. 26, as they waited for
airports to open in the Northeast, spokesmen said. Airlines in
some cases grounded flights ahead of the storm to keep planes
from getting stuck at closed facilities.
The storm brought snow as far south as parts of
Jacksonville, Florida, AccuWeather said. The storm system began
in the South over the Christmas holiday. Four inches of snow
fell in Chattanooga, Tennessee, while 8 inches was reported in
Gatlinburg, Tennessee.
Environment Canada issued a blizzard warning yesterday for
northeastern New Brunswick and warned of heavy snow or rain in
the rest of the Maritime provinces. The snowfall is expected to
taper off into flurries today, the agency said.
For Related News and Information:
For more winter weather stories: NSE US WINTER WEATHER <GO>
Weather stories: WNEWS <GO>
Bloomberg Weather Center: WEAT <GO>
Top stories: TOP <GO>
--With assistance from Henry Goldman, Will Daley, Jonathan
Keehner, Robert Friedman, Jim Polson, William Glasgall and
James Langford in New York City; Stacie Servetah in Trenton;
Chris Burritt in Greensboro, North Carolina; Mary
Schlangenstein in Dallas; Matt Walcoff in Toronto; Brian K.
Sullivan in Boston; Ola Kinnander in Stockholm and Andreas
Cremer in Dusseldorf. Editors: Dave McCombs, Neil Denslow,
Kenneth Wong
To contact the reporters on this story:
Aaron Clark in New York at +1-212-617-2473 or
aclark27@bloomberg.net;
Stuart Biggs in Tokyo at +81-3-3201-3093 or
sbiggs3@bloomberg.net.
To contact the editor responsible for this story:
Neil Denslow at +852-2977-6639 or
ndenslow@bloomberg.net.
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
New York Travelers Face Delays as Winds Slow Clear-Up (Update1)
2010-12-28 11:41:35.917 GMT
(Updates with wind forecast in second paragraph.)
By Aaron Clark and Stuart Biggs
Dec. 28 (Bloomberg) -- New York commuters and travelers
face further disruptions today as winds hinder efforts to clear
roads and runways following the heaviest December snows in six
decades.
While the storm is moving slowly away, rising atmospheric
pressure will continue to cause winds gusting to about 40 mph
(64 kph) in some open areas, commercial forecaster AccuWeather
Inc. said on its website. Winds may "quickly" cover roads with
snow, according to a winter weather advisory from the National
Weather Service late yesterday.
Airports may struggle to keep runways clear, said
Pennsylvania-based AccuWeather. New York's LaGuardia, John F.
Kennedy International and Newark Liberty airports opened last
night for outgoing traffic after snows forced shutdowns.
Airlines have canceled more than 6,000 flights nationwide since
airports began to close on Dec. 26.
NJ Transit, which carries about 170,000 commuters to and
from New York City daily, said passengers should expect delays
because of local road conditions. The agency expected to restore
bus services at 12:01 a.m. and planned to operate reduced train
services today aside from on the Atlantic City Rail Line, it
said in a statement on its website. Amtrak will pare rail
services between Boston, New York and Washington, it said.
30-inch Snowfall
More than a foot of snow fell across the northeast
yesterday, with some areas in New Jersey getting more than 30
inches (76 centimeters), according to AccuWeather. Central Park
had 20 inches of snow by 8 a.m. yesterday, the most for the
month since 1948, the National Weather Service said.
New York City will have winds between 16 mph and 20 mph
with gusts as high as 31 mph, according to a Weather Service
forecast. Its winter weather advisory, covering a wider region,
said gusts may hit 55 mph overnight before slowing to 40 mph by
morning.
The storm reached New York the day after Christmas, one of
the five busiest shopping days of the year. It may take
retailers two weeks to recover from lost sales, said Marshal
Cohen, chief industry analyst at NPD Group Inc., a research firm
based in Port Washington, New York.
New York, which faces a $2.5 billion deficit in the $65
billion budget projected for next year, will be more affected by
lost economic activity than clean-up costs, Mayor Michael
Bloomberg said at a City Hall news conference on Dec. 26. The
mayor is founder and majority owner of Bloomberg News parent
Bloomberg LP.
The snowfall was the fifth-largest on record for the city,
Sanitation Commissioner John Doherty said on Dec. 26.
Flight Cancelations
U.S. carriers canceled at least 3,389 flights yesterday,
after cutting more than 3,334 on Dec. 26, as they waited for
airports to open in the Northeast, spokesmen said. Airlines in
some cases grounded flights ahead of the storm to keep planes
from getting stuck at closed facilities.
The storm brought snow as far south as parts of
Jacksonville, Florida, AccuWeather said. The storm system began
in the South over the Christmas holiday. Four inches of snow
fell in Chattanooga, Tennessee, while 8 inches was reported in
Gatlinburg, Tennessee.
Environment Canada issued a blizzard warning yesterday for
northeastern New Brunswick and warned of heavy snow or rain in
the rest of the Maritime provinces. The snowfall is expected to
taper off into flurries today, the agency said.
For Related News and Information:
For more winter weather stories: NSE US WINTER WEATHER <GO>
Weather stories: WNEWS <GO>
Bloomberg Weather Center: WEAT <GO>
Top stories: TOP <GO>
--With assistance from Henry Goldman, Will Daley, Jonathan
Keehner, Robert Friedman, Jim Polson, William Glasgall and
James Langford in New York City; Stacie Servetah in Trenton;
Chris Burritt in Greensboro, North Carolina; Mary
Schlangenstein in Dallas; Matt Walcoff in Toronto; Brian K.
Sullivan in Boston; Ola Kinnander in Stockholm and Andreas
Cremer in Dusseldorf. Editors: Dave McCombs, Neil Denslow,
Kenneth Wong
To contact the reporters on this story:
Aaron Clark in New York at +1-212-617-2473 or
aclark27@bloomberg.net;
Stuart Biggs in Tokyo at +81-3-3201-3093 or
sbiggs3@bloomberg.net.
To contact the editor responsible for this story:
Neil Denslow at +852-2977-6639 or
ndenslow@bloomberg.net.
Dec24/ Carbon Stable Near Five-Month Low; German Power Advances
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
EU Carbon Stable Near Five-Month Low; German Power Advances
2010-12-24 12:55:14.148 GMT
By Mathew Carr
Dec. 24 (Bloomberg) -- European Union carbon dioxide
permits were stable near their lowest in almost five months as
demand from utilities was weak, said 70Watt Capital Management.
Allowances for December 2011 rose 1 cent to 14.09 euros
($18.50) a metric ton on the ICE Futures Europe exchange in
London. They were as low as 13.90 euros a ton earlier today, the
lowest intraday price since July 27, and have risen 7.2 percent
so far this year.
"Utility buying stopped," said Kris Voorspools, director
of 70Watt, a Luxembourg-based hedge fund that specializes in
trading spreads in energy and CO2 markets.
Generators will seek to wait for higher profit on power
sales before selling forward and buying carbon permits,
Voorspools said today by e-mail. German power for next year rose
1.1 percent to 51.45 euros a megawatt hour, according to data
from brokers. It's fallen 0.4 percent so far this year. The EU
carbon market is the world's largest greenhouse-gas reduction
program by traded volume.
For Related News and Information:
Emission market news NI ENVMARKET <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
--Editors: Rob Verdonck, Stephen Cunningham
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
EU Carbon Stable Near Five-Month Low; German Power Advances
2010-12-24 12:55:14.148 GMT
By Mathew Carr
Dec. 24 (Bloomberg) -- European Union carbon dioxide
permits were stable near their lowest in almost five months as
demand from utilities was weak, said 70Watt Capital Management.
