Alter NRG Could Benefit from Anti-Coal Trend

For John Safrance, analyst at Fraser Mackenzie, Wednesday's coal beatdown, which sent prices in the black fuel falling 10%, is to some degree the result of a building anti-coal power trend that appears to be emerging in the United States.

And while that's potentially bad news for coal investors, the analyst told clients, it could mean good news for Alter NRG Corp. (ANRGF.PK) and its power plant gasification retrofitting technology.

Mr. Safrance noted that a Georgia Superior Court decision to suspend construction of a coal-fired power plant, after the power station's permits were challenged by the Sierra Club who claimed carbon dioxide  emissions were not addressed, reflects a growing movement away from dirtier coal assets to cleaner renewable forms of energy such as wind power. 

But while the building of new coal-fired plants are becoming less and less unlikely under this climate, he said it would be unreasonable to simply abandon existing coal-fired plants.  

In a note, Mr. Safrance said:

While we feel renewable sources of power will grow faster than the rest of the industry, we believe it is folly to expect that the country could turn its back on an energy resource that currently powers at least 25% of the grid.

With this recent news and the potential for more stringent CO2 and pollution regulations we believe an opportunity exists for Alter NRG  to capitalize on coal power  retrofits.

Mr. Safrance noted that Alter NRG's power station gasification retrofit can actually reduce emissions of not only carbon dioxide, but also sulphur dioxide, nitrogen oxide and mercury relative to pulverized coal burning.

That said, he cautioned that Alter NRG is currently "running through legal hoops" in Massachusetts where it is trying to retrofit an existing power station with partner NRG Energy Inc. (NRG).

Mr. Safrance said:

It may take some time yet  (up to three years) for Alter NRG to monetize its plasma gasification technology in this application. 

In the meantime, he said the company has plenty of opportunity in its waste-to-energy, petcoke gasification, and ethanol from syngas verticals and maintained his  "strong buy" recommendation and C$7.15 price target.

Comments

[FRANKO]

There is a new joint venture at Waltz Mill between Westinghouse Plasma & Coskata - the company General Motors is backing. www.pittsburghlive.com...

www.cnxmarketlink.com/...
Alter NRG to Support Coskata Inc.'s Commercial Demonstration Facility for Ethanol Production in Madison, Pennsylvania Co-located at Westinghouse Plasma Corp facility, the plant will utilize Alter NRG gasifier in production of 40,000 gallons of cellulosic ethanol per year
CALGARY, April 25 /CNW/ - Alter NRG Corp. (Alter NRG or the Company), the owner of Westinghouse Plasma Corp. (WPC), is pleased to announce that the existing WPC plasma gasification pilot facility has been chosen as the site for a cellulosic ethanol commercial demonstration project using Coskata Inc.'s
(Coskata) proprietary synthesis gas (syngas) to ethanol conversion technology. Coskata, a developer of next generation biofuels, is expected to begin construction in Q3 of 2008 on a 40,000 gallon-per-year cellulosic ethanol plant located at the WPC gasification facility in Madison, Pennsylvania. The commercial demonstration facility costs, which are expected to be $25 million, will be borne by Coskata. Alter NRG will convert biomass and waste material in its existing gasification reactor to provide syngas, a key component of Coskata's ethanol conversion process. This commercial demonstration will increase the utilization rate of the WPC gasification facility and is anticipated to provide approximately $2.5 million in revenue to the Company during 2009. On January 13, 2008 General Motors and Coskata announced a partnership which, they believe, "affordably and efficiently makes ethanol from practically any renewable source, including garbage, old tires and plant waste. According to Argonne National Laboratory, which analyzed Coskata's process, for every unit of energy used, it generated up to 7.7 times the amount of energy, and it reduces CO(2) emissions by up to 84 percent compared with a well-to-wheel analysis of gasoline." The Chairman and CEO of General Motors Rick Wagoner said in the January 13, 2008 release "We are very excited about what this breakthrough will mean to the viability of biofuels and, more importantly, to our ability to reduce dependence on petroleum." The plant is expected to deliver ethanol in early 2009, and Coskata partner General Motors will use the next generation ethanol, produced at the demonstration facility, at their Milford Proving Grounds to run in their E85 capable fleet of vehicles. "Our partnership with Alter NRG will allow us to showcase the commercial viability of our process in less than a year," said Bill Roe, president and CEO of Coskata. "Working with their experts in plasma gasification technology and with the use of the company's existing gasifier, we will demonstrate that Coskata's process technology is able to produce ethanol from non-food based sources for under $1 per gallon." Coskata leverages proprietary microorganisms and efficient bioreactor designs in a unique three-step conversion process that can turn virtually any carbon-based feedstock into ethanol. Coskata's biological fermentation technology is ethanol-specific and enzyme independent, contributing to high energy conversion rates and ethanol yields. Additionally, the process requires no additional chemicals or pre-treatments, serving to streamline operational costs. "We are pleased to collaborate with Coskata on their commercial demonstration plant" said Mark Montemurro, President and Chief Executive Officer of Alter NRG. "We view Coskata's efficient process as a perfect complement to our environmentally responsible gasification technology. Producing energy with renewable feedstocks is increasingly crucial and Coskata is prepared to make next generation ethanol a reality."
/For further information: Mark Montemurro, President and Chief Executive Officer - Alter NRG, [phone], Mmontemurro@alterNRG.c... Daniel Hay, Chief Financial Officer - Alter NRG, [phone], [e-mail]; Matthew Hargarten, Dig Communications for Coskata, Inc., [phone], coskata@digcommunicati...


more on coskata -
www.popularmechanics.c...

[john s. gordon]

the madison site was where the KRW gasifier was developed by dave archer & his crew in the 1980's. an attempt was made at tracy NV to demonstrate this system in a commercial environment but did not get a fair shake because you can't use candle filters on dusty low-btu gas.
> jack

[paulk8756]

All you're telling me is we need to expose the Sierra Club and the Wilderness Society, et al for what they're doing to our nation's future economic well being. Want more wars in the Middle East and elsewhere... well, that's just the ticket! Why the Green fools don't understand that is beyond reason.

[paulk8756]

And a judge in GEORGIA, no less! Now, what could he have possibly been thinking? Just interpreting the law, you say? Nice try, but I know better. I know all about the Greens, wetlands, the "Resonable Bird" rule and other such nonsense.

Well, the judge will get to render his next pontification in his shorts by candlelight, when they run out of power for A/C and electric lighting (...incandescent or otherwise) where he lives. What an idiot he is!