Saturday, August 15, 2009
The Space Looks Good
This is a buy here as many stocks are. I am still advising to not buy stocks until a bottom is placed over 10000 on the Dow, but still should see nice growth if you don't wait.
Friday, February 13, 2009
Could Ormat be the next monster stock?
Take a look at the newest announcement from ORA, they are a true green company. They have just brought two of the four scheduled recovered energy generation plants on line. One was brought on line two months ago and the other one month ago. These use waisted heat from already generating turbines into energy. This process is somewhat like the geothermal energy taken from the earth in areas where there geysers. This is very important as ORA's current technology is getting better and this has enabled them to use heat in a much better and efficient way. The project plants are a test run to see how well ORA can piggy back current plants to use heat generation from any plant using non renewable sources and garner more electricity from the process. I would keep watching this, as every plant in the world that uses natural gas or coal will be able to use energy more efficiently, and if ORA can make this cost effective, they will see alot of demand.
Sunday, February 8, 2009
INVESTING IN THE GEOTHERMAL STOCK ORMAT TECHNOLOGIES INC.
Many an investor has given up on the energy play. As oil has buckled, alternative energy stocks have been hit. The reason the fossil fuels are so attractive, isn't their appeal but because their usage can be day or night and does not rely on the weather for generation. It stands to reason that investment will suffer somewhat with respect to clean technologies, but oil at $100 a barrel or even $60 will make it conceivable for increased development. I do believe that solar and wind look good, but other technologies have flown under the cross-hairs of politicians and that can be good for those that have less popular views. Geothermal has had little by the way of media. The belief with this technology is that it is only feasible in areas that have plentiful underground heat. It is also believed that the technology is too expensive. These two facts are becoming myths as technologies have gotten better.
ORA looks to be ahead of the game as they are just starting to realize their potential. Locked down through misguided beliefs and the lack of AAPL's "sex appeal", it has opportunity written all over it. An article in Forbes these opportunities are becoming a reality. The two largest limitations to the use of this technology is geology itself. The heat below the Earth's surface is either to far down to get to, or it lacks the hydration necessary to bring the heat to the surface. But limitations may cease to exist in upcoming years. Many locations are to deep, but new technologies are offering the ability to drill deeper and through more rigid layers. These technologies are being used by current companies drilling for oil and natural gas, and could be used to tap heat sometime soon. Before new technologies a hole is drilled near a geyser and a valve and turbine are placed on the hot water. Since the heat is so near the surface very little needs to be done. New technologies drill deeper into the ground and then water is pushed into the well and it is forced out of other surrounding wells.
ORA and UTX have developed low temperature turbines that can generate power from temperatures as low as 200 degrees Fahrenheit, which is half that of older ones. In 2007 MIT did a study that stated geothermal heat could produce electricity at 15 cents per kilowatt hour. They estimated the price could drop to 5 cents. This new estimate makes it very competitive. Geothermal investment was up 83% last year and looks to continue to grow. ORA currently estimates that it will add a tenth of a gigawatt of capacity this year and should continue to average that in upcoming years. They currently have .4 gigawatts of capacity, so you can see the type of growth they are experiencing.
Current geothermal energy solutions are being honed and refined every year. The main idea is to make it cost effective. ORA's plant Galena 2 in Nevada offers clean and reliable energy, but most importantly sustainable. Their recovered energy generation plant in North and South Dakota named OREG 1, provides cost efficiency as it is unmanned. ORA has customers in 71 countries and counting. They currently have 20 geothermal plants, 6 recovered energy generation plants, and over 60 remote power units.
Power generation generates approximately 73% of revenues and 81% of operating income. They currently have 374 MW of power generation. 116 MW are currently under construction. Developmental stages have up to 148 MW. Recovered energy plants currently have 22 MW but another 24 MW are in construction and developmental stages. Power is very stable as they operate under long term contracts. Their products division has 75 patents with respect to electrical generation. Current potential geothermal resources are vast. Many of these are near volcanoes, geysers and fault lines. This is why much of the current 2850 MW of installed capacity is on the West Coast. Currently, Asia is the only continent with more at 3291 MW. Their potential capacity in the next twenty years could reach 42000 MW, while North America's potential is 30000 MW. North America could have up to 100000 MW of potential if enhanced geothermal systems are use. With traditional geothermal systems the world's potential is 148000 MW in the next two decades. Installed systems total 9500 as of the end of last year. Most importantly is the fact that they are the only methods that are as cheap as fossil fuel electricity. Recovered energy generation is cheaper than coal and geothermal is the same price under current means of production. This is with geothermal being as environmentally friendly as solar.