Allowances for December 2011 rose 1 cent to 14.09 euros
($18.50) a metric ton on the ICE Futures Europe exchange in
London. They were as low as 13.90 euros a ton earlier today, the
lowest intraday price since July 27, and have risen 7.2 percent
so far this year.
"Utility buying stopped," said Kris Voorspools, director
of 70Watt, a Luxembourg-based hedge fund that specializes in
trading spreads in energy and CO2 markets.
Generators will seek to wait for higher profit on power
sales before selling forward and buying carbon permits,
Voorspools said today by e-mail. German power for next year rose
1.1 percent to 51.45 euros a megawatt hour, according to data
from brokers. It's fallen 0.4 percent so far this year. The EU
carbon market is the world's largest greenhouse-gas reduction
program by traded volume.
For Related News and Information:
Emission market news NI ENVMARKET <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
--Editors: Rob Verdonck, Stephen Cunningham
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
Fwd: China’s Ningxia Region Approves 60 Wind, Solar Power Projects
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
China's Ningxia Region Approves 60 Wind, Solar Power Projects
2010-12-27 09:57:47.297 GMT
By Bloomberg News
Dec. 27 (Bloomberg) -- China's region of Ningxia approved
60 wind and solar power projects in the first 11 months of 2010,
according to the country's environmental ministry.
The projects include 42 wind farms with a total capacity of
more than 2 gigawatts and 18 solar power plants totaling 356
megawatts, the Ministry of Environmental Protection said today
on its website. The projects have a combined value of about 26
billion yuan ($3.9 billion) and will cut 4 million tons of
carbon emissions annually, according to the ministry.
Power from the wind farms will have a price of 0.58 yuan a
kilowatt-hour, according to data from Bloomberg New Energy
Finance. Ningxia, which doesn't have a fixed price for solar
power, set an interim tariff of 1.15 yuan a kilowatt-hour in
April for four solar plants in the region.
For Related News and Information:
Most-read alternative energy stories: MNI ALTNRG <GO>
For top news on renewable energy TOP ENV <GO>
New Energy Finance news and analysis: BNEF <GO>
--Editors: John Buckley, Todd White
To contact Bloomberg News staff for this story:
Feifei Shen in Beijing at +86-10-6649-7527 or
Fshen11@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or
landberg@bloomberg.net.
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
China's Ningxia Region Approves 60 Wind, Solar Power Projects
2010-12-27 09:57:47.297 GMT
By Bloomberg News
Dec. 27 (Bloomberg) -- China's region of Ningxia approved
60 wind and solar power projects in the first 11 months of 2010,
according to the country's environmental ministry.
The projects include 42 wind farms with a total capacity of
more than 2 gigawatts and 18 solar power plants totaling 356
megawatts, the Ministry of Environmental Protection said today
on its website. The projects have a combined value of about 26
billion yuan ($3.9 billion) and will cut 4 million tons of
carbon emissions annually, according to the ministry.
Power from the wind farms will have a price of 0.58 yuan a
kilowatt-hour, according to data from Bloomberg New Energy
Finance. Ningxia, which doesn't have a fixed price for solar
power, set an interim tariff of 1.15 yuan a kilowatt-hour in
April for four solar plants in the region.
For Related News and Information:
Most-read alternative energy stories: MNI ALTNRG <GO>
For top news on renewable energy TOP ENV <GO>
New Energy Finance news and analysis: BNEF <GO>
--Editors: John Buckley, Todd White
To contact Bloomberg News staff for this story:
Feifei Shen in Beijing at +86-10-6649-7527 or
Fshen11@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or
landberg@bloomberg.net.
Fwd: Ukraine Court Orders Ex-Minister to Be Jailed for Two Months
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Ukraine Court Orders Ex-Minister to Be Jailed for Two Months
2010-12-27 15:23:53.471 GMT
By Daryna Krasnolutska and Kateryna Choursina
Dec. 27 (Bloomberg) -- A Ukrainian court ordered former
Interior Minister Yuriy Lutsenko to be held in jail for two
months as the prosecutor general office investigates allegations
of abuse of office.
Lutsenko was detained yesterday at 12:55 p.m. in Kiev,
according to a statement on the website of his Narodna
Samooborona party. Lutsenko said in a separate statement that
neither he, nor his lawyer, were informed yesterday as to why he
was detained. He has three days to challenge the decision.
"Lutsenko is charged with office abuse and exceeding his
authority and misappropriation of state funds in large
amounts," Yuriy Boychenko, the head of the Prosecutor-General's
press service, said by phone. "He was informed of the charges
on Dec. 13 and didn't meet the investigator so the investigator
asked the court to replace the no-flee pledge with an arrest as
the investigation continues."
Lutsenko is the sixth member of former Prime Minister Yulia
Tymoshenko's Cabinet under investigation. Tymoshenko lost a
presidential election to Viktor Yanukovych in a February
election and the president has since cemented his grip on power,
gaining the right to name the prime minister and Cabinet in
October.
The former premier has been under investigation since Dec.
15 for the alleged misuse of funds from the 2009 sale of
emissions permits to Japan. Tymoshenko, who was ordered to stay
in Kiev during the probe, denied any wrongdoing and called the
procedure "terror against the opposition."
Prosecutors in August opened a criminal probe against
former Economy Minister Bohdan Danylyshyn, saying he also
misused funds. He was arrested two months ago in Prague, where
he sought asylum. Former Environment Minister Heorhiy Filipchuk
is being investigated, while former First Deputy Justice
Minister Evhen Korniychuk and ex-Transport Minister Viktor
Bondar were detained last week. The former Head of Ukraine's
State Treasury, Tetiana Sliuz, is on a wanted list.
Ihor Didenko, a former first deputy chief executive officer
at NAK Naftogaz Ukrainy, was arrested this summer.
For Related News and Information:
For more Ukrainian news: NI UKR BN <GO>
Stories about Ukrainian economy: TNI UKR ECO <GO>
Industrial production: UAIPYY <Index> HP <GO>
Emerging market view: EMMV <GO>
Top east Europe news: TOP EEU <GO>
Economic statistics: ECST <GO>
--Editors: Alan Crosby, Douglas Lytle
To contact the reporter on this story:
Daryna Krasnolutska in Kiev at +38-044-490-1252 or
dkrasnolutsk@bloomberg.net;
To contact the editor responsible for this story:
Willy Morris at +44-20-7673-2254 or
wmorris@bloomberg.net;
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Ukraine Court Orders Ex-Minister to Be Jailed for Two Months
2010-12-27 15:23:53.471 GMT
By Daryna Krasnolutska and Kateryna Choursina
Dec. 27 (Bloomberg) -- A Ukrainian court ordered former
Interior Minister Yuriy Lutsenko to be held in jail for two
months as the prosecutor general office investigates allegations
of abuse of office.
Lutsenko was detained yesterday at 12:55 p.m. in Kiev,
according to a statement on the website of his Narodna
Samooborona party. Lutsenko said in a separate statement that
neither he, nor his lawyer, were informed yesterday as to why he
was detained. He has three days to challenge the decision.
"Lutsenko is charged with office abuse and exceeding his
authority and misappropriation of state funds in large
amounts," Yuriy Boychenko, the head of the Prosecutor-General's
press service, said by phone. "He was informed of the charges
on Dec. 13 and didn't meet the investigator so the investigator
asked the court to replace the no-flee pledge with an arrest as
the investigation continues."
Lutsenko is the sixth member of former Prime Minister Yulia
Tymoshenko's Cabinet under investigation. Tymoshenko lost a
presidential election to Viktor Yanukovych in a February
election and the president has since cemented his grip on power,
gaining the right to name the prime minister and Cabinet in
October.
