Gold standard in green power

Sunday Telegraph
Sunday 26/7/2009 Page: 114

MANY people may regard the production of green energy as an activity for lefties and idealists. But last year was a turning point. According to the UN, more money was invested in green energy projects around the world than was invested in old, carbon-based energy schemes. A report by the UN Environmental Program has found wind, solar and other clean technologies attracted $US140 billion worth of investment during 2008, compared with $US110 billion for gas and coal for electrical power generation.

Surprisingly, the countries showing biggest growth in their renewable-energy investment were not developed nations but emerging economies such as China and India. "China is now the world's second-biggest wind-energy producer," says Ben McNeil, a climate scientist and economist at the University of New South Wales and author of The Clean Industrial Revolution. "Countries are realising that the future is in sustainable energy and are ploughing huge amounts of cash into real projects to produce energy today. This isn't just talk any more.

"Australia has a great opportunity to cash in on technologies such as geothermal, or hot rocks, and solar, because of our sunny climate." In the next month, the Government will reveal which projects have been chosen to receive their share of $300 million in funding to help bring more clean energy into production. Many firms involved in the industries below will be hoping for a share of that cash.

The seemingly inevitable, but still controversial, emissions trading scheme is also a crucial factor. "The ETS will make mainstream energy sources more expensive - and that will, in turn, make a lot of renewable energy sources viable," says Ian Woods, a senior analyst with AMP Capital's sustainable fund. "At the moment, a lot of renewable energy is too expensive to produce, relative to mainstrem sources. They need the trading scheme to become viable." With that in mind, the ETS will provide a lot of investment opportunities in the renewable sector.

Hot Rocks
ONE of the most exciting companies in this area is GeoDynamics, an Australian firm that has pioneered so called "hot rock" technology, digging 3km or more beneath the surface to tap the enormous heat emanating from the Earth's core. This heat can power turbines and generate electricity. GeoDynamics is listed as a "buy" at several brokerages.

Green Rock Energy is another listed company in the hot-rock sector. Its share price has also shot up in the past month as enthusiasm for the sector builds. Green Rock Energy has announced it will tap the hot water that lies deep beneath Perth to provide geothermal- powered air-conditioning for the University of Western Australia. This will be the first project of its type in Australia.

After securing the geothermal exploration project for the metropolitan area, Perth-based Green Rock has struck a deal to provide geothermal-powered absorption chillers for the university, replacing five MWs of grid-based energy used to power conventional chillers. It will drill two wells 3km deep on the campus to draw superheated water from the sedimentary aquifers that lie beneath Perth.

This water will be fed through heat exchangers and returned to the aquifer. Green Rock chief executive Adrian Larking hopes the project will be expanded. The company hopes to strike a deal to provide heating and cooling to the 40,000- home Alkimos housing estate, to be built north of Perth, which could replace 50 MWs of power.

Wind Power
Babcock & Brown Wind Partners Group was spun off from the business. The new company, Infigen Energy, bought the former B & B wind assets for a bargain $20 million and is continuing to expand. Windlab Systems is a firm that has developed a technology that figures out the optimum position for placing wind turbines to maximise the natural power.

Jeffrey Castellas, the CEO of Cleantechnology Australasia, a specialist in corporate advisory services to the green-energy industry, says Windlab Systems' technology can pinpoint locations down to very small areas. "When you're investing millions of dollars in a windfarm, this kind of technology is invaluable in making it as efficient as possible," he says.

Biofuels
Microbiogen is an Australian firm specialising in producing biofuel from sewage. This type of technology has enormous potential but is still looking for investors. "If people are looking to invest in green-energy projects, they can come to us and we can match the investors to the appropriate projects or companies," Castellas says.

He is about to travel to India, where he will represent several Australian firms trying to establish joint ventures. Castellas has several exciting opportunities right now, of which his top picks are: Environmental Clean Technology (ECT), which has a technology called "coal dry". This extracts the moisture out of so-called "brown coal", which is normally just waste, and turns it into pellets that can be burnt more efficiently.

Australian Inspection Technologies (AIT) is another company that can help take coal usually regarded as waste and turn it into energy-efficient fuel. Superior Coal Ltd (SCL) is another firm that can work in virtually any coal mine to take the waste coal and transform it into usable fuel. "There are billions of tonnes of this stuff," Castellas says.

Solar
WE know there is a huge appetite for solar energy in Australia, because the Government's solar stimulus scheme had to be scrapped because it was so popular. But Dyesol is an exciting Canberra-based company that specialises in producing energy-efficient technology for solar panels, helping to minimise the amount of energy used in their manufacturing process. Dyesol's shares have been performing well recently.