14 Stem Cell, Renewable Energy Opportunities for the Obama Era 17 comments
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America has entered recession again. Do we have to have such pain every ten years? Apparently we do if you believe history repeats itself in some way. In the last 100 years, we did have recessions roughly every ten years. However, that's not the end of the world; every time we had technological revolutions bringing us out of recession and moving us forward. The internet revolution led us out of the 1980's recession. This time, there will be no difference, we just need a new technological revolution to boost our economy.
President Obama has set the stage for this to happen, by opening the gate for new stem cell research and for the development of renewable energy for the future of this country. We need to abandon the traditional "crude" energy, and embrace a new way of using renewable wind, geothermal and solar energies. In my opinion, Obama's new policy will bring new revolutions to this country and better days are ahead of us.
Stem Cell Research
President Obama is expected to lift the ban on federal funding on stem cell research in coming weeks, a historic move that will boost the US health industry. As a sign of the attitude of this administration, last week, the Federal Drug Administration said it had cleared US company Geron (GERN) to begin trials of its early-stage treatment for spinal cord injuries. This is breaking, almost revolutionary, news in the health industry as this will bring a new era of treating diseases. Investors welcomed this news.
Earlier last week, ReNeuron's [RNUGF.PK] ReN001 therapy for stroke won permission to start UK trials; the stock rallied almost 400% in a week's time. Stemcells Inc. (STEM) owns a 10% stake in ReNeuron. Stemcells and Geron are two US companies leading this industry. Stemcells has over 130 patents, Geron has over 160 patents. To investors, a new era has come, and the opportunity is huge. For STEM and Geron, we may be looking at a medical "Microsoft" (MSFT) of the 1980s.
Renewable Energy
Three main sectors are encouraged by the new president's renewable energy policy: wind, geothermal and solar, among which wind is the most economical energy when crude oil is trading at a multi-year low. China has rolled out many wind farm projects, targeting a cost of less than 10c/w, while the cost in the U.S. is also low compared to solar farms, which is estimated at around $1~1.5/w. China still has the advantage of cheaper labor compared to the U.S., and as a result, the cost to generate electricity in both wind and solar farms is lower.
A good example of a US company investing in the China energy market is the joint venture between GE and A-Power Energy Generation (APWR). GE will supply over 2.4GW wind turbine products to A-Power starting 2009. A-Power has just completed a facility capable of making 1000MW turbines annually to meet the rapid demand in China as the government promotes wind energy as a major renewable energy source.
On the other hand, solar companies are facing a fund shortage in the short term. Q4 and Q1 earnings are expected to be terrible as demand dropped sharply from 2008's peak. China's Suntech Power's (STP) CEO Shi said in an interview that he expects gross margins in Q4 will be close to zero if not negative. Companies like Canadian Solar (CSIQ), Solarfun (SOLF), Yingli Green (YGE), Trina Solar (TSL), SunPower (SPWRA) and Energy Conversion Devices (ENER) are facing the same fate in 2009.
One sector that has been neglected by investors is geothermal energy, which is also covered by Obama's new energy plan and favored by energy secretary Steven Chu. One US company is a pioneer in this sector - U.S. Geothermal Inc (HTM). The company, through its subsidiaries, engages in the acquisition, development, and utilization of geothermal resources in the western region of the United States. It also owns interests in a 3.6 megawatt operating geothermal power plant, and approximately 28,358 acres of geothermal energy leases and certain ground water rights located in the north of Reno, Nevada.
As for nuclear power, Steven Chu has repeatedly stated that nuclear power has to be part of new energy sources for the US as it is still the cheapest clean energy on Earth. If he discloses more details on how he wants to proceed with nuclear power, uranium might get a boost, and companies such as Uranium Resources (URRE) and Cameco (CCJ) might benefit from the uranium rush.
Disclosure: Long GERN, STEM, STP.
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Fell hard last quarter due to a minor recall and bad timing (some mutual funds dumped when it fell below $1 in last November).
Should be the 1st profitable stem cell company from operation. No debt, plenty of cash and tons of pricing power (just raised price 25% of its products) because no real competition to its products.
Do your dd like you own the company before investing as always.
He talks about wind farms and solar farms and the need to upgrade the electricity grid to deliver the energy to where people are located. This is great, but more immediate approaches need to be taken at the same time. In addition, there are environmental issues with this approach, since it would convert vast areas of open space into energy farms.
There seems to be no mention of increasing the production of energy on residential and commercial roof tops. Solar systems installed on existing homes and businesses have a number of positive advantages that centralized renewable power generation does not have. There is little immediate environmental impact.
Since the power is generated in the area that it is required, there is no strain on the electrical grid for delivery and can reduce the strain on the grid by reducing the need to bring in power. This approach also creates jobs right away for installers in the immediate community, where the jobs are needed, not in a remote area with solar and wind farms or in building a new delivery grid.
By Mr. Chu concentrating on the need to upgrade the grid, it delays taking immediate action, which can occur using solar photo voltaic systems on rooftops. The technology exists right now, there are people ready to implement it that need work, and there are examples in Germany, Spain, and Japan that show that it is a successful approach.
One concern Mr. Chu has expressed is that it is difficult to store energy generated by renewable sources. I think that his concern is missing the point. If we use the energy we generate using renewable sources when it is available, and continue to use traditional sources of energy when the renewable source is not available, we will immediately make a significant reduction in the use of energy generated in the traditional manner, such as coal.
Local generation of electricity can be installed in commercial locations that generate energy for the community. Warehouses, malls, schools all can be used as great sites for Solar PV system installations. This creates lots of energy being generated in many locations, which makes it less vulnerable to acts of nature or sabotage.
