Introducing the Reuters Global Green Portfolio

April 28, 2009

As part of Reuters new Green Business section, we have chosen a diverse group of companies to serve as a proxy for the emerging green technology sector. Over the coming months we’ll be discussing each of them at length, and rebalancing our portfolio to reflect trends in the industry.

Click here to see our portfolio in action. You can track our performance against benchmarks, comment on our choices, and create a portfolio of your own.

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Comverge, Inc is one of the leading demand-response companies, known for their role in limiting electricity use during peak demand, employing technology to manage large companies’ power usage and control their costs. Their software can automatically adjust an air conditioner’s temperature or turn off a swimming pool pump when power supplies are tight, reducing prices for suppliers and end users by lowering end user demand at peak times.

Cree Inc manufactures light emitting diode (LED) fixtures, which consume less energy and last longer than incandescent and fluorescent lights. LED’s are experiencing increased demand as costs for power generation and concerns about greenhouse gas emissions rise, and Cree recently reported a third-quarter profit that topped Wall Street estimates on increased demand for ultra-efficient lighting,

LG Chem Ltd looks at first glance is an old-line industrial company with a petrochemical segment provides basic chemicals like polyvinyl chloride products, plasticizers, octanol, and butanol. But the company’s Compact Power unit is producing the lithium-ion battery for General Motors Volt plug-in, and the company is expected to play a central role as more hybrid autos roll out.

First Solar, Inc designs and manufactures solar modules using a thin film semiconductor technology. Its solar modules employ a thin layer of cadmium telluride semiconductor material to convert sunlight into electricity. The company has benefited from cost-conscious utilities’ efforts to buy more clean, renewable power through deals with Sempra and Edison International’s (EIX.N) Southern California Edison, and expanded its presence in the U.S. utility market in April with the acquisition of rival OptiSolar’s project pipeline.

Itron Inc makes smart meters for the electricity and water industries, which allow households to monitor their power usage while also sending the data back to their local utility. Utilities can then read meters remotely, saving the cost of a worker, a truck and fuel.

Energy Conversion Devices Inc makes lightweight, flexible solar laminates for rooftops and buildings that convert sunlight to electricity. Although the company was forced to slash its revenue outlook in March, executives argued that the company’s strong balance sheet and differentiated products would allow it to weather the recession better than many solar players. The company’s so-called thin film products are made from amorphous silicon and unlike traditional solar panels, do not rely on costly crystalline silicon as their primary raw material.

Ocean Power Technologies is developing water buoys that capture wave power. Based in New Jersey, the company is working with Spanish utility Iberdrola and various governments on wave power projects in Spain, the United States and the Orkney Islands and Cornwall in the UK.

Ormat Technologies is engaged in the geothermal and recovered energy power business. The Company designs, develops, builds, owns and operates geothermal recovered energy-based power plants, usually using equipment that it designs and manufactures. In 2008 the company bid over $3.5 million for rights to explore for geothermal energy beneath an active volcano near Alaska’s largest city.

Pacific Ethanol produces and sells ethanol and its co-products, and provides transportation, storage and delivery of ethanol through third-party service providers in the Western United States. Ethanol makers have suffered as the drop in gasoline and ethanol prices have outpaced the downturn in prices of corn, the main component of U.S. ethanol. Pacific Ethanol has three of its four plants idled in the industry slump and is in default on $230 million of construction-related term loans and $31.5 million in notes.

Q-Cells is the world’s largest maker of solar cells. The company said it saw business pick up in March, signaling it may have passed the worst of the crisis that has hit the sector. Solar stocks have skyrocketed since March on optimism about government efforts to stimulate demand for the clean energy source, but analysts warn that with earnings season beginning, investors in the high-flying sector are in for a strong dose of reality.

SunPower Corp SunPower Corporation is a vertically integrated solar products and services company that designs, manufactures and markets high-performance solar electric power technologies. Makers of solar panels were virtually unscathed by the economic downturn until late last year, when funding for all types of projects dried up, green ones included.

Suntech Power Holdings Co. is the top Chinese solar panel maker, which designs, develops, manufactures and markets a variety of photovoltaic (PV) cells and modules. Shares of Chinese solar companies have been among the biggest gainers since China said in late March that it would launch a generous subsidy for solar power systems.