The former premier has been under investigation since Dec.
15 for the alleged misuse of funds from the 2009 sale of
emissions permits to Japan. Tymoshenko, who was ordered to stay
in Kiev during the probe, denied any wrongdoing and called the
procedure "terror against the opposition."
Prosecutors in August opened a criminal probe against
former Economy Minister Bohdan Danylyshyn, saying he also
misused funds. He was arrested two months ago in Prague, where
he sought asylum. Former Environment Minister Heorhiy Filipchuk
is being investigated, while former First Deputy Justice
Minister Evhen Korniychuk and ex-Transport Minister Viktor
Bondar were detained last week. The former Head of Ukraine's
State Treasury, Tetiana Sliuz, is on a wanted list.
Ihor Didenko, a former first deputy chief executive officer
at NAK Naftogaz Ukrainy, was arrested this summer.
For Related News and Information:
For more Ukrainian news: NI UKR BN <GO>
Stories about Ukrainian economy: TNI UKR ECO <GO>
Industrial production: UAIPYY <Index> HP <GO>
Emerging market view: EMMV <GO>
Top east Europe news: TOP EEU <GO>
Economic statistics: ECST <GO>
--Editors: Alan Crosby, Douglas Lytle
To contact the reporter on this story:
Daryna Krasnolutska in Kiev at +38-044-490-1252 or
dkrasnolutsk@bloomberg.net;
To contact the editor responsible for this story:
Willy Morris at +44-20-7673-2254 or
wmorris@bloomberg.net;
Fwd: + Japan Fudges Carbon Trading Start as Industry Opposes (Update1)
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Japan Fudges Carbon Trading Start as Industry Opposes (Update1)
2010-12-28 07:32:03.691 GMT
(Updates with Tokyo plans in sixth paragraph.)
By Chisaki Watanabe
Dec. 28 (Bloomberg) -- Japan's government took a step back
from plans to start carbon trading in 2013 amid opposition from
industries that say emission-trading rules would add to costs
and limit their ability to compete against rivals in China and
India who don't face the same restrictions.
Environment Minister Ryu Matsumoto declined to commit to
the 2013 date in a press conference today after a meeting with
other ministers to discuss the nation's emissions trading plans.
In August, an environment ministry panel recommended starting
emission trading in fiscal 2013.
"We will continue to study carbon trading taking into
account various opinions," Matsumoto said at the press
conference. When questioned on when Japan's carbon trading
market would start, he wouldn't give a date.
The ministers agreed that while a carbon trading scheme is
a "pillar" of anti-global warming efforts, there are concerns
it will deter investments in growing industries, said Masato
Okawa, an official at the National Policy Unit of the Cabinet
Secretariat who attended the meeting.
A September survey by Keidanren, Japan's largest business
lobby group, found that 61 of the 64 companies that responded
said they oppose carbon trading, citing competition from
countries like India and China that are not bound by similar
pollution limits.
Lagging Tokyo
Any delay would leave the national government further
behind the capital in introducing carbon trading. Tokyo's
government started a cap-and-trade program in April as part of
Governor Shintaro Ishihara's plan to cut greenhouse gas
emissions by 25 percent this decade. The Tokyo market had its
first emissions trade in August.
Japan's government also said last month it won't help
extend the Kyoto Protocol accord to curb greenhouse-gas
emissions after its targets expire in 2012, calling the treaty
"outdated" because it only regulates 27 percent of global
emissions and doesn't include the U.S. and China.
The stance drew criticism from the G77 group of developing
countries at United Nations climate talks in Cancun, Mexico,
earlier this month.
The Ministry of Economy, Trade and Industry said yesterday
it will provide 110 billion yen ($1.3 billion) in subsidies to
153 low-carbon projects nationwide. Companies receiving the
money plan a total 530 billion yen in capital investment to
produce energy efficient cars and electronic products, while
creating jobs.
For Related News and Information:
Most-read alternative energy stories: MNI ALTNRG <GO>
New Energy Finance news and analysis: BNEF <GO>
Renewable energy, environment page: GREEN <GO>
Top Environment stories: TOP ENV <GO>
Top Japan stories: TOP JN <GO>
With assistance by Stuart Biggs in Tokyo. Editors: Peter Langan,
Aaron Sheldrick
To contact the reporters on this story:
Chisaki Watanabe in Tokyo at +81-3-3201-2541 or
cwatanabe5@bloomberg.net.
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-78624 or
landberg@bloomberg.net.
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Japan Fudges Carbon Trading Start as Industry Opposes (Update1)
2010-12-28 07:32:03.691 GMT
(Updates with Tokyo plans in sixth paragraph.)
By Chisaki Watanabe
Dec. 28 (Bloomberg) -- Japan's government took a step back
from plans to start carbon trading in 2013 amid opposition from
industries that say emission-trading rules would add to costs
and limit their ability to compete against rivals in China and
India who don't face the same restrictions.
Environment Minister Ryu Matsumoto declined to commit to
the 2013 date in a press conference today after a meeting with
other ministers to discuss the nation's emissions trading plans.
In August, an environment ministry panel recommended starting
emission trading in fiscal 2013.
"We will continue to study carbon trading taking into
account various opinions," Matsumoto said at the press
conference. When questioned on when Japan's carbon trading
market would start, he wouldn't give a date.
The ministers agreed that while a carbon trading scheme is
a "pillar" of anti-global warming efforts, there are concerns
it will deter investments in growing industries, said Masato
Okawa, an official at the National Policy Unit of the Cabinet
Secretariat who attended the meeting.
A September survey by Keidanren, Japan's largest business
lobby group, found that 61 of the 64 companies that responded
said they oppose carbon trading, citing competition from
countries like India and China that are not bound by similar
pollution limits.
Lagging Tokyo
Any delay would leave the national government further
behind the capital in introducing carbon trading. Tokyo's
government started a cap-and-trade program in April as part of
Governor Shintaro Ishihara's plan to cut greenhouse gas
emissions by 25 percent this decade. The Tokyo market had its
first emissions trade in August.
Japan's government also said last month it won't help
extend the Kyoto Protocol accord to curb greenhouse-gas
emissions after its targets expire in 2012, calling the treaty
"outdated" because it only regulates 27 percent of global
emissions and doesn't include the U.S. and China.
The stance drew criticism from the G77 group of developing
countries at United Nations climate talks in Cancun, Mexico,
earlier this month.
The Ministry of Economy, Trade and Industry said yesterday
it will provide 110 billion yen ($1.3 billion) in subsidies to
153 low-carbon projects nationwide. Companies receiving the
money plan a total 530 billion yen in capital investment to
produce energy efficient cars and electronic products, while
creating jobs.
For Related News and Information:
Most-read alternative energy stories: MNI ALTNRG <GO>
New Energy Finance news and analysis: BNEF <GO>
Renewable energy, environment page: GREEN <GO>
Top Environment stories: TOP ENV <GO>
Top Japan stories: TOP JN <GO>
With assistance by Stuart Biggs in Tokyo. Editors: Peter Langan,
Aaron Sheldrick
To contact the reporters on this story:
Chisaki Watanabe in Tokyo at +81-3-3201-2541 or
cwatanabe5@bloomberg.net.
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-78624 or
landberg@bloomberg.net.
Fwd: India's Gujarat State Drafts Geothermal Energy Policy, Economic Times Says
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
India's Gujarat Plans Geothermal Energy Policy, Times Reports
2010-12-28 04:52:25.399 GMT
By Natalie Obiko Pearson
Dec. 28 (Bloomberg) -- India's Gujarat state is drafting a
policy to promote geothermal energy, the Economic Times
reported, citing Chief Minister Narendra Modi.
