Long term investors, who like to dig into company details and fundamentals, might find some value in the emerging alternative energy sector (only if you like to speculate and are in it for the long haul).
Reasons 1) We are in an energy hiatus ... how long it will last is unpredictable ... only 3 months ago everyone was reaching for their alternative energy booster packs and now it is all on the backburner.... future demand for energy is a certainty, based on population growth and development of emerging nations. 2) Developing clean energy resources isn't optional .. it can only be postponed for so long. 3) Governments are funding development (follow their dollars). I did some intitial research, on a slow Sunday, a while ago. I am not following any long term investor strategies, at the moment, so I didn't follow up. Ed's post, on his gas acquisitons, reminded me I had forgotten to post the info. A few Ozzy examples (small by USA standards).... not recommended but indicative of what is on offer.... parallels should be available in other markets. Search further afield, and dig into the research, and some gems should be forthcoming. Some categories that caught my eye ... not a complete coverage of the areas that are opening up. a) Geothermal power Silver bullet solution. Unproven anywhere in the world. Involves pumping water into deep wells, drilled into hot geothermal rock, then recovering the steam generated and using it to run power producing turbines. Technical difficulties to overcome include maintaining ground to surface steam supply, correlated to generating demand, and keeping the pipes open (no solution as yet to the possibility that rock fissures will become encrusted, and blocked, with mineral scale from minerals that go into solution). On the plus side the above ground generating technology is standard procedure. IMO the risk is above par (technical difficulties) but the rewards are blue sky if they bring home the bacon. Australian example: Geodynamics Ltd (GDY.AX) http://au.finance.yahoo.com/q/apr?s=GDY.AX http://www.geodynamics.com.au/IRM/content/home.html (follow the link to their site for an explanation of the method and their current report). - amongst the best reserves in the world - large heat sinks closer to the surface than other global sites - water supply is a problem - located at a distance from major user centers so distribution costs are higher - they will probably put their hand out for govt assistance with water and distribution (likely to get it as it is trendy project) - borrowing AUD 200M, so far - partnership with Australian energy major (Origin Energy) - test wells report good results - demo 50MW (baby) generator 4 years away and plenty of spending to do before then - collaborating globally including with USA peers - financial feasibility studies not published b) Carbon energy providers morphing to mixed energy suppliers The low risk option smart operators will be winners. Australian example" Origin Energy http://au.finance.yahoo.com/q/apr?s=ORG.AX Former carbon energy major with developing interests in alternative energy e.g. geothermal and solar panels (they claim to have superior solar panel technology in pilot plant production some units sold likely to scale up to full scale production). The type of company with the size and connections to take advantage of middle of the road political objectives, and hence govt grants e.g. a solar panel on every Australian roof by 2030? Also involved in Coal Seam Gas production http://www.originenergy.com.au/about/files/CSGQld.pdf c) Coal Seam Gas Known technology (even Russia has one that has been working for years) formerly unfashionable and under-utilized method. Capable of sneaking onto the energy leader-board in the next decade or two but unlikely to receive a lot of headline publicity, except on the finance pages. Australian example: Queensland Gas Company http://qclng.com.au/ http://au.finance.yahoo.com/q/apr?s=QGC.AX d) Clean Coal Techology The target of environmental protests but this is actually our best option for the environment (economically achieveable). Politically and economically correct (at least in China, India, USA and Australia also other countries with the bulk of their power coming from coal or who don't have oil reserves). Large proven reserves still available. Quantum technical leap is only required in some phases of use and not beyond reach. Carbon emission reductions are not as spectacular as some emerging technologies but they are significant. Can be grafted onto current technology and production. In the future it will be seen as clean and green. A long way ahead of carbon sequestration which is a band aid solution for existing coal fired power plants. Less environmental risk in coal transportation than oil transportation. Coal deposits are closer to major population centers in most countries that have coal deposits? Efforts are focused on coal `washing' or dissolution to leave ash and waste products behind prior to burning to produce energy for power generation. Any company that comes up with a step improvement, from out of left field, will clean up bigtime. That isn't in sight but some baby steps are being made. Australian example: Felix Resources (FLX.AX) - 20 to 30% step efficiency gain in energy utilization - potential step gains in CO2 capture (emissions are cleaner and easier to scrub - plugs into existing technology for generation - suits smaller scale deployment - off the shelf solution - sharing development with Mitsubishi to use existing gas turbines or a mod thereof - pilot plant up and running - product is pelletized coal (easy to transport and deploy at site) http://au.finance.yahoo.com/q/apr?s=FLX.AX http://www.felixresources.com.au/?p=14 Keep in mind that everyone wants greenhouse gas reductions but no one wants to pay for them ... politically favoured projects (winners?) will have to do the job at cost! brian_z
