AltEnergy Investor

Alternative Energy - 2nd ETF on the way

One of the difficulties facing investors in alternative energy, is that the stocks are often volatile small caps and the universe ain't that big either. That's why I was very interested to read today ;

"Later this year an ETF (exchange traded fund) is expected to be released by PowerShares Capital Management. It will be traded on the American Stock Exchange and give investors an opportunity to buy and sell a package of alternative energy stocks throughout the trading day."

ETF's are a route into the market at much lower cost and risk. It's also a sign of increasing liquidity in the market, which will help draw in bigger investors. What's slightly perplexing here though is that there's already an existing ETF, the Wilder Hill Clean Energy Index , which is sponsored by PowerShares.

Maybe PowerShares have decided they'd rather brand their own ETFs than partner with someone else . . .

Ormat Technologies - the Geothermal play

NYSE-listed Ormat Technologies has just completed a 20 MW geothermal plant in Nevada. It took only 8 months to build - that must be one of the fastest large power plant constructions.

Since going public just over a year ago, Ormat has performed well, now trading in the low 20s, having reached a low of 14 in April this year. The company also takes an interest in recovered energy generation, remote power units and biomass fueled power units, although its major focus is in Geothermal. Ormat's recent Q3 results were strong; revenues rose 9.5 percent and net Income grew by 82%. And the company has a large market capitalisation of over $700 m - of major importance to Institutional Investors.

Its subsidiary, Ormat Funding Corp, has a much snazzier looking website. OFC was founded in 2001 to develop, construct, own, and acquire through certain direct and indirect subsidiaries geothermal power projects in the United States.

This company appears to have a major slice in the Geothermal market - and is publicly traded.

Xantrex Technology aims for profitability after California wind power deal

Xantrex Technology Inc has just announced a sales deal with recently London aim-listed Clipper Wind Power for $12 million of wind power converters.

Xantrex sees itself as a world leader in advanced power electronics. With the major renewables such as solar and wind providing power not in your precisely chosen quantity or even exactly when you want it, power electronics are vital to smooth out the power supply.

As renewables make ever greater inroads, it will still have to be on the back of better electronics managing the power. That's why Xantrex is important.

Outside of India - where power supplies are extraodinarily unreliable - there aren't many companies doing this. Xantrex though, is one of them.

Germany will stay committed to Renewable Targets

AEI followers will have picked up how many alternative energy stocks are based in Germany. So the level of political support there is of huge importance.

Prior to Germany's recent election, there had been fears within the country's renewable sector of huge cutbacks to its Renewables Programme.

Yet in a deal reached last Friday, it has been agreed that nothing will change until at least 2008.

Still, coalition governments between the 2 main parties in Germany do not have a habit of lasting a long time.

This is something to keep an eye on.

Katrina drives interest in Alt Energy Stocks

In a recent article in the Chicago Tribune, it was mentioned how Hurricane Katrina has indirectly driven up interest in alternative energy stocks. Perhaps not least because oil over $60 looks destined to stay with us for some time. And it's at these prices that renewable energy products are "financially competitive" - according to Walter Nasdeo at Ardour Capital Investments.

London Stock Exchange to hold Capital Markets Day for Renewable Firms

London's Stock Exchange recently announced a Capital Markets Day for the Renewable Sector set for October 13th.

Those companies in the sector - listed or planning to do so- will have the opportunity to meet a number of small-cap funds who want to know more about them.

Alternative Energy - a new Equity Sector

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.

Ormat Tech - a rare geothermal stock posts Q2

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.

Alternative Energy Investment - scaling up

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.

Oil price - a driver of alternative energy

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.

Welcome

Welcome to AltEnergyInvestor.  My name is Dan Lewis and I will be writing daily posts, occasional articles and generally pontificating on alternative energy and the world of alternative energy stocks. Partnering with me on this site is Dotmarketer, a very smart technology leader in blog marketing, who will also be taking care of the look and feel of this site.

This is an emerging industry at the start of a long boom. Rising fuel prices, rising environmental standards and pent-up energy demand are all coalescing to create an enormous wall of money going into alternative energy. But what are the different types of alternative energy, where are the stocks you can invest in and what are the underlying drivers for each sector?

These questions and more I have been working on for several years and now I want to share the answers with you. Along the way, there will be new technology breakthroughs and new corporations while some other companies will be left behind and may even fold. But it will be capital markets, not governments that make the biggest investments. You will be hearing about this and more on AltEnergyInvestor. I will not be giving any financial advice; buy this, sell that or hold on. I'll just be telling you what I think and reporting on news stories from day to day from around the world for you to use or discard as you think fit.

So once again, welcome to the cutting edge of the new energy future, www.altenergyinvestor.org paving the way for a cleaner, richer tomorrow.