Invest-Yourself loves Geothermal stock investing

Geothermal Stocks

from Invest-Yourself.blogspot.com

By now you've seen the Chevron commercial touting their research and investment in alternative energy, including geothermal power. And even though a major oil company is just now expressing its interest, the black sheep of the renewables world is one Green Chip accepted long ago.

Geothermal , unlike wind, solar, and biofuels, rarely gets a piece of the limelight. And that's something I've not been able to figure out.

After all, it's an emission-free power source that's not affected by the shifting availability of sunshine and wind. That means geothermal is capable of being a base load power source, like coal- and natural gas-fired plants.

And as such, it's become price competitive with traditional sources of power in many areas, including the Southwestern US.

It's for all those reasons that we've been extremely bullish on geothermal stocks from the outset, boasting three geothermal plays in the current Green Chip portfolio.

Geothermal Stocks and Steam-Powered Profits

With oil having touched $92.22, renewable energy sources are looking increasingly promising. But even when oil was relatively cheap these geothermal stocks were still making their rise.

Now, with oil on the verge of $100, these plays are only going to go higher. Let's have a look.

Green Chip got in on Ormat Technologies (NYSE: ORA) all the way back in January 2005, shortly after the IPO. below...

We got in at $16.28 a share, and our readers are now sitting on gains of over 200%.

And, of course, you all know about US Geothermal (OTCBB: UGTH), one of the true darlings of the Green Chip portfolio. We alerted our readers to get into this stock back in July 2006, when the price stood at a mere $.80.

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Invest Yourself Blog - Geothermal Stocks Report

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Geothermal Power the next BIG THING!!!

article from: SeekingAlpha.com

A couple of weeks ago, I attended the Geopowering the West Investors' Forum in Montrose, Colo. (hosted by the Delta-Montrose Electric Association, Colorado's most progressive Rural Electric Cooperative.) I've long been interested in geothermal stocks, and I first started adding them to managed portfolios in 2003. As a whole, those stocks have more than doubled in the one-four years since they were purchased.

Fundamental Advantages of Geothermal Electricity
Why did I make those first purchases? Geothermal power has some unique advantages over other forms of renewable energy.

* Geothermal is base load power. Utilities have a strong preference toward base load and dispatchable power generation (basically power which is always on, or power which they can turn on at will.) In fact, geothermal plants often have capacity factors of 86-95%, well above traditional base load generation such as coal. So geothermal power is a premium electricity because of its reliability. Until a recent fire (not caused by the geothermal facility), the plant installed last year at Chena Hot Springs in Alaska, was running at 99.4% availability.
* It is inexpensive. Depending on the resource, the price of geothermal power is comparable to that of wind power, new coal plants, or biomass. It is considerably less expensive than solar photovoltaic or nuclear power, or the cost projections for "Clean Coal," otherwise known as Internal Gasification Combined Cycle with carbon capture and sequestration. Using numbers presented at the conference, a geothermal power plant will cost $3-4 per rated watt but produce about five times as much electricity as a similarly rated (and more expensive) photoelectric panel because of the much higher capacity factor.
* Geothermal has a small environmental footprint. Where solar and wind farms gather energy over large areas, a geothermal plant gathers heat from the hot rock or fluids below ground by means of one or a few wells. Because of this, the footprint needs to be only the size of the turbines which actually generate the power, smaller than the footprint of a coal-fired plant generating the same amount of power, without the necessity of coal mining and without significant emissions of carbon dioxide or other pollutants.
* In the later life of a geothermal plant, operations produce excellent income streams. While the plants often require refurbishment, with careful management, geothermal reservoirs need not degrade over time, and net margins often exceed 60%.

New Developments
Why are people only now starting to talk about geothermal power?

