Writing the Power Sector Commentary for the Institution of Electrical Engineers, I commented how the rise of alternative energy stocks represent a brand new sector. And this new sector will develop its own new financial products such as funds, derivatives and exchange-traded funds.

Over the next few years, it is possible that subsectors like tidal, bioenergy and energy storage may start to make a much bigger impact on the Public Markets. Although alternative energy has been with us a long time, it is very much a newcomer to the stockmarket.

This really is just the start.

Your ideal location for a geothermal power plant is on active volcanic terrain. The enormous ground heat makes for a very inexpensive method to power a steam turbine. Naturally, very few choose to live in such extreme conditions, so geothermal is just not a big player in most countries energy scenes, although there are still considerable geothermal opportunities to be had with hot springs. There's just one exception - Iceland, a volcanic island - which receives almost 100% of its power from geothermal resources.

Perhaps that's why then there are very few listed companies engaged in geothermal energy power production. But NYSE-listed Ormat Technologies is one of them. Based in the remarkably appropriately named town of Sparks in Nevada, Ormat Tech's business is the design, development, building, ownership, and operation of geothermal power plants and recovered energy-based power plants.

And late last week, Q2 profits were up by 16%. Ormat closed today at $20.59, very close to it's high of $21.10.

As this recent article describes, the size of investment in alternative energy is going up. Quite apart from the twin drivers of rocketing oil prices and the policy requirement to reduce C02 emissions, there's another reason. Heretofore, the alternative energy business was largely dominated by small and medium sized companies. No more - especially in Germany where renewable electricity now accounts from 10% of German power.

Just take a look at these 2 big players and what they're doing - Allianz and GE;

Giant German insurer Allianz said it was raising its stockholdings in renewable energy groups from 300 million euros to 500 million euros.

And mighty US conglomerate General Electric plans to double its revenue from sun and wind energy to 15 billion euros over the next five years.

Another letter I had published yesterday in The Business newspaper in response to their story last week on the rise of Dirty Oil, made possible by higher crude prices. I argued that whilst shale oil and tar sands become more economic with higher oil prices, there is also a major reallocation by the market - in private and public markets - towards alternative energy. I expect this trend to continue.

Anyway, you can see my letter here.