The Ministry of New & Renewable Energy has identified
Gujarat as one of the states with potential for setting up
geothermal power plants, according to the report.
Geothermal energy is produced by tapping heat contained in
rocks and water deep underground. Gujarat set a policy in
January 2009 for developing solar energy. The state has awarded
716 megawatts in solar projects to companies, according to the
website of the Gujarat Energy Development Agency.
For Related News and Information:
Most-read India stories: MNI INDIA <GO>
Geothermal energy news: NI GEOTHERMAL <GO>
Renewable energy, environment page: GREEN <GO>
Most-read alternative energy stories: MNI ALTNRG <GO>
--Editors: John Chacko, Jane Lee.
To contact the reporter on this story:
Natalie Obiko Pearson in Mumbai at +91-22-6612-9107 or
npearson7@bloomberg.net.
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or landberg@bloomberg.net.
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
India's Gujarat Plans Geothermal Energy Policy, Times Reports
2010-12-28 04:52:25.399 GMT
By Natalie Obiko Pearson
Dec. 28 (Bloomberg) -- India's Gujarat state is drafting a
policy to promote geothermal energy, the Economic Times
reported, citing Chief Minister Narendra Modi.
The Ministry of New & Renewable Energy has identified
Gujarat as one of the states with potential for setting up
geothermal power plants, according to the report.
Geothermal energy is produced by tapping heat contained in
rocks and water deep underground. Gujarat set a policy in
January 2009 for developing solar energy. The state has awarded
716 megawatts in solar projects to companies, according to the
website of the Gujarat Energy Development Agency.
For Related News and Information:
Most-read India stories: MNI INDIA <GO>
Geothermal energy news: NI GEOTHERMAL <GO>
Renewable energy, environment page: GREEN <GO>
Most-read alternative energy stories: MNI ALTNRG <GO>
--Editors: John Chacko, Jane Lee.
To contact the reporter on this story:
Natalie Obiko Pearson in Mumbai at +91-22-6612-9107 or
npearson7@bloomberg.net.
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or landberg@bloomberg.net.
2010/12/24
?EU Carbon Emission Allowances Fall to Lowest Since July 27
By Mathew Carr
Dec. 24 (Bloomberg) -- European Union carbon dioxide
permits fell to their lowest in almost five months. Allowances
for December 2011 dropped as much as 1.3 percent to 13.90 euros
a metric ton on the ICE Futures Europe exchange in London, the
lowest intraday price since July 27. They were at 13.94 euros a
ton as of 9:06 a.m.
For Related News and Information:
Top Stories:{TOP<GO>}
2010/12/23
(BN) Crude Oil Rises to Two-Year High as Consumer
+------------------------------------------------------------------------------+
Crude Oil Rises to Two-Year High as Consumer Confidence Climbs
2010-12-23 16:48:05.520 GMT
By Mark Shenk
Dec. 23 (Bloomberg) -- Crude oil rose to the highest level
in more than two years as confidence among U.S. consumers
advanced to a six-month high, signaling that fuel demand will
increase in the biggest oil-consuming country.
Oil jumped as much as 0.9 percent after the Thomson
Reuters/University of Michigan final index of consumer sentiment
for December climbed to 74.5 from 71.6 in November. First-time
filings for jobless benefits declined by 3,000 to 420,000 in the
week ended Dec. 18, Labor Department figures showed.
"Today's data supports the economy and is boosting the oil
market," said Peter Beutel, president of Cameron Hanover Inc.,
a trading-advisory company in New Canaan, Connecticut. "All
week we've wanted to move higher, either because of the rising
stock market or the improving economic outlook."
Crude oil for February delivery advanced 62 cents, or 0.7
percent, to $91.10 a barrel at 11:26 a.m. on the New York
Mercantile Exchange. Futures touched $91.32, the highest level
since Oct. 7, 2008. Prices are up 15 percent this year. Floor
trading will end at 1:30 p.m. today, an hour earlier than usual.
Brent crude oil for February settlement increased 47 cents,
or 0.5 percent, to $94.12 a barrel on the London-based ICE
Futures Europe exchange.
Spending by consumers increased in November for a fifth
month, The Commerce Department said today. Household purchases
rose 0.4 percent after a 0.7 percent increase in October that
was almost twice as large as previously estimated. Incomes
climbed 0.3 percent.
Stocks were little changed. The Standard & Poor's 500 Index
fell 0.1 to 1,257.16 at 11:03 a.m. in New York. The Dow Jones
Industrial Average rose 0.1 percent to 11,571.83.
Oil Supplies
U.S. crude oil inventories fell 5.33 million barrels to
340.7 million in the week ended Dec. 17, the lowest level since
February, the Energy Department reported yesterday.
"Weather in the U.S. and Europe is supportive, and we had
another big inventory drop," said Tobias Merath, head of
commodities at Credit Suisse Group in Zurich. "But these are
mostly temporary factors, and when these fade I see a risk we'll
move to the mid-$80s at the beginning of next year."
For Related News and Information:
Top energy, oil stories: ETOP <GO> and OTOP <GO>
News on oil inventories: TNI OIL INV <GO>
News on oil markets: NI OILMARKET <GO>
Global energy statistics: ENST <GO>
--With assistance from Grant Smith in London. Editors: Joe Link,
Dan Stets
To contact the reporter on this story:
Mark Shenk in New York at +1-212-617-4331 or
mshenk1@bloomberg.net
To contact the editor responsible for this story:
Dan Stets at +1-212-617-4403 or
dstets@bloomberg.net.
Crude Oil Rises to Two-Year High as Consumer Confidence Climbs
2010-12-23 16:48:05.520 GMT
By Mark Shenk
Dec. 23 (Bloomberg) -- Crude oil rose to the highest level
in more than two years as confidence among U.S. consumers
advanced to a six-month high, signaling that fuel demand will
increase in the biggest oil-consuming country.
Oil jumped as much as 0.9 percent after the Thomson
Reuters/University of Michigan final index of consumer sentiment
for December climbed to 74.5 from 71.6 in November. First-time
filings for jobless benefits declined by 3,000 to 420,000 in the
week ended Dec. 18, Labor Department figures showed.
"Today's data supports the economy and is boosting the oil
market," said Peter Beutel, president of Cameron Hanover Inc.,
a trading-advisory company in New Canaan, Connecticut. "All
week we've wanted to move higher, either because of the rising
stock market or the improving economic outlook."
Crude oil for February delivery advanced 62 cents, or 0.7
percent, to $91.10 a barrel at 11:26 a.m. on the New York
Mercantile Exchange. Futures touched $91.32, the highest level
since Oct. 7, 2008. Prices are up 15 percent this year. Floor
trading will end at 1:30 p.m. today, an hour earlier than usual.
Brent crude oil for February settlement increased 47 cents,
or 0.5 percent, to $94.12 a barrel on the London-based ICE
Futures Europe exchange.
Spending by consumers increased in November for a fifth
month, The Commerce Department said today. Household purchases
rose 0.4 percent after a 0.7 percent increase in October that
was almost twice as large as previously estimated. Incomes
climbed 0.3 percent.
Stocks were little changed. The Standard & Poor's 500 Index
fell 0.1 to 1,257.16 at 11:03 a.m. in New York. The Dow Jones
Industrial Average rose 0.1 percent to 11,571.83.
Oil Supplies
U.S. crude oil inventories fell 5.33 million barrels to
340.7 million in the week ended Dec. 17, the lowest level since
February, the Energy Department reported yesterday.