Additional incentives and financing need to made available for local installations of solar systems to promote this area of renewable energy generation. This approach will immediately create jobs in our community, reduce our use of traditional energy sources. Both approaches would be nice. Do more distributed systems now while we build some sort of longer term renewable transmission backbone.
On Jan 26 01:01 PM cool hand luke wrote:
> My pick for 2009 and beyond...? Thermogenesis (seekingalpha.com/symbo...).
>
>
> Fell hard last quarter due to a minor recall and bad timing (some
> mutual funds dumped when it fell below $1 in last November).
>
> Should be the 1st profitable stem cell company from operation. No
> debt, plenty of cash and tons of pricing power (just raised price
> 25% of its products) because no real competition to its products.
>
>
> Do your dd like you own the company before investing as always.
What I find interesting is the statement that nuclear is cheap. Not according to estimates for new nuclear plants. Prices are expected to be 12-17 cents/kWh from new nuclear, with prices as high as 22-30 cents/kWh for at least the first year that a plant goes online. The estimates for building new plants have skyrocketed. FPL raised the estimate for two new plants proposed for Florida from
$4100/kWh to $5500-$8100/kWh. Another estimate for new plants is as high as $10,000 per kWh.
climateprogress.org/20.../
Another point is that we can build wind and solar plants much quicker. It will probably be a decade before the first new nuclear plants go online. By then, solar and wind could already be producing hundreds of gigawatts of power.
Building wind and solar also creates 3-4 times as many jobs as building nuclear or coal plants.
APWR does look good. The deal with GE is a good confirmation for them.
kWh is correct for electricity prices, but I should have written kW for the price of power plant construction.
Stem cell bubble
A good example of a US company investing in the China energy market is the joint venture between GE and A-Power Energy Generation (APWR). GE will supply over 2.4GW wind turbine products to A-Power starting 2009. A-Power has just completed a facility capable of making 1000MW turbines annually to meet the rapid demand in China as the government promotes wind energy as a major renewable energy source.
In addition, the reason we are having so many problems surronding energy is that we have moved away from community-based solutions for almost everything. This decision has had a negative impact on our use of energy, is really expensive and distroys the vary fabric of communities.
I think that a large part of the economic stimulus package should be focused on green tech at the community level. It solves 2 huge problems we face; employment and energy use.
On Jan 26 03:13 PM Solar Man wrote:
> Energy Secretary Steven Chu is missing an opportunity. Whenever he
> talks about renewable energy sources, he primarily talks about the
> need to upgrade the utility grid. (newmexicoindependent.c...
> as example).
>
> He talks about wind farms and solar farms and the need to upgrade
> the electricity grid to deliver the energy to where people are located.
> This is great, but more immediate approaches need to be taken at
> the same time. In addition, there are environmental issues with this
> approach, since it would convert vast areas of open space into energy
> farms.
>
> There seems to be no mention of increasing the production of energy
> on residential and commercial roof tops. Solar systems installed
> on existing homes and businesses have a number of positive advantages
> that centralized renewable power generation does not have. There
> is little immediate environmental impact.
>
> Since the power is generated in the area that it is required, there
> is no strain on the electrical grid for delivery and can reduce the
> strain on the grid by reducing the need to bring in power. This approach
> also creates jobs right away for installers in the immediate community,
> where the jobs are needed, not in a remote area with solar and wind
> farms or in building a new delivery grid.
>
> By Mr. Chu concentrating on the need to upgrade the grid, it delays
> taking immediate action, which can occur using solar photo voltaic
> systems on rooftops. The technology exists right now, there are people
> ready to implement it that need work, and there are examples in Germany,
> Spain, and Japan that show that it is a successful approach.
>
> One concern Mr. Chu has expressed is that it is difficult to store
> energy generated by renewable sources. I think that his concern is
> missing the point. If we use the energy we generate using renewable
> sources when it is available, and continue to use traditional sources
> of energy when the renewable source is not available, we will immediately
> make a significant reduction in the use of energy generated in the
> traditional manner, such as coal.
>
> Local generation of electricity can be installed in commercial locations
> that generate energy for the community. Warehouses, malls, schools
> all can be used as great sites for Solar PV system installations.
> This creates lots of energy being generated in many locations, which
> makes it less vulnerable to acts of nature or sabotage.
>
> Additional incentives and financing need to made available for local
> installations of solar systems to promote this area of renewable
> energy generation. This approach will immediately create jobs in
> our community, reduce our use of traditional energy sources. Both
> approaches would be nice. Do more distributed systems now while we
> build some sort of longer term renewable transmission backbone.<br/>
In addition, the reason we are having so many problems surronding energy is that we have moved away from community-based solutions for almost everything. This decision has had a negative impact on our use of energy, is really expensive and distroys the vary fabric of communities.
I think that a large part of the economic stimulus package should be focused on green tech at the community level. It solves 2 huge problems we face; employment and energy use.
Yes, distributed energy from PV on rooftops etc. is a good thing. We need more of that, a less centralized grid.
If we think of it as a quality verses quantity issue, the distributed energy addresses the quality, but we also need a large quantity of renewable energy, if we are to reduce CO2 emissions enough to get the job done.
I believe we need to encourage this as well as large solar and wind farms.
Solar thermal with heat storage is the only renewabe that can replace the base load from coal plants, and it has to be large scale to work and be cost effective. And it has to be in areas of intense sunlight like the southwest. It doesn't require storage sytems in the grid, as it has it's own storage.
A smart grid will not just encourage large projects, as small distributed systems like rooftop solar will need to be smoothly integrated into the grid, so you can sell your excess electricity back to the utility, for instance.
We should remember that analysts are usually looking at the fairly short term picture. Renewable energy is obvously in the beginning of a macro trend that will span years and decades.