* Geothermal electric is not a new industry. The first geothermal electric power plant was built in the 1920s. But now we have a maturing industry seeing progress in new technology. Not only can lower-temperature resources now be used, but United Technologies (NYSE: UTX) has recently introduced a low-temperature-capable generator based on proven water chiller technology. This has the potential to rapidly increase the speed and lower the cost of project development.
* There is a growing awareness of the need for carbon-free sources of power. The IGCC's and Al Gore's recent win of the Nobel Peace Prize is just one recent sign of this.
* The Energy Policy Act of 2005 changed the regulatory environment. There is a new commitment from national government to simpler lease structures and royalty payments.
* Current projects typically developed over a three-year period, which is actually quite quick when compared with typical five-year lead times for coal plants.
* There exists an abundance of overlooked resources because of greater temperature reach. Historical studies assumed that electricity simply could not be generated below 300 F, but new technologies can handle temperatures below 200F, which geometrically increases the number of sites with potential for generation.
* Was seen as relatively small potential until the MIT Study which came out this year. Enhanced (aka Engineered) Geothermal Systems [EGS] hold out the promise that the extractable amount of energy is not limited by the resource size or availability. There is simply so much heat stored in the Earth's crust that only extracting a fraction of a percentage of it would allow us to meet our energy needs for the foreseeable future. While EGS holds out promise, the technologies needed still require significant research. From an investor's perspective, more concerned with the prospects for the next 10 years than the next 50 years, EGS is much more important for the interest it generates in geothermal than it is for investment opportunities. Nevertheless, in terms of meeting our long-term energy needs, I expect Enhanced Geothermal Systems to be a much cheaper and simpler solution than Carbon Sequestration from Coal plants.
* Geothermal as oil co-product. Many existing oil wells also bring up sizable quantities of water at temperatures sufficient to run small binary cycle turbines. While this resource at any one oil well is likely to be small (less than a megawatt), aggregating all the wells in a large oil field could produce significant power at low cost given that the costs of exploration and exploratory drilling need not be paid for by the geothermal electricity generated.

Tricks of the Trade
What does a geothermal investor need to watch out for?

* Exploration risks. Prospecting for geothermal resources using remote sensing and surface sampling is useful for defining the drilling target, but does not significantly reduce the risk of not finding a resource sufficient to produce power. This is in distinct contrast with oil prospecting, where prospecting significantly reduces risk.
* Risks to resources currently in use. Attendees were treated to a Jeep tour through the geothermal history of the town of Ouray. Over 20 years ago, the city started a series of test wells around the town with the hope of finding enough geothermal hot water for a district heating system, and to keep their Hot Springs Pool open year round. All did not go as planned, and three of the owners of springs around the city filed lawsuits against the city, charging that the city's drilling had reduced their flows. The parties settled, but the city was forced to discontinue drilling. While the city of Ouray officials did not admit to decreasing flow rates of other pools, after listening to both sides, I think the owners of the springs had real grievances (and the courts seemed to agree with that assessment.)
* Unexpected effects of new technology. One large potential problem is induced seismicity when trying to stimulate reservoirs in hot dry rock for EGS. One reason for an investor to consider geothermal development companies rather than geothermal equipment suppliers is that a company with a known geothermal resource will generally benefit from the evolution of technology, while a technology supplier could easily lose market share to competitors.
* A geothermal resource developer must be able to connect to the grid. No matter how hot the resource nor how close it is to the surface, the developer must be able to connect to the electric grid at a point where there is sufficient available capacity to sell the electricity. The ability to negotiate a Power Purchase Agreement with a local utility having a respectable credit rating will also enable the developer to gain access to financing on more favorable terms.
* Ownership of geothermal resources is legally complex. As the City of Ouray found in the dispute mentioned above, unless an owner has put a resource in use, they may find that a court of law will not uphold their ownership of that resource.
* Many of the future resources to be developed are likely to be "blind." That is, there is no surface indication of the hot rock below. Exploration for such resources is likely to be more lengthy and costly than past exploration.
* As with any industry, quality management and personnel will be able to find opportunity in a crisis, while less-able teams will be unable to exploit all the opportunities available.
* Skill in managing geothermal reservoirs is essential. Pumping a reservoir too quickly or reinjection of cool fluids in the wrong place can greatly reduce the production from geothermal reservoirs.
* Except when the developer plans to use less efficient and more expensive air cooling, the availability of low-temperature cooling water in sufficient quantities will be necessary to generate electricity.

Companies
Here is a short list of interesting companies involved in geothermal power production and some reasons you may want to consider them for investment.