Growth with respect to geothermal will be driven by higher energy prices, the possibility of global warming, and the fact that the majority of energy comes from unfriendly countries. ORA has planned for growth in their power segment. This has a CAGR of 17% from 2006 to 2009 estimated. In 2003 ORA had a total of 242 MW in production, and they plan to have increased this to 626 MW by 2009. From 2003 to 2006 their revenue grew 34% CAGR. Adjusted EPS grew 14% CAGR over the same period. Adjusted EBITDA growth was 41% from 2003 to 2006. This is also one of the few pure geothermal plays that are public.
ORA looks to be ahead of the game as they are just starting to realize their potential. Locked down through misguided beliefs and the lack of AAPL's "sex appeal", it has opportunity written all over it. An article in Forbes these opportunities are becoming a reality. The two largest limitations to the use of this technology is geology itself. The heat below the Earth's surface is either to far down to get to, or it lacks the hydration necessary to bring the heat to the surface. But limitations may cease to exist in upcoming years. Many locations are to deep, but new technologies are offering the ability to drill deeper and through more rigid layers. These technologies are being used by current companies drilling for oil and natural gas, and could be used to tap heat sometime soon. Before new technologies a hole is drilled near a geyser and a valve and turbine are placed on the hot water. Since the heat is so near the surface very little needs to be done. New technologies drill deeper into the ground and then water is pushed into the well and it is forced out of other surrounding wells.
ORA and UTX have developed low temperature turbines that can generate power from temperatures as low as 200 degrees Fahrenheit, which is half that of older ones. In 2007 MIT did a study that stated geothermal heat could produce electricity at 15 cents per kilowatt hour. They estimated the price could drop to 5 cents. This new estimate makes it very competitive. Geothermal investment was up 83% last year and looks to continue to grow. ORA currently estimates that it will add a tenth of a gigawatt of capacity this year and should continue to average that in upcoming years. They currently have .4 gigawatts of capacity, so you can see the type of growth they are experiencing.
Current geothermal energy solutions are being honed and refined every year. The main idea is to make it cost effective. ORA's plant Galena 2 in Nevada offers clean and reliable energy, but most importantly sustainable. Their recovered energy generation plant in North and South Dakota named OREG 1, provides cost efficiency as it is unmanned. ORA has customers in 71 countries and counting. They currently have 20 geothermal plants, 6 recovered energy generation plants, and over 60 remote power units.
Power generation generates approximately 73% of revenues and 81% of operating income. They currently have 374 MW of power generation. 116 MW are currently under construction. Developmental stages have up to 148 MW. Recovered energy plants currently have 22 MW but another 24 MW are in construction and developmental stages. Power is very stable as they operate under long term contracts. Their products division has 75 patents with respect to electrical generation. Current potential geothermal resources are vast. Many of these are near volcanoes, geysers and fault lines. This is why much of the current 2850 MW of installed capacity is on the West Coast. Currently, Asia is the only continent with more at 3291 MW. Their potential capacity in the next twenty years could reach 42000 MW, while North America's potential is 30000 MW. North America could have up to 100000 MW of potential if enhanced geothermal systems are use. With traditional geothermal systems the world's potential is 148000 MW in the next two decades. Installed systems total 9500 as of the end of last year. Most importantly is the fact that they are the only methods that are as cheap as fossil fuel electricity. Recovered energy generation is cheaper than coal and geothermal is the same price under current means of production. This is with geothermal being as environmentally friendly as solar.
Growth with respect to geothermal will be driven by higher energy prices, the possibility of global warming, and the fact that the majority of energy comes from unfriendly countries. ORA has planned for growth in their power segment. This has a CAGR of 17% from 2006 to 2009 estimated. In 2003 ORA had a total of 242 MW in production, and they plan to have increased this to 626 MW by 2009. From 2003 to 2006 their revenue grew 34% CAGR. Adjusted EPS grew 14% CAGR over the same period. Adjusted EBITDA growth was 41% from 2003 to 2006. This is also one of the few pure geothermal plays that are public.
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