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Stocks for the Renewable Energy Reaction

|Includes:Capstone Turbine Corporation (CPST), FCEL
In many places, renewable energy has become synonymous with "higher electricity prices".  Where Wind or Solar PV electric generation has been subsidized, electric energy prices have inevitably risenSometimes more than politicians expected or likeBut removing long term subsidies can cause political problems from business and the noisy "green lobby".  Consumers just grit their teeth and vow to vote their pocketbook when possible.

  However, some larger electricity users have other optionsOne of the best is to use Natural Gas that is already purchased for heat generation to run an in-house electric generatorTen years ago that option was only for the very large users because of the expense of the capital equipmentToday there are several options for even modest users; as low as 10MWh / month.

Two companies in this business are Capstone Turbine, CPST and Fuel Cell Energy, FCEL

Capstone uses a 100k rev/minute gas turbine, directly coupled to an alternator, to produce electricity that is converted to local line format by an ancillary electronic power switching systemThe turbine is quite compact for it's power outputIt uses an exhaust heat regenerator for improved efficiency and can easily accept a secondary heat exchanger to heat water or make steam. It requires very little in the way of auxiliary inputs; a fuel supply and an exhaust stackElectrical efficiency runs about 35 to 40%, depending on size and optionsCost is about  $1k/kW, uninstalled.

Fuel Cell Energy sells fully developed, molten salt high temperature fuel cells for stationary energy generationThere FCs can accept clean natural gas and operate at an electrical efficiency of near 50%.  They can also have their waste heat routed thru a heat exchanger for hot water or steam generationTheir advantages are superior electrical efficiency and quiet operationHowever, they tend to require more maintenance and have a substantially higher purchase cost per kW

  Their exhaust is very clean, assuming the fuel source doesn't have any contaminants such as sulfur oxides. These fuel cells also use electrical converters to change their DC output to line frequency AC power, so that added cost is similar to a turbine generation system.

  Considering that both systems produce "free" electricity if you already burn the NG for heat, the cost of money is the main impediment to their useAt today's interest rates the Capstone turbine payback period can be 4 years or lessI foresee many companies who are suffering from rapidly rising utility electricity prices adopting one of these technologies to avoid involuntarily joining the "green revolution" at the cost of their competitive position.
Stocks: CPST, FCEL