Suzlon Energy Ltd of India is one of the world’s largest producers of wind turbines. The company said in February that sales of new U.S. wind power generation in 2009 will probably be half the record 2008 level as the financial crisis paralyzed cash flows to new wind farms. Development of new wind farms has slowed sharply in recent months as banks suffering from the global credit crisis shut off the flow of money for new projects.

MEMC Electronic Materials makes silicon wafers for the semiconductor and solar industries. The company said last week that although prices for polysilicon wafers remained far below levels seen recently — prices went as high as $500 a kilogram last year due to a shortage of the material in the burgeoning solar industry -0- demand began to show some signs of improvement in the early part of the second quarter.

8 comments

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Kudo Reuters! You have been avante-garde for many years and your “Green Business” section is merely one more example!

Your proxy of companies is impressive but all with an industrial focus. ‘Green’ concerns are reflected in customer purchasing habits and these companies listed are removed from the individual expereince.

I am an Environmental Communications Officer and I help market ‘green’ concepts for daily use. Letting people know that they don’t have to join Greenpeace or install a wind farm in their backyard to be concerned about the environment – is an essential ‘grassroots’ approach. Little choices daily make a huge difference. Let’s say that you are a company selling re-usable coffee mugs – they make a huge difference by allowing each individual consumer the ability – daily – to save the planet – garbage, energy, and resources. The general public realizing that the power is in their hands – everyday – in nearly every action they take – a coffee, a bottle of water and turning out the lights – is just as effective, if not more than covering your roof with solar panels. Environmentalism has to be in the hands of the individual for it to become commonplace.

I am not criticizing just adding a valid point. Thank you for your efforts and keep up the good work.

Posted by Tim Balazs | Report as abusive

Why no fuel cell companies? Ballard Power would be an obvious necessity on any Green index. Solar is fine, but there will be no solar cars or buses. There are already fuel cell cars and buses. Love the new green index. But get some hydrogen in there. Thanks.

Posted by Jason Thomas | Report as abusive

Ethanol? Green? Really? First of all, it’s a hydrocarbon fuel, so it still yields heavy CO2 upon combustion. Second, it takes more energy and resources to make ethanol from corn than you get back out of it (Tractor fuel, fertilizer and ag chemical production, processing, etc.). So you’re burning it all twice. That’s why it only works under heavy government subsidy. Measuring ethanol business performance tells investors nothing about green business or sustainable performance. Not related.

Posted by Reynold Collins | Report as abusive

The above post is right. I count 6 solar companies on this relatively short list. No fuel cell or hydrogen. The index is a good idea, but I think they had a grad student in ‘popular accounting’ put together the list,rather than anyone with a technical background. You simply can not have a green index without a hydrogen or fuel cell component. That is a serious gap.

Posted by Evyline Maer | Report as abusive

I like that Reuters has a Green Business section. However, I’m extremely disappointed by the removal of the Environment section in the news. All the Green Business articles seem to focus on the business of going green, but I want news on environmental science and environmental technology developments. Your Environment section was a vital part of my reading and I keep looking for it on the left, like a sibling that’s just passed and I’m not used to the void yet. Please resurrect the Environment section! I understand putting the Business of going Green up in the Business section. Just please bring back the Environment.

Thanks & take care,
Anna (Portland,OR)

Posted by Anna | Report as abusive

Anna, thanks for your comment.
We actually still have the Environment section. It is located lower down on the Green Business page below the Reuters Global Green Portfolio.

Posted by Josh Hargreaves | Report as abusive

Thanks all for your feedback. Just to give you some perspective on our thinking, we were trying to pull together not only a broad array of technologies, but also geographies with this list. Each of the solar companies represents a distinctive technology or market, and all of them are producing commercially. We will take the fuel cell suggestions into consideration.

Posted by Nichola Groom | Report as abusive

What I like about this new index is that it is international, which reflects modern trading and investment practices. A few tweaks here and there, based on the recommendations above, plus a few added small-cap companies (which would better represent the sector overall) and this could be a cited index.

Posted by Robert Stillwell | Report as abusive

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