* Ormat (NYSE:ORA). Ormat is the granddaddy of geothermal stocks. A vertically integrated company, they not only explore and develop their own resources, they also will contract to manage resources for other developers (such as US Geothermal's Raft River project). Their long history and current profitability gives them the safest pure-play geothermal stock available. They are experts with binary cycle turbines and reservoir management, as well as applying their binary cycle technology to waste heat recovery as well as concentrating solar power experiment.
* United Technologies (NYSE: UTX) is not really a geothermal company at all, but I include it because of its recent innovation in producing low-temperature binary cycle turbines on an assembly line basis, using an adaptation of their industrial chiller technology, for which they recently won a R&D 100 award. While this may never become a significant part of UTX's bottom line, it is likely to change the economics of geothermal development for the better. I also expect to see the PureCycle turbine applied to a myriad of waste heat applications, quite possibly more than to geothermal.
* Raser Technologies, (NYSEArca: RZ), Nevada Geothermal (OTC BB: NGLPF.OB, NGP.V) , US Geothermal (OTCBB: UGTH, GTH.TO), Sierra Geothermal (OTC: SRAGF, SRA.V), Polaris Geothermal (PGTHF.PK), and Western GeoPower Corp (WGPWF.PK, WGP.V) are geothermal developers. I find it very difficult to determine which will succeed and which will fail, and so prefer to own a little of each, buying when I feel the stocks are relatively inexpensive from a technical analysis standpoint. Raser is not a pure geothermal developer; they also develop high-performance electric motor technology, which is interesting to me, but the synergies are far from obvious.)

Geothermal has long been an underappreciated renewable energy technology. That seems to be changing, which will be an excellent thing both for our hope of moving to a less carbon-intensive economy, and for early investors in the sector.

RBC backs $100 mil Geothermal Infrastructure Project in Toronto

article from TheStar.com

Geothermal technology is great, but why is nothing being done?

Tyler Hamilton, Energy Reporter

There was an informal lunch last week in the executive dining room of RBC Financial, organized by Corporate Knights editor Toby Heaps. The purpose of the small get-together was to discuss ways to spur the large-scale deployment of geo-exchange energy systems for the heating and cooling of buildings.

A number of stakeholders were represented, among them RBC, Manitoba Hydro and Hydro One, but commercial builder The Remington Group, geothermal utility start-up GeoXperts and carbon offset champion Zerofootprint also shared their views.

As discussion unfolded, one thing became clear: All saw the tremendous potential for mass deployment of geo-exchange technology, both as a way to reduce greenhouse gas emissions in Ontario and as a way to save owners of buildings and homes a bundle of money over time.

Geo-exchange technology, also known as low-temperature geothermal, provides heating and cooling by taking advantage of constant temperatures two metres or more below the Earth's surface. It's renewable and free of greenhouse gas emissions, and while it requires electricity to operate, it considerably reduces the fossil fuels or power required to operate conventional heating and cooling systems.

"I think we're on to something, and I think it's the way of the future," said Richard Tripodi, vice-president of Remington's high-rise division.

Ron Dembo, founder and chief executive of Zerofootprint, said there are 140,000 new buildings being constructed in Canada each year and about 700,000 homes in Ontario still heated with electricity, making them prime candidates for geothermal.

Locally, hundreds of schools across the GTA have a mandate to be green and a need for energy savings – which could be in the order of 30 per cent a year if existing systems were enhanced with geothermal technology.

"They would do geothermal now if the ducks were lined up, and there's no good reason the ducks aren't lined up," said Dembo.

Commercial buildings in general are a massive opportunity. There are 395,000 commercial buildings across Canada that together account for about 15 per cent of energy use nationwide, according to a report released Friday by Sustainable Development Technology Canada. We're talking schools and universities, office buildings, retail outlets, warehouses, hospitals and restaurants.

About 40 per cent of those buildings were built more than 35 years ago based on construction techniques, technologies and standards that would never pass muster today in terms of energy efficiency. More than two-thirds of the energy used in these buildings – largely electricity and natural gas – goes toward space heating, cooling and hot water.

If embracing geothermal is a no-brainer, then why isn't it happening? Why all the talk, all the agreement, but no action?

"It's because of institutional barriers," said Dembo, explaining that a combination of government bureaucracy and a lack of access to capital tend to block or discourage action.

