Old Wizard

Are Energy Storage Investors Chasing Their Own Tails?

Another good article, John. I caution you not to be too exuberent about GE's announcement. Immelt's stuardship at GE has not been exactly a rollicking success. The stock price, net profit, dividend, and product market share on engines, appliances, lamps and even generators to a lesser extent has decreased during his tenure while the risk in GE capital has increased leading to a downgrading of GE's corporate bonds. Deals like the one made with Warren Buffet weren't particularly advantageous for existing stock holders. The announcement, while making some sense from their new thrust into the green energy era, seems to be playing more to the politics of the country. GE management is on the Obama team and has gotten guarantees that it can go to the Fed loan guarantee window as a back up to shore up the cash requirements in GE Capital. Given the bet Immelt has made on windmill farms, electric grid management and medical record computerization, he must support the administration programs and 100m is good pr. The only problem is that demand at this point is pretty much Gov. fostered and may or may not be real, take longer to develop so that break even can be realized and not represent what the 200k or less user wants, needs or can afford. For example, what real evidence is on the table that leads us to believe that the railroads of the world want to buy and can afford hybrid electric train engines that makes the investment viable and at what point would their new batery venture coincide with a real windmill market. The Gov.'s goal is to provide 20% of todays generating capacity from wind and solar by 2030. Is the payoff from this investment going to break even in the next ten years? If I were running the ship I would be more inclined to build train engines that ran on natural gas, but my measure of performance would be nearer term and not driven by as many unpredictable dependencies such as politics, speed of windmill facility installation, development of high temperature reliable and safe batteries, and the time horizon of when effective electric grid management from wind generated electricity of any magnitude is brought on-line.