I was thinking about going long for my own account, a company involved in generating alternative energy; I’m looking at it as a very long term play, and at the moment I’m attracted the wind part of the market. Anybody got any thoughts? Anybody have any thoughts on other sources such as wave energy or geothermal?
I have water. He has fire. She has earth. And most importantly, that person over there has heart. With our powers combined…
Go read warren buffet’s keynote speech at the 99 sun valley conference. I’m not saying its a bad idea, but his perspective on fledgling industries is far from irrelevant.
captain planet rocks
topher Wrote: ------------------------------------------------------- > I have water. > > He has fire. > > She has earth. > > And most importantly, that person over there has > heart. > > With our powers combined… I liked Captain Planet cartoons. Ohh those lovely looney toons days…
soddy1979 Wrote: ------------------------------------------------------- > I was thinking about going long for my own > account, a company involved in generating > alternative energy; I’m looking at it as a very > long term play, and at the moment I’m attracted > the wind part of the market. Anybody got any > thoughts? > > Anybody have any thoughts on other sources such as > wave energy or geothermal? I have been doing a lot of research on this for work and a lot of companies are looking to get into this area.
I have gas 
sid3699 Wrote: ------------------------------------------------------- > topher Wrote: > -------------------------------------------------- > ----- > > I have water. > > > > He has fire. > > > > She has earth. > > > > And most importantly, that person over there > has > > heart. > > > > With our powers combined… > > > I liked Captain Planet cartoons. > > Ohh those lovely looney toons days… had to mute myself on an international conf call …lol
I’ve done some research on this for work… depends if you are thinking about going long based on fundamentals or from a more technical/psychological point of view that major institutions are going to need to “play” alternative energy and as the trade gets crowded (a lot of small thin stocks) it will push valuations In my opinion, the two biggest issues with wind power is its size and its capacity factor which limits its use as baseload power. Wind isn’t always “on” and capacitors, distribution, etc do not appear to be even close to ready to make this transition any time soon. The largest wind farms are 300 MW vs say a 1000 MW baseload coal plant? Take into account the capacity factors and you have an equivalent 75 MW plant (25% CF) vs an 800 MW plant (80% CF)… anyway just got busy with some stuff… I might try and finish this comment later
JasonU Wrote: ------------------------------------------------------- > I’ve done some research on this for work… > > depends if you are thinking about going long based > on fundamentals or from a more > technical/psychological point of view that major > institutions are going to need to “play” > alternative energy and as the trade gets crowded > (a lot of small thin stocks) it will push > valuations > > In my opinion, the two biggest issues with wind > power is its size and its capacity factor which > limits its use as baseload power. Wind isn’t > always “on” and capacitors, distribution, etc do > not appear to be even close to ready to make this > transition any time soon. The largest wind farms > are 300 MW vs say a 1000 MW baseload coal plant? > Take into account the capacity factors and you > have an equivalent 75 MW plant (25% CF) vs an 800 > MW plant (80% CF)… > > anyway just got busy with some stuff… I might try > and finish this comment later Couple additional points to your discussion… Wind adds volatility to the market (if it is in an unregulated market) and this results in the revenues suffering a significant discount to the average market price. Keep in mind that wind is a price taker if it operates in an open market. In addition, the economics tend not to work unless there is some form of government incentive. Luckily, the US stimulus package does provide some significant benefits to wind developers (grant or PTC), however, there are risks to these benefits as well (COD timing and production risk). Hope this helps.
soddy1979 Wrote: ------------------------------------------------------- > I was thinking about going long for my own > account, a company involved in generating > alternative energy; I’m looking at it as a very > long term play, and at the moment I’m attracted > the wind part of the market. Anybody got any > thoughts? > > Anybody have any thoughts on other sources such as > wave energy or geothermal? for geothermal, look into ORA (Ormat Technologies). BofA just put out a piece (Oct 22) that gives a fairly good over-view of the company and industry.
Not really exactly what you’re asking about, but in the same vein: I owned ENOC for a while (grid demand response company) and profited a bunch by buying on the dip in 08. I sold pretty much all of my stocks in June to get into stable assets when I bought a house. While I wouldn’t buy this stock at current levels (600mm is pretty big mkt cap for a non-earner) for a shorter term trade, as a long term bet there’s a lot behind it. You could also check out ITRI and ESE, both “smart grid” companies
There’s essentially no good way to play “wind” in the public markets. You can buy FPL Group, but you’re still getting a lot of regulated utility along with it. Vestas, on the Dutch exchange, is probably your best bet, but I still don’t like it. Wind is not a “fledgling industry” - it may interest you to know that Warren Buffett’s MidAmerican Energy is one of the largest owners of wind farms in the US. Wind represented 42% of all new capacity put online in 2008. "Wind isn’t always “on” and capacitors, distribution, etc do not appear to be even close to ready to make this transition any time soon. The largest wind farms are 300 MW vs say a 1000 MW baseload coal plant? Take into account the capacity factors and you have an equivalent 75 MW plant (25% CF) vs an 800 MW plant (80% CF)… " This isn’t really how it works. I’m not going to lie and tell you wind is baseload power, but balancing load and supply across the grid is much more complicated that most people understand. Multiplying cap factor times nameplate capacity gives you a meaningless number, for both wind and all other power plants. Cap factors for CT peakers are often in the single digits, but when you need them, you need every last MW you can get. Furthermore, while your 300 MW wind farm might fluctuate in output over the course of the day, from 250MW to 100MW to 150MW, this is pretty easy to balance, because it happens relatively slowly, in electrical terms. Meanwhile, if a large thermal plant trips offline (a pretty common occurrence), you lose 1,000MW in a millisecond.
Thanks folks for all the input.