"Weather in the U.S. and Europe is supportive, and we had
another big inventory drop," said Tobias Merath, head of
commodities at Credit Suisse Group in Zurich. "But these are
mostly temporary factors, and when these fade I see a risk we'll
move to the mid-$80s at the beginning of next year."
For Related News and Information:
Top energy, oil stories: ETOP <GO> and OTOP <GO>
News on oil inventories: TNI OIL INV <GO>
News on oil markets: NI OILMARKET <GO>
Global energy statistics: ENST <GO>
--With assistance from Grant Smith in London. Editors: Joe Link,
Dan Stets
To contact the reporter on this story:
Mark Shenk in New York at +1-212-617-4331 or
mshenk1@bloomberg.net
To contact the editor responsible for this story:
Dan Stets at +1-212-617-4403 or
dstets@bloomberg.net.
EU Carbon Drops Near 5-Month Low, Coal Brushes 2-Year High
+------------------------------------------------------------------------------+
EU Carbon Drops Near Five-Month Low, Coal Brushes Two-Year High
2010-12-23 14:16:30.210 GMT
By Mathew Carr
Dec. 23 (Bloomberg) -- European Union carbon allowances for
December 2011 fell close to their lowest level in almost five
months as coal prices approached a two-year high, making the
dirtier fuel less profitable for power utilities.
EU permits lost 1.2 percent to 14.15 euros ($18.53) a
metric ton on London's ICE Futures Europe exchange as of 1:11
p.m. They fell as low as 14 euros on Dec. 20, the lowest
intraday-price since July 28.
Power utilities need about double the permits when using
coal instead of cleaner-burning natural gas.
Coal for next year in northwest Europe was unchanged today
at $117.50 a ton, according to broker data. It reached $119 a
ton on Dec. 20 in intraday trading, its highest since Nov. 5,
2008. The United Nations issued 897,000 tons of offset credits
today to seven projects, boosting supply.
For Related News and Information:
Emission market news NI ENVMARKET <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
--Editors: Bruce Stanley, Reed Landberg
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
EU Carbon Drops Near Five-Month Low, Coal Brushes Two-Year High
2010-12-23 14:16:30.210 GMT
By Mathew Carr
Dec. 23 (Bloomberg) -- European Union carbon allowances for
December 2011 fell close to their lowest level in almost five
months as coal prices approached a two-year high, making the
dirtier fuel less profitable for power utilities.
EU permits lost 1.2 percent to 14.15 euros ($18.53) a
metric ton on London's ICE Futures Europe exchange as of 1:11
p.m. They fell as low as 14 euros on Dec. 20, the lowest
intraday-price since July 28.
Power utilities need about double the permits when using
coal instead of cleaner-burning natural gas.
Coal for next year in northwest Europe was unchanged today
at $117.50 a ton, according to broker data. It reached $119 a
ton on Dec. 20 in intraday trading, its highest since Nov. 5,
2008. The United Nations issued 897,000 tons of offset credits
today to seven projects, boosting supply.
For Related News and Information:
Emission market news NI ENVMARKET <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
--Editors: Bruce Stanley, Reed Landberg
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
(BN) New Zealand Announces Panel for Emissions Trading Plan Review
+------------------------------------------------------------------------------+
New Zealand Announces Panel for Emissions Trading Plan Review
2010-12-22 21:41:30.856 GMT
By Chris Bourke
Dec. 23 (Bloomberg) -- New Zealand's government has
announced the panel and terms of reference for a review into its
emissions trading plan, Climate Change Issues Minister Nick
Smith said in an e-mailed statement. The review will be chaired
by David Caygill.
For Related News and Information:
Top Stories:{TOP<GO>}
To contact the editor responsible for this story:
Chris Bourke at +64-4-498-2215 or
cbourke4@bloomberg.net
New Zealand Announces Panel for Emissions Trading Plan Review
2010-12-22 21:41:30.856 GMT
By Chris Bourke
Dec. 23 (Bloomberg) -- New Zealand's government has
announced the panel and terms of reference for a review into its
emissions trading plan, Climate Change Issues Minister Nick
Smith said in an e-mailed statement. The review will be chaired
by David Caygill.
For Related News and Information:
Top Stories:{TOP<GO>}
To contact the editor responsible for this story:
Chris Bourke at +64-4-498-2215 or
cbourke4@bloomberg.net
low growth?EU 2012 Carbon Premium Over 2011 at Lowest Since
EU 2012 Carbon Premium Over 2011 at Lowest Since July 2007
By Mathew Carr
Dec. 23 (Bloomberg) -- The premium of European Union carbon
allowances for December 2012 over 2011 fell to its narrowest
since July 2007 as the bloc's regulators seek to limit the
impact of an oversupplied market.
The 2012 premium, traded as a separate contract, narrowed
as much as 9.3 percent to 39 cents a metric ton on ICE Futures
Europe in London. The spread was at 40 cents at 8:06 a.m.
------------------------------------------------------------
Mathew Carr, emissions markets, energy reporter. London Bloomberg News ph +44 207 073 3531 yahoo ID carr_mathew
yest Point Carbon Reduces Estimate for UN Offset Supply
+------------------------------------------------------------------------------+
Point Carbon Reduces Estimate for UN Offset Supply Through 2012
2010-12-22 16:31:51.884 GMT
By Mathew Carr
Dec. 22 (Bloomberg) -- Point Carbon cut its estimate of
United Nations Clean Development Mechanism credit supply through
2012 by 2.8 percent because fewer-than-expected monitoring
reports are being published and demand is expected to be lower.
The Oslo-based company, a unit of Thomson Reuters Corp.,
forecast 1.074 billion metric tons of credits will be issued
under the UN program by the end of 2012, 31 million less than a
prediction made a month ago, according to an e-mailed research
note. Each credit is the equivalent of a ton of carbon dioxide.
The estimate for issuance in 2011 was cut 9 million tons to
253 million tons, according to the note. Total Certified
Emission Reductions through 2020 will reach 3.667 billion tons,
41 million tons lower than the earlier forecast, it said.
For Related News and Information:
EU carbon-market stories: TNI EU ENVMARKET <GO>
Top energy news: ETOP <GO>
Top environmental stories: GREEN <GO>
--Editors: Rob Verdonck, Alex Devine
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
Point Carbon Reduces Estimate for UN Offset Supply Through 2012
2010-12-22 16:31:51.884 GMT
By Mathew Carr
Dec. 22 (Bloomberg) -- Point Carbon cut its estimate of
United Nations Clean Development Mechanism credit supply through
2012 by 2.8 percent because fewer-than-expected monitoring
reports are being published and demand is expected to be lower.
The Oslo-based company, a unit of Thomson Reuters Corp.,
forecast 1.074 billion metric tons of credits will be issued
under the UN program by the end of 2012, 31 million less than a
prediction made a month ago, according to an e-mailed research
note. Each credit is the equivalent of a ton of carbon dioxide.
The estimate for issuance in 2011 was cut 9 million tons to
253 million tons, according to the note. Total Certified
Emission Reductions through 2020 will reach 3.667 billion tons,
41 million tons lower than the earlier forecast, it said.
For Related News and Information:
EU carbon-market stories: TNI EU ENVMARKET <GO>
Top energy news: ETOP <GO>
Top environmental stories: GREEN <GO>
--Editors: Rob Verdonck, Alex Devine
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
yest/UN Offsets Erase Gains as Record January Supply Is
down to 11.31 today
+------------------------------------------------------------------------------+
UN Offsets Erase Gains as Record January Supply Is Forecast
2010-12-22 17:46:13.802 GMT
By Mathew Carr
Dec. 22 (Bloomberg) -- United Nations carbon credits erased
gains as IDEAcarbon, the London-based rater of emission-
reduction projects, said there would be a record supply of new
offsets next month.
