Wednesday, November 18, 2009
If you read the print edition of the Wall Street Journal, there is an interesting juxtaposition of articles that says a lot about energy in this country today.
On page B4 is an article by Rebecca Smith about the new trend among traditional power companies (AES, Duke, Progess Energy) to JV with, or seek financing from, China. In AES's case, the company recently sold a 15% stake in the company to the Chinese sovereign wealth fund.
Smith notes that, in 2011 and 2012, energy companies have $100 billion in debt coming due that needs to be refinanced and banks may or may not be lending on that scale, so China is a palatable option.
Another interesting point in the Smith article is a quote from Duke's Chief Technology officer that states that the Chinese can build a coal-gasification plant in three years when it takes Duke and other US companies six. Is that due to superior technology and resources or does it stem from the regulatory requirements heaped on US companies?
Now for the juxtaposition....
On the facing page, page B5, Jerry DiColo has a piece about solar panel manufacturers cutting out local distributors and setting up relationships with teams of installers in local markets to sell and promote its brands.
This represents an invesment in local American companies that is possible, no doubt, because the panel manufacturers don't have the crushing debt load coming due that large energy companies do, and because they can count on a stimulus-bump in panel consumption.
Either way, it's a fairly stark portrait of two sectors within the energy industry going in two different directions....
U.S. Power Companies Seek Out Chines Allies [Wall Street Journal]
Solar Panel Makers Seek Local Ties [Wall Street Journal]