Domestic Policies and Private Sector Initiatives

• Defense Industry Daily's Joe Katzman has a great collection of links up on the impressively wide variety of steps the Pentagon is taking improve the military's energy security through increased efficiency and distributed, renewable power generation.

• Renewable Energy Access notes that the national Database of State Incentives for Renewable Energy (DSIRE) has recently expanded its database of energy incentives to include state and federal tax deductions for energy efficiency - just in time for The 15th.

• This knowledge-packed post from Lynne Kiesling discusses the difference between what politicians and the media refer to as 'deregulation' in electricity markets and what truly effective deregulation would look like, in the context of a recent discussion of the topic among Maryland policy makers.

• Both California and Massachusetts have decided to offer cash prizes in competitions for the best business proposal in the clean energy sector. The California Clean Tech Open invites entrepreneurs to compete for $50,000 in cash. Entries can come from one of five categories, including energy efficiency, renewable energy, and transportation technologies, and the winners will receive professional services in addition to the prize money. Applications are due by May 19th, and the finals will be held in late September. The Massachusetts competition, called the Ignite Clean Energy Competition is hosted by the MIT Enterprise Forum and offers $125,000 to the best clean energy business proposal in solar power, wind power, biofuels, waste energy recovery, and other technologies. The semi-finals are scheduled for April 11th, and the final competition will be held on May 9th.

Investments and Mergers

• In what some expect will touch off a wave of consolidation across the utilities industry, there have been several large merger deals completed recently, and several other ambitious attempts that are proving unsuccessful. In the latter category is the likely-to-be thwarted hostile attempt by Italy's Enel SpA to purchase Suez SA of France for $34.7 billion. In a move that highlighted the "national champion" status of both companies involved, France moved to merge Suez with Gaz de France SA (the French government owns an 80% stake in GDF), a combination that will likely be successful in blocking Enel's bid by creating the world's second largest power and gas supplier, which would be valued at around $83.27 billion. Here's the latest.

• A similiar situation surrounds the on-going bidding war for Spanish utility company Endesa SA. Germany's E.ON made an offer to purchase Endesa for $34.6 billion. Endesa's national cousin, the Spanish government-controlled Gas Natural SGD SA, then made a counter-bid worth only $27.5 billion, likely hoping for special treatment by the Spanish government to close their less-enticing offer. The latest news is that Endesa says the Gas Natual offer is too low and will not be successful as is. Stories like this and the one above will be interesting to watch as futher consolidation in the utilities industry conflicts with the national stakes some European governments hold in large utility providers.

• The merger mania isn't confined to Europe. In what would be the largest energy takeover deal in the Asia-Pacific region in over a decade, Alinta Ltd. offered to buy Australian Gas Light Co. for $8.9 billion. Alinta, Western Australia's largest natural gas retailer, pursued AGL Co. in order to tap power demand in the nation's east. Unfortunately for Alinta, AGL is nearly three times its size and has made a counter-offer of $2.7 billion for its would-be suitor.

• Falling into the category of successful merger deals is National Grid's purchase of Keyspan for $7.3 billion. National Grid Plc, a British company, already owns utilities in New York and Massachusetts, and will add Keyspan's 2.6 million gas customers to its operations as a result of the deal. National Grid also announced that it will purchase a Rhode Island gas distributor from Southern Union for $498 million, adding 245,000 Rhode Island customers - about a 50% increase over the company's existing customer base in the state.

• Renewable Energy Access reports that revised standards for market entry will likely result in an IPO boom in China. Though these revised standards are not exclusively related to energy IPOs, they may combine with plans to create a stock market especially for small- to mid-cap companies to produce a market environment conducive to newly-issued solar and other cleantech stocks. (Via Cleantech's Stories of the Week .)

• In US IPO news, two ethanol producers, Aventine Renewable Energy and VeraSun Energy, have filed with the SEC for IPOs. Aventine's deal is valued at $150 million, higher than VeraSun's valuation at $50 million. The market for companies that produce only ethanol is relatively young one - the first pure ethanol IPO, that of California's Pacific Ethanol, took place about a year ago, in March of 2005.

• Cleantech Investing has a nice recap of several recently-released annual surveys of clean energy investing, and all seem to indicate strong growth in the sector. Clean Edge values the market at $40 billion in 2005, representing a 33% growth over the 2004 market, with near 50% growth over 2004 in both global wind and solar markets. Likewise, clean venture capital giant Nth Power released (along with Clean Edge) it's annual survey of venture capital investments in clean energy, which reached $917 million - about a 28% growth over 2004 levels.

• Cleantech also offers a nice summary of the current state of the hydrogen venture capital market, along with several good reasons for why it isn't taking off the same way capital markets for solar and wind ventures are.

• Amid the buzz surrounding the Enron trial lately, it's interesting to note that a group of private equity firms and hedge funds seems close to purchasing Enron's international holdings. These assets include power generation plants, natural gas pipeline and distribution facilities and other energy distribution assets in Latin America, Turkey, Poland and the Philippines.

International Affairs

• The US and India signed a new partnership on nuclear technology during US President Bush's visit to India last month. As part of the agreement, the US agreed to share reactors, fuel and expertise with India in exchange for India's commitment to maintain rigid security standards. It was a historical vote of confidence in India, who had suffered internationally as a result of its decision to pursue nuclear weapons without signing the Nuclear Non-Proliferation Treaty. This post came to us via Dan Drezner, who likes the deal.

• Also during President Bush's recent visit, India pledged its participation in the FutureGen coal plant project. As a participant in the project, which is headed by the US Department of Energy, the Indian government will contribute $10 million in funding, and in exchange Indian companies will be invited to participate in the initiative. The aim of FutureGen is to produce the world's first coal-burning electricity plant that removes and sequesters carbon dioxide from its emissions while it generates electricity and commercial-grade hydrogen. The proposed plant is scheduled to begin operations by 2012.

• The Nigerian rebel group calling itself the Movement for the Emancipation of the Nigeria Delta (MEND) released the one British and two American oil workers they had taken hostage and vowed to end kidnapping. However, the group vowed to continue its campaign against the country's oil industry, which has resulted in a reduction of Nigeria daily crude of 26%, to 1.6 million barrels a day, since attacks on oil installations began in February.

• In a series of raids across the country in late March, Saudi Arabian security forces simultaneously arrested 40 suspected al-Qaeda operatives who seem to have been plotting a second attack on the Abqaiq oil facilities (via John Robb).

• The European Commission recently released a Green Paper with recommendations for a new EU Energy Policy, which urges members to continue to liberalise as well as decarbonize. Though the paper is only recommendation at this point, it gives a nice summary of a powerful school of thought presently developing in the EU.

• Some people thought it was strange when Germany's former chancellor, Gerhard Schroeder, took a position with Russia's energy giant Gazprom the day he conceded the German election, and I'll bet they find it even stranger that Schroeder apparently approved a secret E$900 million loan to Gazprom just before leaving office.