Posted by Windy Admin on January 15th, 2010
There were a number of signifcant developments this week in wind energy:
In a move that may be more for PR rather than energy savings, Workers installed 20 wind turbines in late December Adobe Systems. The installation is expected to produce about 50,000 kilowatt hours of electricity a year which sufficient to power 6 average homes. In terms of Adobe’s consumption footprint however, it only represents 2% of the power used in their 1 million square foot corporate high rise buildings.
Wind "Turbines" at Adobe Headquarters
TVA said it has entered two contracts with Invenergy Wind affiliates to provide a total of up to 350 megawatts from wind projects at the White Oak Energy Center in McLean County, Ill., and the Bishop Hill Energy Center in Henry County, Ill., both beginning in January 2012.
GE has signed contracts to supply 88 wind turbines to HECIC New Energy, a Chinese wind energy developer, for three new projects in Hebei and Shanxi Provinces. The projects will support the growth of wind energy investments in China and the wind farms expect to add 132MW of installed wind power capacity in China. Some analysts expect China’s wind power segment to grow by 25% in 2010
Canada’s Western Wind Energy Corp (WND.V) said it received approval from the U.S. Federal Aviation Authority for 15 turbine locations for its wind and solar energy project based in Arizona. The company also said it was in the process of finalizing a turbine supplier, engineering procurement construction contractor and solar panel provider.
The UK wind farm planned is an order of magnitude larger than the picture of a wind farm near Wales above
The UK Government announced plans to build nine giant wind parks on their coasts, taking the lead in wind energy production globally and looking to provide 25% of their total energy needs. The cost will top 110 billion euros and expected completion is in 2018. If you have ever visited the UK coasts for any measurable period, you are well aware of the turbulent seas and windy conditions in the land-locked country.
Broadwind Energy (BWEN) shares which we wrote about last week continue to be under pressure as T. Boone Pickens announced plans to cut back on domestic wind farms and concentrate on natural gas
Posted by Windy Admin on January 7th, 2010
Broadwind Energy Inc. (BWEN) said Wednesday that it started a public offering of 15 million shares of its common stock. The company, which provides products and services to the wind energy industry, will sell 10 million of the shares, while Tontine Capital Partners LP and some of its affiliated funds will offer the remaining 5 million. Broadwind plans to use about $16 million of the proceeds to repay debt to Bank of America. It will spend the rest on capital or repaying other outstanding debt. Shares of Broadwind Energy fell 70 cents, or 9 percent, to $7.11 in afternoon trading yesterday but rebounded today over $7.40. Over the past year, the stock has traded in a range of $2.60 to $12.49. The last one year of operating results has not been kind to BWEN with net loss of 5 million dollars in the last 2 earning reports. Per the CEO, the economic slowdown in 2008 is still hampering their business:
“Since late 2008, we have been significantly impacted by a slowdown in our industry caused by reduced capital availability to fund new wind farm developments,” said Broadwind CEO J. Cameron Drecoll. “We have reacted accordingly, focusing on managing our expenses, improving our operations and preserving our liquidity. We are seeing early signs that capital is again flowing into wind energy project developments, and are well-positioned to take advantage of a recovery in 2010 and beyond.”
Unfortunately, we are skidding to invest in BWEN until they can produce measurable improvement in fiscal metrics. If operating costs can be pulled under control and the business does recover, we need to see evidence in the upcoming Q4 earnings report. Until then, we are on the sidelines.
Posted by Windy Admin on January 6th, 2010
UPDATE: Since our original story in late 2009, GCHT has drifted in the $2.30 – $2.50 range under light trading. Today, however, the stock is up 15% on no recent news other than the fact it is presenting in 1 week at the Needham Growth Stock Conference on January, 14th. Perhaps interest is gathering ahead of the conference or pending news is coming.
