Bill Paul's  Instablog

Posted: For the Week of October 18-24, 2009

There are at least two axioms EnergyTechStocks.com believes alternative energy investors should follow. The first is to have an investment horizon of at least three to five years, in order to be able to take advantage of several upcoming sea changes – such as global cap-and-trade and the mass introduction of plug-in electric hybrid vehicles – that are expected to power the sector higher.

The second is to pay close attention to companies that look more “dirty” than “clean,” because in this new carbon-constrained environment, many are launching clean initiatives that within three to five years could make them alternative energy powerhouses.

Three such companies are Norway’s StatoilHydro (Symbol STO), Japan’s Mitsubishi Heavy Industries (Symbol TYO:7011 and MHVYY), and Mexico’s Cemex SAB de CV (Symbol CX).

Statoil today is a “dirty” oil and gas firm, but in three to five years it could emerge as a key player in the area experts are calling “the Saudi Arabia of wind,” otherwise known as offshore Maine. It’s been estimated that the Gulf of Maine has about 150,000 megawatts of harvestable wind energy, and StatoilHydro, in partnership with the University of Maine and others, is currently testing its wind energy technology, the same technology it already uses off the Norwegian coast.

Mitsubishi Heavy Industries makes oil tankers, helicopters, tractors, torpedoes and more. But what alternative energy investors should know is that it also has developed a rooftop solar unit reportedly capable of supplying 65% of the energy needs of a Japanese household. The unit reportedly combines photovoltaic generation and solar heat recovery, the latter usable for household heating and hot water. Commercial sales are expected to ramp up in 2010.

Meanwhile, Cemex’s U.S. unit just got a contract from the U.S. Department of Energy to develop technology for carbon capture and storage (CCS). The project, which involves designing a dry sorbent capture and compression system, could become an essential way of dealing with one of the biggest sources of this greenhouse gas, namely, the production of cement. Like all cement manufacturers, Cemex could pay a hefty financial penalty under cap-and-trade, but technology like this could turn the company’s (and the cement industry’s) future around.

Posted: For the Week of October 11-17, 2009

It may soon be time to start thinking about German automobile manufacturer Volkswagen AG (Symbol VLKAY) in a brand new way.

For that matter, it may soon be time to think about Honda Motor (Symbol HMC), Toyota Motor (Symbol TM), Ford Motor (Symbol F) and other car giants as more than just car and truck companies. If this happens, it will also be time to think about a major new threat to many traditional electric utility companies, as well as a major market expansion for natural gas providers, and a major new reason to believe in the future of green power.

That’s a lot to think about, but when you analyze a new VW project in Germany, it’s not hard to imagine sweeping change in how household electricity, heat and hot water is provided throughout the developed world.

VW has teamed up with privately-held, independent German energy supplier Lichtblick on a project to supply combined heat and power (CHP) units to 100,000 German homes. Lichtblick’s “Ecoblue” CHP units will be driven by natural gas-fueled engines from VW. The units will supply power on demand, thereby providing the backup power that will help keep the world’s green power-connected grids stable when the sun isn’t shining and the wind isn’t blowing.

Altogether, those 100,000 EcoBlue’d homes reportedly will have the equivalent output of a huge 2,000-megawatt (MW) centralized power plant. But as a “virtual, decentralized” power plant, the EcoBlue units won’t cost as much. Also, since they’ll be fueled by natural gas, they won’t pose the environmental threat of a large coal-fired power plant. This network of CHP’ed homes also will provide a cost-effective alternative to large-scale battery and flywheel-based storage systems for preventing grid instability when 20% or more of everyone’s electricity comes from green power sources, as will be required in many countries and U.S. states within five to 10 years.

Another natural advantage of VW’s project is that CHP is far more efficient than centrally-dispatched power. Still another is that because these CHP units will also provide heat, they’ll reduce the need to heat with oil, which will help break the world’s “addiction” to oil. (They’ll also provide a handy source of electricity for plug-in vehicles, which also are going to reduce the world’s oil dependence.)

Honda, too, is powering ahead with a residential-sized home power unit, and it’s easy to see other technologically-attuned car companies jumping in as more electric vehicles come to market. This should increase natural gas usage at a time when the U.S. in particular has more to use.

The losers? Electric utility distribution companies that aren’t “combo” electric and natural gas deliverers could see a lot of ratepayers bolt