Future Energy

Nevada Geothermal Power Inc.

                                     

                                      Source: Infinilec Earth Friendly Energy

Its been a month since I last posted and if you have been trying to follow my blog at all regularly, you have my apologies.  With an independent consulting practice, three children and my wife's career, sometimes I just can't juggle fast enough.  One result of the break though is I have a list of things I'm interested exploring in the confines of this blog including developments in the carbon markets, more from my travels in Australia, sustainable oil and gas and last but not least, geothermal energy.

In the past, I haven't paid too much attention to geothermal or the companies using geothermal resources to produce power.  However, yesterday I had the opportunity to attend a breakfast presentation given by Brian Fairbank, the President and CEO of Nevada Geothermal Power Inc. (TSX: NGP).  The session was organized by the Pacific Energy Innovation Association here in Vancouver and was part of a series the Association has been offering on "Climate Change on the Radar Screen".

Nevada Geothermal expects to complete its first power plant at Blue Mountain in Nevada by the end of next year, i.e. 2009.  To-date the company has successfully negotiated a 20 year Power Purchase Agreement with Nevada Power, completed its environmental assessment (FONSI) and received approval for its Large Generation Interconnection Assessment for up to 75 MW.  The company has also reached an agreement for Ormat Nevada Inc. (Ormat Technologies, NYSE: ORA), a leading geothermal developer and equipment supplier, to supply and construct the power plant. 

And with US$140 million in construction financing underwritten by the Glitner Bank in Iceland and Morgan Stanley (expected to close by the end of May), the company appears to be on the downhill slide to becoming an established geothermal power producer.

Looking to the future, Mr. Fairbank was able to lay out a convincing pipeline of projects, including:

• Pumpernickel Valley, Nevada
• Black Warrior, Nevada
• Crump Geyser, Oregon

And he even suggested some potential projects in B.C. (but he was speaking to a Vancouver crowd).

The stock, which is traded on the TSX and the U.S. over the counter market, is today at $1.10, roughly the middle of its 52 week range (52 week high/low: $1.34/$0.66).  See below for a chart.

Nevada Geothermal remains a company without revenues for now.  However, from what I saw yesterday, it seems a company worth watching.

Canadian Renewables Stocks

                                    

It took a while before I noticed it, but last month, Matthew Brown posted a summary of Canadian renewable energy policies on his Inter Energy Solutions blog (see, Canada Renewable Energy Policy, February 12th).

Looking at both federal and provincial policies, Brown gives a good summary of a growing body of policy support for renewable energy here in Canada.  While much of the policy is federal, driven by the government's halting attempts to address climate change, Brown suggests:

" ... some of the biggest action is happening at the provincial level, and the action there is new — mostly since 2004 and still developing. There, several provinces have adopted renewable energy portfolio standards or renewable energy goals. Manitoba, for example, has committed to 1,000 MW of new wind generation. Quebec has committed to up to 4,000 MW of wind generation. Ontario also has what is essentially a feed-in tariff for renewable energy, a bit along the European model. Through a feed-in tariff, renewable energy generators are guaranteed a market for their power at a certain price and certain terms. Solar photovoltaics can sell their power at 42 cents per kWh, for example. That’s a significant incentive. Beyond this, several provinces have funding mechanisms to support renewable energy."

And its all having an impact.  There is a growing list of renewable companies in Canada, including some that are publicly listed.  I'm providing a list of the publicly listed companies (and not much more right now) below.

    Canadian Renewable Energy Stocks         

Company	Symbol	Focus
Canadian Hydro Developers	TSX: KHD	Hydro, Wind, Biomass
Canadian Solar Inc.	NASDAQ: CSIQ	Solar (Photovoltaic)
Carmanah Technologies Corp.	TSXV: CMH	Solar/ LED Lighting
Finavera Power Corp.	TSXV: FVR	Wind, Wave
Innergex Renewable Energy Inc.	TSX: INE	Wind, Hydro
Maxim Power Corp.	TSX: MXG	Landfill Gas, Waste heat, Flare gas recovery, Cogeneration (and a coal fired power plant)
Naikun Wind Development Inc.	TSXV: NKW	Wind
Plutonic Power Inc.	TSXV: PCC	Hydro
Run of River Inc.	TSXV: ROR	Hydro
Sea Breeze Power Corp.	TSXV: SBX	Wind
Shear Wind Inc.	TSXV: SWX	Wind
Western GeoPower Corp.	TSXV: WGP	Geothermal
Western Wind Energy	TSXV: WND	Wind

Several caveats are in order:

• Finavera is Irish based but listed on the Toronto Stock Exchange and has many or most of its projects in Canada;

• Maxim Power is not just about renewable, it also has a coal-fired power project and several natural gas fired plants.  However, it also has a number of interesting renewable projects including waste heat and land-fill gas.