You can add lack of political will, outdated building codes and standards and inertia to the list. Major stakeholders – property developers and financial institutions and governments – are also working in silos and not properly communicating their needs to each other.

"People continue to sell what they know. There's a huge knowledge gap here," said Dembo.

Ojan Jamkhou, vice-president of business development at RBC, and Nelson Switzer, the bank's senior manager of corporate environmental affairs, were hearing the message and agreeing. It was an important issue for RBC, they said. They want to play a role. They welcomed the opportunity.

Their response intrigued Tripodi. "It's a funny thing, you mention you are into this business but we don't know about it," he said, speaking on behalf of Remington and other developers in the market. "You have to educate builders."

The session ended with a challenge. Dembo proposed that RBC back a $100 million pilot project that would aim to retrofit 30 schools in Toronto with geothermal systems.

The point of the exercise would be to test a funding model that would provide easy and cheap access to retrofit capital and prove to the bank that it's a business opportunity that could be replicated and expanded into billion-dollar funds aimed at different sectors.

RBC accepted the challenge. "Let's make it happen," said David Moorcroft, senior vice-president of corporate communications at the bank. "That's the bottom line."

It was a short, insightful and productive session, the kind of constructive gathering that should be happening in offices across the country, and should be expanded to include ways of renewing our aging municipal infrastructure in sustainable ways.

The Federation of Canadian Municipalities announced last week that 79 per cent of our roads, bridges, water systems and other vital infrastructure have exceeded their rated service life. Fixing them will come with a $123 billion price tag, the federation argued. It warned that "signs of collapse" are all around us and "catastrophic failures" are an ongoing risk.

Now, this seems like a gloomy, depressing report – if you choose to view it that way. But if we're forced to act, why not see it as a tremendous opportunity? If we have to replace this infrastructure, let's use the greenest and cleanest of technologies. Let's make what we refurbish and rebuild as efficient and sustainable as possible, and let's create local, high-paying jobs and markets in the process.

The economic upside isn't lost of the nation's top CEOs.

"Meeting the climate change challenge will impose significant costs on Canadians, but also offers huge opportunities," according to a policy directive released last month by the Canadian Council of Chief Executives, representing a list of high-profile CEOs too long to mention.

"The key is to make the right decisions about what investments in the short term will produce the greatest returns both now and over the long haul, for Canada's economy and for the global environment."

What's needed, they said, was clear and consistent policy and quick action. There's no room anymore for dithering. No time for political games.

More of us should be issuing challenges to government and the private sectors. And like RBC, more powerbrokers of our economy need to be taking those challenges on.

Geothermal Stock Investing - short list

Geothermal Stocks

Here are a few names to look into:

* Geodynamics
* Geothermal Resources
* GreenRock Energy
* Nevada Geothermal Power
* Ormat Technologies
* Petratherm
* PNOC Energy Development Corp
* Polaris Geothermal
* Torrens Energy
* Western Geopower
* WFI Industries

Guide to Geothermal Energy Investments

Geothermal Power Stocks

Calpine Corporation (OTCPK: CPNLQ) is a North American power company engaged in the development, construction, ownership and operation of power generation facilities and the sale of electricity predominantly in the United States, as well as in Canada and the United Kingdom. The Company focuses on two types of power generation technologies, natural gas-fired combustion turbine and geothermal. As of December 31, 2003, it owned over 800 billion cubic feet equivalent of net proved natural gas reserves located in Alberta, Canada, as well as in the Sacramento Basin, Rockies and Gulf Coast regions of the United States. In addition, the Company owns a 25% interest in Calpine Natural Gas Trust. Calpine is capable of producing 215 million cubic feet equivalent of natural gas per day.

Geodynamic Fpo (GDY.AX) (Australia) Developing renewable geothermal energy generation from hot dry rocks in Australia.

GEOTHERMAL RESOURCES LIMITED (ASX: GHT) Exploration for hot rock geothermal energy resources.

GREEN ROCK ENERGY LIMITED (ASX: GRK) Green Rock Energy is focused on becoming a major producer of clean, renewable geothermal energy by generating base load electricity from hot dry rocks. The Company also plans to pursue other opportunities in the growing "green" energy sector.

