Evolution responded to yesterday’s news that REG had raised £12 million of project finance against approximately 14 megawatts of wind farm developments by arguing that even the true value of the firm’s existing assets are not reflected by its share price.

And the broker reckons that its current target price of 90 pence for REG’s shares can be augmented as the firm submits planning applications for 140MW of new wind farms.

Yesterday, REG said that it had completed project financing for five operational wind farms. The 12-year project finance, covering 13.9MW of plant with a book value of £14.5 million, is being provided by the Co-operative Bank at a rate of 6.04 percent.

The bank has released £12 million of equity that, when added to existing resources, will provide Renewable with a total of £20 million for reinvestment.

“This proves REG’s assertion that [its] assets are highly ‘bankable’, and we expect to see... further funds raised from a second refinancing (circa £20 million) later this year,” wrote analyst Philip Sparks in a research note this morning.

Although Evolution does not see all of REG’s planned 140MW of new wind farms come through, it argues that “even a hit rate as low as 30 percent would see REG’s portfolio double in size”, and it expects that each 20MW of additional developments would add around nine pence to its discounted cashflow valuation of 90 pence per share for the company.

By 10:46am this morning, REG’s share price was up 0.8 percent at 47 pence.

Under the terms of the agreement with the Port of Dover, REG will install a 150kW Volvo Genset to supply a proportion of the Port's annual heat and electrical demand - at a fixed price for the first three years - which totals around 6-8MW. 

The heat and electricity produced makes the scheme eligible for two Renewable Obligation Certificates per MWh, REG stated.

Construction of the plant will start in December 2009 and is expected to be completed in January 2010.

"As energy efficiency and the environment become increasingly important to consumers, UK businesses are responding.  Our CHP systems allow businesses to demonstrate corporate responsibility, reduce costs and enhance energy security and reliability,” Andrew Whalley, CEO of REG, commented. “We are delighted to announce our first commercial CHP contract with the Port of Dover and to be able to demonstrate how the use of our biofuel-fired CHP technology can make a significant reduction to carbon emissions."

REG has a proprietary fuel, known as LF100, which is refined from used vegetable cooking oil recovered from local authorities, caterers and restaurant chains to produce renewable, carbon-neutral electricity.

As the non-renewable sources of energy that are fuel fossils have been depleting to put the mankind at risk along with polluting the environment, the demand for renewable solutions that would also reverse the harm done to the ecosystem, such as wind, solar, biomass and geothermal energy sources, has been at its highest.

These factors have contributed to the acceleration of the development of pollution control technologies, as well as technologies in energy efficiencies and energy storage, such as green buildings, smart grid, smart metering, light-emitting diodes, automation and control technologies and fuel cells and advanced batteries.

These areas, along with clean transportation, air pollution control, water and wastewater management, waste management and sustainable agriculture, are all targeted by the companies working in the clean technology or “cleantech” sector. PSQ opined that the drying up renewable energy sources as well as the need to “amend the atrocities committed towards the environment in the past” gives these businesses fundamentals strong enough to propel “aggressive” investment activity in the sector from both the public and private sectors with high demand being there to stay.

Cleantech currently offers opportunities with large upside for all classes of investors, including venture capitalists, private equity, institutional investors and retail investors looking for sustainable returns.

PSQ’s research report projected the sector to stand up to the challenges it faces, which include slow technology adoption, significant dependence on legislations and government incentives, and long project gestation periods in some cases, to deliver “exciting” long term returns.

While most of the historical growth of cleantech has come from the developed nations and their increasing energy demand, the developing countries such as India and China are likely to emerge as the key drivers behind its growth in the coming years.

China currently has plans to pour some US$180 billion into the sector over the next 15 years to eventually cover 20% of its total energy demand by renewable sources by 2020, while India aims to double its renewable energy generation capacity in the next four years and to quadruple the amount of biofuel mixed into gasoline and diesel by 2017.

PSQ concluded that this would make cleantech one of the few sectors that will engine the recovery in the global economy. To read the full report click here

Among the companies working in the sector and covered by PSQ are:

AFC Energy plc (AIM: AFC) is engaged in the design and development of alkaline fuel cell systems. The company's objective is to develop an  alkaline fuel system at a significantly lower cost than any other fuel  cell system while also achieving high efficiency. Its approach is to  take proven technology and re-engineer it to produce a lower cost
solution by exploiting characteristics such as low operating  temperature and pressure, and to use less expensive materials that  lend themselves to volume manufacturing.

The company's strategy for commercialization is to take the fuel cell  system to the hydrogen thereby avoiding issues of hydrogen transport. It has identified Chlor Alkali producers as the first target market. Initially it expects to sell fuel cell systems to customers but plans  to adopt an Energy Supply Company model for future revenues.

AFC has partnered with Akzo Nobel, a major international chemicals  giant, and the fourth-largest chlor-alkali producer in Europe. It has  delivered, installed and tested its first system for AkzoNobel.
Click here to read AFC Energy report


Romag Holdings plc (AIM: ROM) is a producer of specialty transparent composites to the renewable energy, security, architectural and transportation market. Included within the company’s laminate products are laminated solar panels that generate renewable energy from embedded photovoltaic cells. These laminates combine float and tempered glass, modern plastics technology and specialist inter-layers. The company is a leading participant in the Building Integrated Photovoltaic (BIPV) market, the fastest-growing segment of the PV market, via its PowerGlaz technology. PowerGlaz offers standard modules producing up to 235Wp per module.
Click here to read Romag Holdings report


Oxford Instruments plc (MM: OXIG) is a worldwide business, supplying high-technology tools and systems for the analysis and manipulation of matter at the smallest scale.  Its diverse markets include industrial analysis, research, education, space and energy. The company’s worldwide business supplies commercially successful, high-tech tools and systems into diverse markets (which include industry, energy, the environment, health and research).