UN Certified Emission Reductions for December 2011
increased 0.4 percent to 11.41 euros ($14.93) a metric ton on
ICE Futures Europe in London as of 5:38 p.m. They were earlier
today up as much as 1.5 percent. European Union allowances for
the same period rose 1 percent to close at 14.32 euros, its
highest since Dec. 16.
Issuances next month of CERs will reach at least 34.7
million tons, Alessandro Vitelli, a London-based analyst at
IDEAcarbon, said today by e-mail. That's 40 percent more than
the record 24.8 million tons issued last month under the
program.
For Related News and Information:
U.K. power-market stories TNI UK PWRMARKET <GO>
Today's top energy news ETOP <GO>
U.K. electricity prices ELEU <GO>
Natural-gas markets menu NATG <GO>
--Editors: Rob Verdonck, Randall Hackley
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
+------------------------------------------------------------------------------+
UN Offsets Erase Gains as Record January Supply Is Forecast
2010-12-22 17:46:13.802 GMT
By Mathew Carr
Dec. 22 (Bloomberg) -- United Nations carbon credits erased
gains as IDEAcarbon, the London-based rater of emission-
reduction projects, said there would be a record supply of new
offsets next month.
UN Certified Emission Reductions for December 2011
increased 0.4 percent to 11.41 euros ($14.93) a metric ton on
ICE Futures Europe in London as of 5:38 p.m. They were earlier
today up as much as 1.5 percent. European Union allowances for
the same period rose 1 percent to close at 14.32 euros, its
highest since Dec. 16.
Issuances next month of CERs will reach at least 34.7
million tons, Alessandro Vitelli, a London-based analyst at
IDEAcarbon, said today by e-mail. That's 40 percent more than
the record 24.8 million tons issued last month under the
program.
For Related News and Information:
U.K. power-market stories TNI UK PWRMARKET <GO>
Today's top energy news ETOP <GO>
U.K. electricity prices ELEU <GO>
Natural-gas markets menu NATG <GO>
--Editors: Rob Verdonck, Randall Hackley
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
2010/12/22
(BN) Joint U.K. Power Index May Boost Exchange Trading, APX
+------------------------------------------------------------------------------+
Joint U.K. Power Index May Boost Exchange Trading, APX Says
2010-12-22 10:02:38.598 GMT
By Catherine Airlie and Lars Paulsson
Dec. 22 (Bloomberg) -- U.K. power trading on exchanges may
be boosted were APX BV and N2EX to release a joint index,
according to APX's chief executive officer.
APX, which currently handles about 4 percent of physically
traded U.K. electricity, supports a joint index of its daily
auction with one organized by N2EX, a competing exchange run by
Nasdaq OMX Group Inc. and Nord Pool Spot AS, Bert den Ouden, the
Amsterdam-based bourse's CEO, said today in an e-mail.
Utilities including RWE AG and E.ON AG are trading more on
exchanges to reduce credit risk and heed regulatory calls for
more transparency. E.ON last week called for one reference
electricity price for the U.K. from the competing platforms. APX
plans to boost trades in its auction when it links to the Dutch
market. There have been no deals on APX since September 2009.
"In order to help market transparency and trading, a
consolidated index could be established from a volume-weighted
index of the APX-ENDEX and the N2EX auctions," den Ouden said.
Nasdaq and Nord Pool won a tender to establish an exchange-
based U.K. power futures market in 2008, beating off competition
from APX and the Leipzig-based European Energy Exchange. They
plan to determine futures prices using N2EX's daily auction as a
reference. N2EX didn't immediately reply to a telephone call and
an e-mail from Bloomberg requesting comment.
APX plans to offer market coupling between the U.K. and the
Netherlands on the 1,000-megawatt BritNed cable from April.
Market coupling involves the selling of electricity and capacity
in one deal.
Record Volume
Power trading on the APX exchange may rise to 10 percent of
physical volumes once the link is ready, den Ouden said. The
platform is the only provider of within-day electricity
contracts and traded a record 83.2 gigawatt-hours of U.K.
within-day and near-term electricity on Dec. 20, it said in an
e-mailed statement.
N2EX handled a record volume of 26.4 gigawatt-hours on its
day-ahead auction yesterday, Bloomberg data show.
European network operators may create a single price for
power across the U.K., central western Europe and the Nordic
region using quotes across all exchanges, den Ouden said.
"This new market coupling mechanism will produce a fully
consolidated U.K. day-ahead index automatically, because it
bundles the liquidity in the day-ahead auctions of all involved
exchanges, resulting in a single hourly price for the U.K.," he
said.
Methods to improve pricing signals from other power markets
may not benefit the U.K., European Energy Exchange AG CEO Hans-
Bernd Menzel said last week in London.
"It's not sufficient to use previous methods for the U.K.
market, it's not enough to use old copy-and-paste methods,"
Menzel said at a briefing with reporters. "There's too much 'I
do it better' comments from the current exchange providers," he
said. "They are just using old methods."
For Related News and Information:
Top Power Stories: PTOP <GO>
U.K. Power Prices: ELEU <GO>
--Editors: Rob Verdonck, Raj Rajendran
To contact the reporters on this story:
Catherine Airlie in London at +44-20-7073-3308 or
cairlie@bloomberg.net;
Lars Paulsson in London at +44-20-7673-2759 or
lpaulsson@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
Joint U.K. Power Index May Boost Exchange Trading, APX Says
2010-12-22 10:02:38.598 GMT
By Catherine Airlie and Lars Paulsson
Dec. 22 (Bloomberg) -- U.K. power trading on exchanges may
be boosted were APX BV and N2EX to release a joint index,
according to APX's chief executive officer.
APX, which currently handles about 4 percent of physically
traded U.K. electricity, supports a joint index of its daily
auction with one organized by N2EX, a competing exchange run by
Nasdaq OMX Group Inc. and Nord Pool Spot AS, Bert den Ouden, the
Amsterdam-based bourse's CEO, said today in an e-mail.
Utilities including RWE AG and E.ON AG are trading more on
exchanges to reduce credit risk and heed regulatory calls for
more transparency. E.ON last week called for one reference
electricity price for the U.K. from the competing platforms. APX
plans to boost trades in its auction when it links to the Dutch
market. There have been no deals on APX since September 2009.
"In order to help market transparency and trading, a
consolidated index could be established from a volume-weighted
index of the APX-ENDEX and the N2EX auctions," den Ouden said.
Nasdaq and Nord Pool won a tender to establish an exchange-
based U.K. power futures market in 2008, beating off competition
from APX and the Leipzig-based European Energy Exchange. They
plan to determine futures prices using N2EX's daily auction as a
reference. N2EX didn't immediately reply to a telephone call and
an e-mail from Bloomberg requesting comment.
APX plans to offer market coupling between the U.K. and the
Netherlands on the 1,000-megawatt BritNed cable from April.
Market coupling involves the selling of electricity and capacity
in one deal.
Record Volume
Power trading on the APX exchange may rise to 10 percent of
physical volumes once the link is ready, den Ouden said. The
platform is the only provider of within-day electricity
contracts and traded a record 83.2 gigawatt-hours of U.K.
within-day and near-term electricity on Dec. 20, it said in an
e-mailed statement.
N2EX handled a record volume of 26.4 gigawatt-hours on its
day-ahead auction yesterday, Bloomberg data show.
European network operators may create a single price for
power across the U.K., central western Europe and the Nordic
region using quotes across all exchanges, den Ouden said.
