Wednesday, May 27, 2009

Spire Solar - Nanophotovoltaic Device Patent.

Spire Receives U.S. Patent for Nanophotovoltaic Devices

This patent is for nanophotovoltaic devices formed from silicon or gallium arsenide having sizes in a range of about 50 nanometers to about 5 microns, and method of their fabrication.

Although there are a number of applications, the patent describes one application which is to inject nanophotovoltaic devices into diseased tissue, e.g., cancerous tissue, and activate these cells by the use of suitable radiation. These cells will generate electric fields in the tissue, causing a disruption of the cancerous cells.

Another day, another neat Solar Tech Announcement.

Spire is an interesting company. They don't seem to get much notice, but they've been around for a very long time. The present CEO, Roger G. Little, founded the company in 1969. He's a Physicist / Ironman Triathlete, and is surely tough as nails by the fact that he's stuck with a business like Solar Energy for so long; through so many years of very unfriendly market conditions. In addition to Solar, Spire has several Medical and Semiconductor Technologies that they produce, and so this new patent seems like a nice little fit between the several divisions of the Company.

Sunday, May 17, 2009

Calculation Central.

One of the fun things that I have been enjoying doing for this blog is to run various calculations that in some way apply to Solar Energy, or Energy in general. Since these things tend to get lost down the blog history, so I've decided to keep a reference to them here.

Note: I would consider all of these to be rough. Since I am typically looking at very general cases, I make assumptions. As much as possible, I try to point out the assumptions in the detail of the article.

Also, I'm typically choosing some specific variable or variables to focus on, so I am probably not calculating exactly what you are looking to know. However, hopefully that doesn't mean that my work isn't some value in giving direction in possible ways to look at a problem and to work out a reasonable solution.

Selected Calculations:

So, you want to buy a solar plant, part 2.

Description: Extends Part 1 by correcting for panel degradation and inverter losses.

So, you want to buy a solar plant.

Description: A rough start at a look of Calculating a Levelized Cost of Energy (LCOE) for Solar.

Part II : Percentage Land Area required for 100% Replacement of 2006 Energy Demand.

Description: State-by-State comparison of Total Land Area required in order to replace 100% of that State's Electricity Consumption.

Percentage Land Area required for 100% Replacement of 2006 Energy Demand.

Description: State-by-State comparison of Total Land Area required in order to replace 100% of that State's Energy Consumption.

For the Survivalists: How much gasoline is one Solar Panel worth?

Description: Comparison between the energy output of typical modern Solar Panels to the energy contained in a Gallon of Gas.

How much is 1% in efficiency worth in Solar?

Description: Discussion of Diminishing Returns in Increasing Conversion Efficiency.

Does Solar Tracking make sense?

Description: Comparison between a Stationary and a Tracking Installation, discussion of potential advantage of tracking in Energy Output.

Real World Estimation of Land Use per Watt - Sunpower

Description: Land Use Scenario using Tracked Sunpower Modules. Expands upon Solar vs Coal, Land Area Comparison, below.

Solar vs Coal, Land Area Comparison, below.

Description: Comparison between Kentucky Coal Output to potential Kentyucky Solar Resource. Ideal Situation. Expanded on in Real World Estimation of Land Use per Watt - Sunpower , above.

A Note on Units of Energy and Insolation.

Description: Description of the concept of Insolation, and description of a rough way to use Insolation as a basis for Annual Solar Energy Output.

Looking forward to 2020.

Description: Scenario for 2020 making assumptions based on 15% replacement of Fossils by Renewables by 2020. Assumptions are very optimistic.

Coal / Solar Cost Comparison - Final Draft.

Description: Comparison between Coal and Solar Costs over the long term, assuming various rates of Inflation. Written prior to Economic Crash, so certain Assumptions should be reworked.

Wednesday, May 13, 2009

Idle Speculation... Counterparties, Derivatives, and Hedging.

I work with a fellow, incredibly sharp, and very well versed on finance with a focus on hedging.

Today we were talking.

He talks about how basically everybody is hedged in all of these ways, so that they'll be assured of returns within some particular range. For instance, a bank doesn't care about whether you pick a fixed or a variable interest rate, because as soon as they make the deal, they're going to hedge it with derivative deals designed to make sure that returns over the period of the loan are within an acceptable percentage range, irrespective of what happens to actual interest rates over that time. Well, it seems that everything works out great as long as none of the hedging Counterparties go under. At that point, you have to have another layer of hedge to insure you against counterparty bankruptcy. Soon enough, it becomes a pretty ugly web of dependent hedging relationships.

Another example would be in the case where you might write, say, 1000 Naked Call Option Contracts on some company. You don't have the shares, but you've just offered to sell 100,000 shares to the Call Buyers IF the price of the stock is above a particular "strike price." At the Option's Expiration Date, if the Calls ended "in the money," then you'd have to buy and deliver a huge number of shares, and you'd take a very large loss on the deal. Well, to protect from losses, you can simply buy a swap from a counterparty, which basically insures you against loss in the case that you had to deliver shares. Having just paid a premium to a counterparty, however, and by putting THEM on the hook for your potential losses, you are giving that counterparty incentive to support your interest in whatever way they can; to keep your calls "out of the money." Of course, your counterparty isn't going to just go on the hook for your losses without a hedge, so they might very well bring another counterparty in on the deal, and so on. In such a way, there could potentially be incredible amounts of money riding on the success or failure of even a small public company, and nobody outside of the loop would have any way of knowing about it. These side deals would all be private arrangements, and they wouldn't leave a tick on a chart.

Well, my first impulse was to suggest that in such a situation, a share price could not move freely because of all the pressure put on it by its associated Derivatives, but my friend corrected me, and suggested that, no, the shares could move to reflect fundamentals IF the Derivatives were in balance in both directions. Of course, normally there would be Financial interests sitting on the other (long) side of the deal. Some of these interests would be the same ones that were placing the original short bets, and long interest could be used as a hedge in and of itself. However, it's not the normal case that I'm worried about. The case that I'd be worried about would be one in which a significant chunk of Wall Street were on one side of a trade, and they eventually had to take their losses and test the fitness of their counterparties. Really, it wouldn't have to be Call Options in particular, it could be the Derivative Hedging of Short Sales, or Naked Short Sales of a target company, that could create a systematic counterparty risk in the case of a big, unexpected price movement.

Last, imagine that you are at a company involved in Investment in the Stock Market, and you are involved with various and sundry counterparties in hedging deals. Imagine that you look at a stock or industry that seems like a promising prospect for future growth. What would you do if you found that your counterparties would take big losses if you went and did something to drive up the price and profit from the long side? Well, at the very least you'd think very carefully about whether it would be worth it to blow up your own counterparties by buying those shares.

I don't know... it's just Idle Speculation.