Solar & Rocks Running Hot

Australia should take a leading role in developing solar energy technology as part of the fight against global warming, the International Energy Agency’s chief economist says, while Tim Boreham is willing to bet the renewable energy sector will remain in vogue, no matter whether the Senate again kyboshes the carbon abatement laws or if December’s climate change summit in Copenhagen generates no more than hot air.

Peter Veness and Cathy Alexander in Sydney Morning Herald (21 October 2009):

Australia should take a leading role in developing solar energy technology as part of the fight against global warming, the International Energy Agency’s chief economist says.
“We need a major (solar) program, a collective program,” the agency’s Fatih Birol told AAP. “Australia has a lot of experience. In solar, Australia can also play a role.”
Speaking from Paris, Dr Birol said “solar energy has a very bright future” along with nuclear power.
He said solar was potentially an easier option because it “enjoys a lot of public acceptance”.
Even with large investments in both solar and nuclear, Dr Birol said the world would still need oil, but he warned it would not last.
“My main motto never changes, the era of low oil prices is over,” he said.
“When the economy recovers, oil prices will recover accordingly. Mid- to long-term we will be experiencing high prices.
“This may be bad news for all of us.”
Australia’s solar industry has had a chequered history, with some researchers and manufacturers heading overseas over the past 15 years due to a perceived lack of federal government support.
An $8,000 rebate for rooftop solar panels was scrapped this year and replaced with a less generous one.
A rebate for remote-area renewable energy projects has also ended, and a program to give grants of up to $50,000 to schools for solar panels and other energy-smart initiatives has been temporarily closed.
The government has promised to spend $1.5 billion on building up to four large-scale solar power farms, although the project may run into trouble due to uncertain investment flows from the private sector.
Just last month, a bid to build the world’s largest solar plant in Victoria was thrown into doubt after the lead company was put in receivership.
The $420 million project, planned by Solar Systems, was to have produced power for about 45,000 houses.
The proposed 154 megawatt power station would have used photovoltaic solar cells to magnify solar energy 500 times and deliver electricity to the national grid by 2013.
Source: www.news.smh.com.au

In the Criterion column of The Australia, Tim Boreham writes (23 October 2009):
WE are willing to bet the renewable energy sector will remain in vogue, no matter whether the Senate again kyboshes the carbon abatement laws or if December’s climate change summit in Copenhagen generates no more than hot air.
That doesn’t mean investors should buy them willy-nilly: there will be more commercial failures than successes. But with the feds poised to carve up $300million of renewable energy grants, it’s time to take notice of the more advanced plays.
In all, 36 companies have applied for a slice of the dough, available under the Renewable Energy Development Program (REDP). While a ministerial spokesbloke knows nothing, at least one applicant, hot-rock play Petratherm (PTR, 38c), says a decision is “imminent”.
According to the departmental guff, individual grants are likely to be between $50m and $100m.
Lest we assume Canberra is frittering away our taxes on no-strings-attached gifts, there are some onerous conditions that would preclude the poorly funded and less advanced.
According to the guidelines, the project has to be “relatively mature and at the stage of commercial demonstration” and has to be bankable. The applicant must be willing to chip in funding on a two for one basis.
Solar power was originally included in a $435m scheme, but was shunted into a wider federal program (REDP is but one of a dazzling array of state and federal programs).
It’s likely the government won’t bet it all on one technology but will spread it across geothermal, wind, biomass and wave energy applicants.
While we stress we don’t have the inside word, Criterion likes the chances of Petratherm and Geodynamics (GDY, 92c), which are the most advanced of the dozen or so listed hot-rock plays.
Geodynamics boasts the Innamincka joint venture (with Origin Energy) in Queensland, where it proposes to build a $275m, 50 megawatt demo plant.
Geodynamics has had trouble with unwanted gases in its well holes and drilling has slowed. In an update this week, the company confirmed its objective of getting to investment decision stage within 18-24 months.
Petratherm’s main project is Paralana in the Flinders Ranges, which is near the Beverley uranium mine, the most likely customer. The project boasts two sugar daddies: TRUenergy and Beach Petroleum.
Petratherm is also poking around Tenerife in the Canary Islands in pursuit of a conventional volcanic project to provide power to a population which surges to 1.5 million in the peak season.
Another interesting applicant is Carnegie Wave (CWE, 25c), which has already pocketed a $12.5m WA grant to develop a 5megawatt facility off Garden Island (the most likely customer is the HMAS Stirling naval base).
Carnegie’s patented CETO technology involves the use of seabed pumps, which is at least a more aesthetic alternative to visible turbines.
Criterion rates Petratherm and Carnegie as speculative buys and Geodynamics a hold. We’ve considered the latter to be overvalued in the past (and Innamincka is a long way from the nearest power grid). But the stock has retreated from a high of $2 and is worth a punt, especially if it pockets a slice of the REDP spoils.
STRICTLY speaking, Ceramic Fuel Cells isn’t a renewable energy stock, but its gas-fired version of so-called “distributed generation” delivers far more efficiency (and less carbon) than coal-fired electricity.
CFC has been a slow-burn story, but is entering a pivotal evolutionary stage as it obtains approvals to market its fuel cell units locally and abroad.
The BlueGen units, about the size of a dishwasher, convert normal gas into electricity, water and heat through a magical process involving layers of zirconia-based cells.
The heat is used to produce hot water. Carbon dioxide is also produced, but about one-third less than the coal-fired equivalent. The BlueGens also use only one-third of the energy relative to produce the same amount of electricity.
Locally, CFC expects to sell the units from next March, at a retail price of between $8000 and $10,000. The likely market are the eco-types who buy solar roof panels, but managing director Brendan Dow claims a superior payback period. A disadvantage is that BlueGen users will miss out on the government rebates available to solar customers.
CFC’s European strategy is different in that it has formed alliances with appliance makers, who build the units using CFC-supplied cells.
Dow says a crucial driver is how the power utilities embrace the concept: once they discover people can produce electricity more cheaply into their own home, there is the potential to cluster households into networks to supply baseload power.
CFC is still what one would politely describe as pre-revenue, but Dow promises “serious” turnover in a year’s time.
CFC lost $42m in 2008-09, including $19.5m impairments. Dow targets break-even cash flow by April 2011.
“The short-term vision is to sell lots of BlueGens and make lots of money,” he says.
CFC’s 8000 shareholders — many of whom are interested in buying a unit themselves — will applaud this charter.
CFC is a speculative buy. There’s potential upside in that CFC is suing a consortium of banks for $25m of losses arising from investing in financial instruments. The claim is backed by ubiquitous litigation funder IMF.
Source: www.theaustralian.news.com.au