Nevada Geothermal Power, Inc. (CDNX: NGP.V; OTCBB: NGLPF) is a renewable energy company exploring and developing geothermal projects in the United States to provide electrical energy that is clean, efficient and sustainable.

Ormat Technologies Inc. (NYSE: ORA) operates in the geothermal and recovered energy power business. The company operates in two segments, Electricity and Products. The Electricity segment develops, builds, owns, and operates geothermal power plants, and sells electricity. The Products segment designs, manufactures, and sells power units for geothermal power plants; power units for recovered energy-based power generation; and remote power units and other generators, including fossil fuel powered turbo-generators, as well as heavy duty direct current generators.

Petratherm Limited (ASX:PTR) Buildaing a Portfolio of Quality Geothermal Energy Projects.

Polaris Geothermal Inc. CL (TSX:GEO.TO) Polaris is a renewable resource company currently focused on the development of renewable energy in Latin America. Polaris is currently developing a 66 MW geothermal project on its San Jacinto Tizate concession in Nicaragua. The San Jacinto Tizate concession contains two resource sectors, known as the eastern and western sectors. Preliminary reports from Polaris engineering consultants Sinclair Knight Merz indicate that the entire resource area, the mean capacity is estimated to be 277 MWe, with a 90% probability that the resource capacity will be greater than 203 MWe. Within that total, the eastern resource is estimated to have a mean capacity of 86 MWe and a 90% probability of being greater than 67 MWe. Polaris has rights to develop additional concessions.

Raser Technologies (NYSE: RZ) - Formed in 2003, Raser is a publicly traded technology licensing company focused on improving the efficiency of rotating electromagnetic and heat transfer applications within the Transportation, Industrial and Power Generation markets. Raser's Symetron™ motor technology is designed to take electric motor technology closer to its theoretical limit. Application of Symetron™ generally requires simple changes to existing products, but yields significant increases in power, performance and efficiency without the use of exotic materials. The company is also expanding its interest in power generation to include the development of geothermal electricity generating plants, deriving revenues from both the sale of the electricity as well as through monetizing the tax credits and attributes that such plants possess.

Sierra Geothermal Power Corp (TSX: SRA.V) – Sierra Geothermal is committed to the responsible and economic development of sustainable alternative energy projects with a clear focus on geothermal power production. Sierra Geothermal can earn a 50% interest in the Pumpernickel Geothermal Power Project from Nevada Geothermal Power Inc where hot springs, with surface temperatures near the boiling point, overlie a large geothermal reservoir. The focus of ongoing exploration at Pumpernickel is to define the limits of a reservoir capable of sustaining a 20 - 30 megawatts plant (capable of supplying energy to 30,000 homes). In addition, Sierra Geothermal is currently performing due diligence on other acquisitions.

TORRENS ENERGY LIMITED, (ASX:TEY) Australia based - generates sustainable, renewable, emissions-free geothermal energy.

US Geothermal (OTCBB: UGTH;TSX: GTH.V) a development stage company, engages in the development of geothermal energy power plants in the Raft River area of Idaho. The Company possesses three Power Purchase Agreements with the Idaho Power Company for the production of 30 MW of electricity at Raft River. Construction of the Phase One power plant is planned in 2005 and power production is planned for 2006. On the basis of a report prepared by Company’s independent consultant, GeothermEx Inc., of Richmond California, the Company believes that Raft River’s energy reservoir is scalable to produce an estimated 90 MW of power from 6.5 square miles (16.8 square kms) of lands owned or leased by the Company. Adjacent to the existing electrical transmission grid and surrounded by modern infrastructure, Raft River is ideally located to make an important contribution to the power needs of the rapidly growing Pacific Northwest for decades to come.

Western GeoPower Corp. (TSX: WGP.V) is focused on developing the South Meager Geothermal Project as Canada's first commercial geothermal power generating facility for electricity, with a development potential of 100 MW to 250 MW of electricity generating capacity.

Wfi Industries Ltd (WFI.TO) WFI Industries manufactures and distributes geothermal heating and cooling systems for residential and commercial applications. The Company's products are sold and serviced throughout the United States, Canada, Europe, Asia, and Australia. WFI's products are sold under the "WaterFurnace" name.