• Some (or all, depending on your point of view) of these stocks are speculative and none are provided as recommendations.

While all but one of the companies are project developers, rather than technology developers, they range from the well establsihed such as Canadian Hydro Developers to those such as Naikun Wind Development that are striving to develop an initial project.

And these are by no means all of the Canadian renewables industry.  There is still a wide range of private companies and there are a number of income trusts/funds (see Income Trusts: Canadian Green Energy Income Trusts, February 17th).

I don't think I missed too many of the publicly listed companies, but I would appreciate any comments or suggestions for adding to the list.

Canadian Hydro Developers Q3 Results Look Good

I recently wrote a short post highlighting the appointment of a new COO by Canadian Hydro Developers Inc. (TSX: KHD) (see Canadian Hydro Developers gets a New COO, November 4^th, 2007).  Well, earlier this week, the company also released its third quarter results to September 30^th and consistent with its track record for most of its 18 year life, the company continued to grow its capacity, output and revenues, all while remaining profitable.

KHD, a key Canadian renewable power generator, operates small-hydro, wind and biomass Ecologo® certified renewable power generating facilities in three of Canada’s provinces, B.C., Alberta and Ontario.  In all it has 19 facilities with 265 MW (net) of capacity and projects representing a further 403 MW’s of potential capacity in or nearing construction.   

Here's a quick comparison of some of its operating results for Q3. 

	Q3		Change %
	2007	2006
Electricity Generation MWh (net)	212,031	176,477	+20%
Revenues ($ 000’s)	14,344	11,729	+22%
EBITDA ($ 000’s)	7,765	6,818	+14%
Net Income ($ 000’s)	162	292	-45%

The Company attributes the decline in net earnings to foreign exchange losses in connection with a Euro denominated turbine purchase agreement and higher current taxes than a year ago.

Take a look for yourself.

Canadian Hydro Developers Gets New COO

This past week, Canadian Hydro Developers Inc. (TSX: KHD) announced the appointment of a new Chief Operating Officer, K. James (Jamie) Urquhart.  Mr. Urquhart replaces Ross Keating, one of the Company’s founders.  Mr. Keating, who was both President and COO will continue as President with Mr. Urquhart reporting to him.

Canadian Hydro Developers is one of Canada’s most mature alternative energy developers.  Unlike many of its peers, it provides investors with a pure play in renewable energy.  The Company currently operates 19 generating facilities, including 12 hydro, six wind and one biomass, with capacity for 265 MW of generation.  All of the operating facilities have qualified for Canada’s Ecologo®, certifying them as low environmental impact, renewable energy.

Over the past five years, KHD has grown its asset base almost four times and its revenues almost three times.  In the same period, it has also demonstrated the ability to operate at a profit for four out of five years (running a net loss in 2002).  The Company’s most recent quarterly statement (Q2-2007) indicates a 65% increase in revenues and a 127% increase in EBITDA over the same period last year.

 

Perhaps as a result, the stock price is currently $6.46 per share - down from the Company’s 52 week-high of $6.94 in May of this year but well up from less than $3.00 three years ago.

Canadian Hydro Developers, Stock Price for November 2004 - November 2007

Source: Globe & Mail ROB

KHD has shown steady growth and its website identifies a further eight development projects which could provide 384 MW additional capacity.  With all of that going on, the appointment of a dedicated COO looks like a smart move.

If you are interested in this diversified Canadian renewable-power generator, you may want to read some of the more recent commentary that has been provided by Richard Blackwell in the Globe & Mail:

1.       “Canadian Hydro Looks to Recapture Market’s Attention”, July 19^th, 2007

2.       “Cdn Hydro wins OMB Approval”, August 3^rd, 2007

3.       “Taxes Zap Profit At Cdn Hydro”, August 16^th, 2007

The Good, The Bad & The Ugly

197 Alternative Energy Stocks

Digital Dave writing today in the Alt Energy Investor blog provides an exhaustive list of alternative energy stocks.  He has organized the list into those that gained, those that stayed flat and those that lost.  It's not clear over what period gains and losses are measured, although, the list is organized in order from biggest gains to biggest losses. 

Each stock is linked to a company information page compiled on the blog as well as to a list that seperates companies by technology, including:

• solar
• hydro
• wind
• bioethanol
• biogas
• biodiesel
• waste gas
• geothermal
• hydrogen
• fuel cells
• energy storage
• carbon trading & financial
• diversified alternative energy

The top three stocks that gained value were Plug Power (18.18%) (NASDAQ: PLUG), Satcon Technology (14.75%) (NASDAQ: SATC) and Dynetek Industries (14.29%) (TSX: DNK).

The three biggest losers (is there a nicer way of saying that?) were China Sunergy (-6.67%) (NASDAQ: CSUN), Jackgreen Energy (-6.9%) (ASX: JGL) and Finavera Renewables (-10.64%) (TSX: FVR).

Take a look.