GC China Turbine (GCHT.OB) is a manufacturer of efficient 2-bladed wind turbines based in Wuhan, China . The Company holds a license to manufacture these 2 bladed turbines which meet rigorous requirements for low-cost and high reliability. The technology was developed through a 10 year European R&D effort costing in excess of $75 million dollars. They recently launched a 1.0 megawatt (“MW”) utility scale turbine with designs for a 2.3MW and 3.0MW utility scale turbine in development. The Company’s initial efforts have been rewarded with contracts of approximately US$128 million to-date and realistic potential for an additional $200-$400 million in additional contracts in the next 12-18th months. The deployment savings for the 2 blade turbine vs the traditional 3 blade turbine are signficant as listed below.
At approximately a $2200 savings, a large wind farm could see savings in the hundreds of thousands of dollars. In addition, the units yield a 3% uptime advantage over their 3 blade counterparts yielding additional revenue in the tens of thousands of dollars per year.
The company has recently engaged Deloitte & Touche Tomahatsu as their new independent registered public accounting firm to audit the Company’s financial statements for the fiscal year ending December 31, 2009. For a small firm such as GCHT, getting a world class auditor to validate their financials will pave the way to a listing on an exchange such as the Nasdaq Global Select Market and off the bulletin boards. If you are unsure the relevance of such a move, look at companies such as Gulf Resources (GFRE) to see the potential impact. Gulf Resources, also a public company based in China, rocketed more than 400% on the news. But GCHT doesn’t need hype to move its stock price, ultimately, it will need traction in its marketplace. If we assume that existing business trends continue for GCHT, a revenue figure of $275-300 million for the next 12 months seems like a conservative estimate. Given the price to sales ratio of 2 inline with its peers such as A Power Energy Limited (APWR), that gives the stock a potential market cap of approximately $600 million or about 3.15 times its current market cap. Consequently, a price of $9-11 is a reasonable valuation for GC China Turbine based on these parameters. With the current price around $2.85, the stock looks very attractive. The chart below shows that GCHT recently dipped below its 10 day moving average but it has bounced back through resistance each time it has done so before. In addition, the stock is currently at the lower end of the Bollinger band and could be poised for a rebound back to the mid 3’s in the short term. Be careful however that this is a lightly traded micro cap stock and typically exhibits greater volatility than its industry peers
Company Website : http://gccturbine.com
Author’s disclosure: long small position in GCHT
Posted by Windy Admin on December 4th, 2009
We have been in hiatus for a while, but there are a number of interesting developments in the area of wind power that have garnered our attention. Our wind power stock coverage is going to be expanded in the short term to cover a number of interesting companies that have surfaced in the space.
A-Power Energy Generation Systems, Ltd (APWR)
GC China Turbine Corp (GHCT.OB)
Vestas Wind Systems (VWSYF.PK)
Broadwind Energy, Inc. (BWEN)
In wind energy news in the past week, there were a number of announcements in the sector that show the wind energy market is alive and well
- PG&E announced that it has contracted with Iberdrola Renewables, Inc., the U.S. arm of the world’s largest provider of wind power, to purchase and operate a major wind generating plant to be built in Southern California to serve the utility’s electric customers. The proposed Manzana Wind Project, with a power capacity of up to 246 megawatts, would be the first wind project owned by PG&E. It follows a proposal by the utility in February, 2009 to develop and own 250 MW of solar photovoltaic power.
- Duke Energy Corp. has begun producing electricity from its Campbell Hill WindPower Project in Wyoming. The 99-megawatt operation near Casper, Wyo., will supply wind energy to PacifiCorp under a 20-year agreement. Duke says Campbell Hill’s 66 wind turbines will produce enough electricity to power about 30,000 homes per year.
- The Criterion wind project on Backbone Mountain will be sold by Clipper Windpower Inc. to Constellation Energy Group Inc. for $140 million, the buyer reported this week.
Constellation will purchase 28 wind turbines manufactured by Clipper that are capable of producing 70 megawatts of power and powering 23,000 homes. Projects with production capacities of more than 70 megawatts have to navigate much tougher scrutiny from the Maryland Public Service Commission.