The company’s expertise includes the creation of low-temperature and high-magnetic field environments; X-ray, electron and optical-based metrology; and nuclear magnetic resonance and advanced semiconductor processing technologies. Its products support those customers addressing the global issues of protecting the environment and conserving energy, health and safety.
Click here to read Oxford Instruments report


Energetix Group Plc (AIM: EGX) develops alternative energy solutions targeted at homeowners, the small commercial sector and the UPS market.
Click here to read Energetix Group report

Renewable Energy Holdings Plc (AIM: REH) develops, generates and commercialises clean energy across wind, wave, methane capture, solar and hydro power generation projects in North America, Europe, Australasia.
Click here to read Renewable Energy Holdings report


PowerFilm Inc (AIM: PLFM) is engaged in the development and manufacture of thin flexible solar panels using low cost proprietary production process.
Click here to read PowerFilm Inc report


Helesi (AIM: HLS) is a leading global manufacturer and supplier of waste containers for use in waste management industry and also engages in providing waste management services.
Click here to read Helesi report


Modern Water Plc (AIM: MWG) develops water technologies that help to address the global problems of fresh water availability and the treatment and disposal of wastewater.
Click here to read Modern Water report


Acta S.p.A. (AIM: ACTA) provides hydro generation products and associated fuel cell applications, besides undertaking research and development of innovative catalysts for renewable energy, carbon-free motoring, battery and industrial waste applications.
Click here to read Acta S.p.A. report


Helius Energy plc (AIM: HEGY) develops large (>60MW) and small (5-8MW) biomass plants in UK and sells these to operators while retaining a minor equity stake in them. It joined the AIM market in January 2007. The company has announced the three projects: – Project Alpha (65MW), Project Gamma (100MW) and 7.2MW plant located at Combined Rothes Distillers site. The company aims to develop more than 300MW of biomass plants by 2012.
Click here to read Helius Energy report


Hydro International plc (AIM: HYD) offers a wide range of products and services for control and treatment of stormwater and wastewater through the application of advanced vortex and complementary technologies.
Click here to read Hydro International report


Straight plc (AIM: STT) is a UK based supplier of container solutions for source separated waste. It was founded by Jonathan Straight in 1993.  The company is UK’s leading supplier of kerbside recycling boxes, compost bins, and water butts. The company’s primary market is the UK. The company primarily operates in the two business segments –Trade business and Retail business.
Click here to read Straight plc report


Sabien Technology Group Plc (AIM: SNT) is engaged in designing and installation of control systems to reduce energy use in private and public organisations.
Click here to read Sabien Technology Group report


Renewable Energy Generation Ltd (AIM: RWE) develops, owns and operates small wind energy plants and is also engaged in power generation from refined used cooking oil (UCO). REG operates through two main subsidiaries: The Cornwall Light & Power Co. Ltd and REG Bio-Power UK Ltd. The company recently sold its Canadian wind power business
Click here to read Renewable Energy Generation report

Hydrodec Group plc (AIM: HYR) is a UK-based company is engaged in re-refining, marketing and distribution of premium transformer oil by acquiring used transformer oil and re-refining it using a patented technology. The company sells its re-refined oil under the trademark name of SUPERfineTM oil.
Click here to read Hydrodec Group report

Shares in Renewable Energy Generation jumped 45% on the news.

It noted the announcements made by the Ontario Minister of Energy about a new Green Energy Act that will replace the existing RFP process and the company believes that this should lead to higher tariffs for its Canadian projects and accelerated implementation.  As a consequence, REG has brought forward    development expenditure on these projects.

The budgeted expenditure for the full year of £1 million on these projects has been incurred in the first half, which has impacted the operating results of the first half by approximately £1 million. These costs will not be repeated in the second half of the year and are within REG’s annual budget.

Renewable Energy Generation, a predominately wind power focused company with operations in the UK and Canada, announced that it had signed a 18 month, £20 million revolving credit facility with HBOS.  

The HBOS facility is in addition to a C$75 million, 15 year project facility secured with Fortis Bank last year, which was fully drawn down on completion of the company's Clear Creek Wind Farm in Canada.  
Today's debt facility will act to finance the group's operations while it completes longer term financing for three additional projects in earmarked for development in April 2009, the company said.

Andrew Whalley, CEO of Renewable Energy Generation, summarised:

"It is particularly pleasing to secure this financing, which is a testament to the strong growth in cash-flow which is coming from our successful development programmes in both countries.  

"We are now in a phase when successful development is being turned into a significant operating portfolio and we expect to have 100MW of plant operating by the end of this year, with continuing construction through 2010. We have been able to procure wind turbines quickly by using equity through construction before refinancing with long term debt. This has enabled us to build more quickly than would otherwise have been possible. The quality of our projects and Group balance sheet is reflected in the ability to raise finance in these testing times and we look forward to the continued growth of the Group."

Renewable Energy Generation currently operates seven wind projects in the UK with a total capacity of 21.3 megawatts.  In Canada, the company has a pipeline of over 5,000 megawatts of potential wind projects. The company also owns and operates a UK power plant fuelled by vegetable oil.