"This new market coupling mechanism will produce a fully
consolidated U.K. day-ahead index automatically, because it
bundles the liquidity in the day-ahead auctions of all involved
exchanges, resulting in a single hourly price for the U.K.," he
said.
Methods to improve pricing signals from other power markets
may not benefit the U.K., European Energy Exchange AG CEO Hans-
Bernd Menzel said last week in London.
"It's not sufficient to use previous methods for the U.K.
market, it's not enough to use old copy-and-paste methods,"
Menzel said at a briefing with reporters. "There's too much 'I
do it better' comments from the current exchange providers," he
said. "They are just using old methods."
For Related News and Information:
Top Power Stories: PTOP <GO>
U.K. Power Prices: ELEU <GO>
--Editors: Rob Verdonck, Raj Rajendran
To contact the reporters on this story:
Catherine Airlie in London at +44-20-7073-3308 or
cairlie@bloomberg.net;
Lars Paulsson in London at +44-20-7673-2759 or
lpaulsson@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
(BN) Spain Power Debt Infects Enel With Sovereign Woes:
+------------------------------------------------------------------------------+
Spain Power Debt Infects Enel With Sovereign Woes: Euro Credit
2010-12-22 09:03:57.81 GMT
By Alessandra Migliaccio and Ben Sills
Dec. 22 (Bloomberg) -- Europe's spreading sovereign debt
crisis is making it tougher for Spain to pay electricity bills,
and that's infecting corporate bonds beyond its borders.
Enel SpA, the Italian owner of Spanish power company Endesa
SA, was put under review for a possible downgrade last week by
Moody's Investors Service because the Spanish government's
surging financing costs led it to freeze plans to repay 14.6
billion euros ($19.2 billion) owed to its utilities. Enel bonds
were the worst performers this month among the 50 biggest non-
financial issuers in Bank of America's EMU Corporate Index.
"The contagion between corporate and sovereign is already
happening," said Tom Sartain, a fund manager at London-based
Schroders Plc, who oversees $245 billion of assets. "The
instability of the sovereign is filtering through."
Spain's plan to sell government-guaranteed bonds to
reimburse power companies for regulatory subsidies was derailed
in November when the yield premium on Spain's 10-year debt over
German bunds surged to a euro-era high. The government must sell
192 billion euros of debt next year to finance maturing
securities and cover the deficit, complicating efforts to market
the additional bonds to repay the power companies.
Prime Minister Jose Luis Rodriguez Zapatero racked up the
debt by promising power companies more revenue than he allowed
them to charge customers. Under a system of state-controlled
prices, Spanish consumers have underpaid for electricity each
year since 2005 because rates are too low to cover all the
utilities' costs, creating a "tariff deficit."
Credit Rating
The decision to suspend selling tariff-deficit bonds has
weighed on other Spanish utilities. Standard & Poor's cut Gas
Natural SDG SA's rating one level to BBB on Dec. 17 and warned
it may lower the rating on Iberdrola SA, the country's largest
power company. Shares of Rome-based Enel have dropped 5 percent
this year, Gas Natural declined 22 percent and Iberdrola shed 9
percent, more than the 7 percent decline of the 31-member STOXX
600 Utilities Index.
The yield on the bonds of Endesa rose this month, signaling
further pressure on the debt of its parent company, said Neil
Beddall, credit analyst at Barclays Capital in London. The
premium investors demand to hold Endesa's 5.375 percent bonds
maturing in February 2013 rather than similar maturity sovereign
debt reached a five-month high of 157 basis points on Dec. 13,
before slipping to 156 on Dec. 20, according to generic prices
compiled by Bloomberg.
"Some of it should feed through to Enel," Beddall said.
"Ultimately, they are loosely correlated, they have to be."
Yield Spread
The difference in yield between Enel SpA's 4.25 percent
bonds due in June 2013 and government debt reached 128 basis
points on Dec. 20. That compares with a 94 basis-point spread
for German power company E.ON AG's 5.125 percent notes due in
2013.
Enel became Europe's most-indebted power company with its
purchase of Endesa. The company took on 12 billion euros in
borrowing last year to raise its stake to more than 92 percent.
Management has been selling assets and cutting costs to reduce
liabilities.
"Enel has done its part by reducing debt, running the
company well and sticking to its disposals program," said
Massimiliano Romano, an analyst at Milan-based Concentric Italy.
"They would be doing ok if it weren't for the Spanish crisis."
Chief Executive Officer Fulvio Conti said in a Dec. 15
interview that the delay in reimbursing Endesa won't jeopardize
the Italian company's goal of trimming debt to 45 billion euros
this year from 51 billion euros in 2009. The company doesn't
face big maturities in 2011 so it can wait for financial markets
to stabilize, he said.
Budget Deficit
"More than three quarters of our debt is fixed, long
term," Conti said. "We have no serious maturities in 2011, so
we aren't impacted by the financial turmoil. We are interested
in having a stable and possibly calm financial market. We are
still maintaining our credit rating."
Enel is paying the price as Spain struggles to rein in its
budget deficit, which equaled 11 percent of gross domestic
product last year. Moody's threatened to cut Spain's Aa1 credit
rating on Dec. 15, a day before the Treasury saw the cost of
selling 10-year bonds jump more than 80 basis points at its
monthly auction to 5.446 percent.
"The Spanish government has been unfortunate," said Helen
Francis, a senior credit officer at Moody's in London.
"Investors would normally say these are good assets, but
because the Spanish government has a lot of debt to refinance at
this time, the concern is that it may take a lot longer to
place" the bonds to reimburse the utilities, she said.
Risk Premium
The extra yield investors demand to hold Spanish 10-year
bonds over German bunds rose four basis points this week to 253
basis points at 9:50 a.m. today in Madrid. That compares with a
euro-era closing high of 284 basis points on Nov. 30.
Endesa is owed more than 7 billion euros, or about half of
the tariff deficit, while Iberdrola is due to receive more than
3.7 billion euros, Moody's has said.
The spread on Iberdrola's 3.5 percent bonds due in 2015
widened to 217 basis points on Dec. 20, the highest level since
April 2009, according to Bloomberg prices.
Spain's plan to help Iberdrola and Enel shore up their
balance sheets by selling as much as 18 billion euros of
government-backed power bonds runs counter to Finance Minister
Elena Salgado's aim of reducing issuance to limit the extra
interest investors are charging Spain to cover its budget
deficit. Salgado is trying to trim the country's net financing
needs of 45 billion euros next year by selling stakes in the
national lottery and the state-owned airports operator.
Marketing Aborted
Bankers at Goldman Sachs Group Inc., Banco Bilbao Vizcaya
Argentaria SA and four other lenders who were hired to sell the
tariff-deficit bonds for Spain had to abort their marketing
effort in November as Ireland became the second EU country after
Greece to seek a bailout, fueling investor concern that Portugal
and Spain would be next.
A spokesman for the Spanish economy ministry who declined
to be identified because of ministry policy said the government
will instruct the banks to proceed with the sale at the
"appropriate moment."
"Spreads remain high by historical standards, emphasizing
the need for Spain to strengthen financial market confidence in
the sustainability of government finances," the Organization
for Economic Cooperation and Development said in a Dec. 20
report. "If the high sovereign spreads persist, funding
conditions in the private sector could be affected."
