Misha

Alternative Energy Industry Outlook

Hi Chris B. and others,

Thank you for your comments. The starting point of my interest in RZ was, in fact, Ormat (ORA) and, like you, I cannot bring myself to buy it, though I am really intrigued by geothermal and apparent lack of interest in it from major players and experts/pundits.

Low T geothermal makes very good sense to me. Though in most cases you would not be able to build a mayor power plant around, it should be possible to supply good part of local energy demand in many locations, especially in the Western states (www1.eere.energy.gov/g... ; see also www.msnbc.msn.com/id/2.../ as an example of geothermal for local use). The question is how to act on geothermal potential.

I have the same concern with Razer. If you listen to www.rasertech.com/medi..., you will likely conclude that Patrick is an idiot and the company is a joke. There is no real connection between the two business segments, as you correctly pointed out. There is no IP to speak of. The whole well-to-wheels thing really stinks. It is not clear how they even stumbled into geothermal line of business.

All these said, why am I still interested in RZ? Because I am yet to find a better alternative.

The way I see it, geothermal is currently underappreciated (maybe for a good reason; thus my original question). The basic technology is well established. Surprisingly, this may be a benefit for Razer with apparently little in-house technical expertise: you can simply buy the equipment (which is apparently what they are doing with UTC) and outsource technical execution (design, drilling, construction, etc.) There are two more possible reasons to be interested in Razer. First, you can view them as an exploration/ mining company that was lucky to find a resource and secure promising leases. Second, they are early in the game (I believe they are only the second entity to install UTC’s low-temp generators).

With little barriers to entry and no technological advantages, there is no doubt in my mind that longer term RZ is a local payer (UT, NV, ID) at best. However, in the current climate of interest in renewable energy that may be followed by real state and federal development incentives and the first mover advantage that will initially help with visibility and new project, RZ may be of an intermediate term interest.

My mind is not set yet, so all opinions are welcomed, including technical perspective.


On Jan 16 05:02 PM Chris B wrote:

> Misha,
>
> I'm intrigued by Razer too, but I have serious concerns about management.
> Just go to their website to see what I mean. They have 2 divisions:
> geothermal electricity and manufacturing electric motors. These
> two industries have nothing to do with each other and no apparent
> synergies - strike one....

Alternative Energy Industry Outlook

Can some one comment on the rational for a less favorable opinion on geothermal (e.g. RZ)?