Special thanks to venue sponsor CLP and ASrIA member SAM for well received presentations on smart grids and prudently investing into the energy sector.
Erik Floyd, Joint Executive Director of ASrIA, welcomed participants and described ASrIA's mission to be the premier organisation for sustainable finance in Asia. He also introduced Dr. John W. M. Cheng, Manager of the CLP Research Institute. John offered an interesting overview of the major smart grid drivers and a clear description of the various characteristics of a smart grid. Next, he summarised the global trends in the smart grid space and the implications for the Asia-Pacific region. He concluded by highlighting CLP's smart grid-related initiatives, including the goal to have 21 electric vehicle charging stations by the end of this year.
Erik next welcomed Dr. Thiemo Lang, Senior Portfolio Manager of SAM. Complementing CLP's corporate perspective, Thiemo began by describing the energy challenges, arguing that structural changes will take decades, cost trillions of dollars, and be policy driven. These changes ultimately will result in the wider electrification of our societies.
Thiemo next described the scale of the energy-related infrastructure and how 2008 was the first year that new power generation investment in renewables was greater than investments in fossil-fueled technologies. He connected the investment needs of energy infrastructure and power generation with the sector's substantial impact on 'de-carbonizing' the world economy. To de-carbonize power generation, renewables will need to scale up; however, they need significantly more spending than the market anticipates.
Thiemo next walked us through the investment case for the sector, highlighting the performance of the SAM Smart Energy Fund benchmarked against the MSCI Daily TR Net World and S&P Global Clean Energy Index. He captured the investment opportunities by summarising five key growth trends:
- Solar: installed capacity growing 18% annually to reach 300GW by 2030
- Electric grid renewal: ability to incorporate the increased use of renewable in electric grids
- Batteries: Hybrid electric vehicles represents potentially a US$100 billion market for batteries
- Geothermal: installed capacity might triple by 2020
- LEDs: standard for mobile phones and significant potential in the general lighting market
Next, Thiemo described the four clusters in which the Smart Energy Fund invests: Renewable Energy, Distributed Energy Systems, Energy Efficiency, and Natural Gas. The last cluster is important to help transition from a fossil-fuel based economy to one based on renewables. He then described the portfolio's strategy, emphasising that the fund only invests in 'pure play' companies and not industrial conglomerates, such as GE, Siemens or Panasonic. He noted that three of the top ten holdings hail from Asia. He concluded his remarks by indicating the fund was attractively priced at 0.87x PEG ratio (2010) and had strong performance against peers.
A lively Q&A followed Thiemo's presentation, which was then followed by a relaxed atmosphere of networking.
Sincere thanks to CLP for their venue support, and to Drs. Cheng and Lang for their well received presentations as well as the valuable networking and contacts exchanged. |
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