For Related News and Information:
Top Italy stories: TOP IT<GO>
Top energy: ETOP <GO>
More credit market wraps: NI CMW <GO>
Top bond stories: TOP BON <GO>
Top credit news: TOP CM <GO>
Corporate bond new issue monitor: NIM <GO>
--With assistance from Esteban Duarte in Madrid, Bryan Keogh and
John Glover in London. Editors: Andrew Davis, Todd White
To contact the reporters on this story:
Alessandra Migliaccio in Rome at +39-06-4520-6320 or
amigliaccio@bloomberg.net;
Ben Sills in Madrid at +34-91-700-9603 or bsills@bloomberg.net
To contact the editor responsible for this story:
Will Kennedy at +44-20-7073-3603 or
wkennedy@bloomberg.net;
Reed Landberg at +44-20-7330-7862 or landberg@bloomberg.net
Spain Power Debt Infects Enel With Sovereign Woes: Euro Credit
2010-12-22 09:03:57.81 GMT
By Alessandra Migliaccio and Ben Sills
Dec. 22 (Bloomberg) -- Europe's spreading sovereign debt
crisis is making it tougher for Spain to pay electricity bills,
and that's infecting corporate bonds beyond its borders.
Enel SpA, the Italian owner of Spanish power company Endesa
SA, was put under review for a possible downgrade last week by
Moody's Investors Service because the Spanish government's
surging financing costs led it to freeze plans to repay 14.6
billion euros ($19.2 billion) owed to its utilities. Enel bonds
were the worst performers this month among the 50 biggest non-
financial issuers in Bank of America's EMU Corporate Index.
"The contagion between corporate and sovereign is already
happening," said Tom Sartain, a fund manager at London-based
Schroders Plc, who oversees $245 billion of assets. "The
instability of the sovereign is filtering through."
Spain's plan to sell government-guaranteed bonds to
reimburse power companies for regulatory subsidies was derailed
in November when the yield premium on Spain's 10-year debt over
German bunds surged to a euro-era high. The government must sell
192 billion euros of debt next year to finance maturing
securities and cover the deficit, complicating efforts to market
the additional bonds to repay the power companies.
Prime Minister Jose Luis Rodriguez Zapatero racked up the
debt by promising power companies more revenue than he allowed
them to charge customers. Under a system of state-controlled
prices, Spanish consumers have underpaid for electricity each
year since 2005 because rates are too low to cover all the
utilities' costs, creating a "tariff deficit."
Credit Rating
The decision to suspend selling tariff-deficit bonds has
weighed on other Spanish utilities. Standard & Poor's cut Gas
Natural SDG SA's rating one level to BBB on Dec. 17 and warned
it may lower the rating on Iberdrola SA, the country's largest
power company. Shares of Rome-based Enel have dropped 5 percent
this year, Gas Natural declined 22 percent and Iberdrola shed 9
percent, more than the 7 percent decline of the 31-member STOXX
600 Utilities Index.
The yield on the bonds of Endesa rose this month, signaling
further pressure on the debt of its parent company, said Neil
Beddall, credit analyst at Barclays Capital in London. The
premium investors demand to hold Endesa's 5.375 percent bonds
maturing in February 2013 rather than similar maturity sovereign
debt reached a five-month high of 157 basis points on Dec. 13,
before slipping to 156 on Dec. 20, according to generic prices
compiled by Bloomberg.
"Some of it should feed through to Enel," Beddall said.
"Ultimately, they are loosely correlated, they have to be."
Yield Spread
The difference in yield between Enel SpA's 4.25 percent
bonds due in June 2013 and government debt reached 128 basis
points on Dec. 20. That compares with a 94 basis-point spread
for German power company E.ON AG's 5.125 percent notes due in
2013.
Enel became Europe's most-indebted power company with its
purchase of Endesa. The company took on 12 billion euros in
borrowing last year to raise its stake to more than 92 percent.
Management has been selling assets and cutting costs to reduce
liabilities.
"Enel has done its part by reducing debt, running the
company well and sticking to its disposals program," said
Massimiliano Romano, an analyst at Milan-based Concentric Italy.
"They would be doing ok if it weren't for the Spanish crisis."
Chief Executive Officer Fulvio Conti said in a Dec. 15
interview that the delay in reimbursing Endesa won't jeopardize
the Italian company's goal of trimming debt to 45 billion euros
this year from 51 billion euros in 2009. The company doesn't
face big maturities in 2011 so it can wait for financial markets
to stabilize, he said.
Budget Deficit
"More than three quarters of our debt is fixed, long
term," Conti said. "We have no serious maturities in 2011, so
we aren't impacted by the financial turmoil. We are interested
in having a stable and possibly calm financial market. We are
still maintaining our credit rating."
Enel is paying the price as Spain struggles to rein in its
budget deficit, which equaled 11 percent of gross domestic
product last year. Moody's threatened to cut Spain's Aa1 credit
rating on Dec. 15, a day before the Treasury saw the cost of
selling 10-year bonds jump more than 80 basis points at its
monthly auction to 5.446 percent.
"The Spanish government has been unfortunate," said Helen
Francis, a senior credit officer at Moody's in London.
"Investors would normally say these are good assets, but
because the Spanish government has a lot of debt to refinance at
this time, the concern is that it may take a lot longer to
place" the bonds to reimburse the utilities, she said.
Risk Premium
The extra yield investors demand to hold Spanish 10-year
bonds over German bunds rose four basis points this week to 253
basis points at 9:50 a.m. today in Madrid. That compares with a
euro-era closing high of 284 basis points on Nov. 30.
Endesa is owed more than 7 billion euros, or about half of
the tariff deficit, while Iberdrola is due to receive more than
3.7 billion euros, Moody's has said.
The spread on Iberdrola's 3.5 percent bonds due in 2015
widened to 217 basis points on Dec. 20, the highest level since
April 2009, according to Bloomberg prices.
Spain's plan to help Iberdrola and Enel shore up their
balance sheets by selling as much as 18 billion euros of
government-backed power bonds runs counter to Finance Minister
Elena Salgado's aim of reducing issuance to limit the extra
interest investors are charging Spain to cover its budget
deficit. Salgado is trying to trim the country's net financing
needs of 45 billion euros next year by selling stakes in the
national lottery and the state-owned airports operator.
Marketing Aborted
Bankers at Goldman Sachs Group Inc., Banco Bilbao Vizcaya
Argentaria SA and four other lenders who were hired to sell the
tariff-deficit bonds for Spain had to abort their marketing
effort in November as Ireland became the second EU country after
Greece to seek a bailout, fueling investor concern that Portugal
and Spain would be next.
A spokesman for the Spanish economy ministry who declined
to be identified because of ministry policy said the government
will instruct the banks to proceed with the sale at the
"appropriate moment."
"Spreads remain high by historical standards, emphasizing
the need for Spain to strengthen financial market confidence in
the sustainability of government finances," the Organization
for Economic Cooperation and Development said in a Dec. 20
report. "If the high sovereign spreads persist, funding
conditions in the private sector could be affected."
For Related News and Information:
Top Italy stories: TOP IT<GO>
Top energy: ETOP <GO>
More credit market wraps: NI CMW <GO>
Top bond stories: TOP BON <GO>
Top credit news: TOP CM <GO>
Corporate bond new issue monitor: NIM <GO>
--With assistance from Esteban Duarte in Madrid, Bryan Keogh and
John Glover in London. Editors: Andrew Davis, Todd White
To contact the reporters on this story:
Alessandra Migliaccio in Rome at +39-06-4520-6320 or
amigliaccio@bloomberg.net;
Ben Sills in Madrid at +34-91-700-9603 or bsills@bloomberg.net
To contact the editor responsible for this story:
Will Kennedy at +44-20-7073-3603 or
wkennedy@bloomberg.net;
Reed Landberg at +44-20-7330-7862 or landberg@bloomberg.net
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