Alternative energy sources look attractive as oil nears $100 a barrel

The rise of the oil price, to over $90 a barrel, has forced an upsurge of interest in companies developing alternative technologies for power generation. Within the emerging markets, a number of organisations are exploring applications which allow the conversion of energy from the sun into electricity. While the technology which allows energy transfer is relatively expensive to produce, it has the advantage of being pollution-free and low cost to operate. Development has been helped by target-setting and subsidies from governments around the world including South Korea, Japan, Germany and the US. Many incentive schemes focus on offering pre-agreed tariffs for energy produced and fed back into a national grid system from renewable sources.

According to Chris Palmer, Head of Global Emerging Markets at Gartmore, “There are a lot of players in the solar technology arena. We recently added Suntech Power Holdings, China’s largest solar cell module maker, to our emerging market funds. Suntech has a long track record and the lowest non-silicon manufacturing costs of its peers. We believe it also has a significant intellectual property advantage with its ‘Pluto’ initiative. This technology offers the prospect of introducing higher energy conversion efficiency into the generation process. “

Both the Gartmore Emerging Markets Opportunities Fund and the Gartmore SICAV Emerging Markets Fund hold Motech Industries, Taiwan’s largest solar cell producer, and Korean construction materials company KCC, currently preparing for mass production of polysilicon, the material used in solar cell production.