How to save 40 power stations

[dieseltaylor]

This is a piece from a company called Zenergy who have sold their first piece of HTS* kit through another company to E.ON probably the biggest power co. in Europe. [*high temperature superconducting]

I just love it when science actually can improve old technology

Hydropower is currently the most widely used and mature source of renewable energy and contributes to the production of about 19% of total electricity worldwide. On a global basis, hydropower is averting the emission of some 800 million tonnes of CO2 every year. Since generators based on HTS technology can deliver energy at considerably higher efficiencies than existing copper generators, it is believed that 15.4 GW could be produced `for free' as a result of their retrofitting using variable speed technology; thus offsetting any further environmental impact. From an investment and infrastructure perspective this is equivalent to deferring the deployment of approximately 40 conventional power stations demonstrating the significant contribution to Kyoto-protocol targets that HTS materials can have. The current addressable market for the Group's HTS materials and components within the renewable energy production markets is estimated to be in excess of Euro4 billion per annum.

[ASL Veteran]

Looks like it's still pretty speculative to me. It's hard for me to get decent info on it because it doesn't trade on the NYSE, but from their own website's investor relations sections you can see that there isn't much volume on that sucker and the trend has been down. You can go into the press release section and compare the press releases to certain ... I guess call it 'higher volume' days (up to 300,000 shares). Most days though almost nobody is interested in this security. I'm sure that you are just excited about the technology, but the market is telling us that it doubts whether these guys can pull it off. If this was the next huge breakthrough in power generation the stock price would be skyrocketing and the volume would be tremendous. Apparently 23000 shares traded today in Europe and the market there is closed by now - compare that to a mature company like IBM that trades over 11 million shares in one day or GE that trades 107 million shares and you can see that 23000 shares is practically not trading at all. I've personally placed orders in the millions of shares (not for me personally of course )The spread on that baby is probably huge, but they don't have the spread listed on their website and I can't tell what currency they are using or what it means in dollar terms. If the spread is like a couple of bucks though I wouldn't be surprised. Buy at your own risk.

[SgtMuhammed]

Some version of this is undoubtedly going to be made. Whether or not this is the company that is going to make it is still quite iffy.

[dieseltaylor]

I was quoting todays regulatory announcement which is ahead of the site I suspect though if you look in the Press section now you should find it. The price is 105p though for non-UK it would be difficult to hold - sorry I am not recommending it as a purchase just pointing out that UK stocks are not easy to hold from the US. Good ideas do not necessarily make a company profitable and shareholders happy - and there could be technical problems and it could go tits-up! : )

I think it is more advanced than speculative as this indicate:

The full-scale coil in question was constructed by the Group at its purpose built facilities in Rheinbach, Germany and will be used in the construction of the world's first HTS based hydro-electric power generator that has been ordered for commercial use by E.ON Wasserkraft GmbH (`E.ON-WK'). The HTS hydro generator will be manufactured in the United Kingdom at Converteam's facilities based in Rugby and will deliver significant improvements in electrical energy efficiency to E.ON-WK's commercial hydro-dam and consequently increase its overall power output by 36%. As Germany's largest producer of hydro-electric power, E.ON-WK currently produces more than 10 billion kilowatt hours of hydro-electric power per annum. Following this significant endorsement of the Group's engineering capabilities, Zenergy will now begin construction and delivery of the further 32 full-scale coils required for the construction of E.ON-WK's 1.7MW hydro generator which is due to be installed into their commercial dam next year. Once installed, the groundbreaking HTS generator will be the hydro-dam's 'pole' generator and responsible for the constant delivery of base-load power to over 3,000 homes in the local area.

I am most impressed with the 36% uplift in output. On that basis the economics for hydro have just improved somewhat : )

I am not a great fan of number of shares traded as being especially useful indicator of value. Particularly in small co's there are simply not huge numbers available. I was quite annoyed recently when a stock trading rag poked the AIM - a small company market - for the limited number of shares traded the previous month. Given a high number are developmental companies where trading tends to happen with announcements of technical breakthroughs or sales it seemed daft to consider it would have a high level of churn. Idiot journalists. : )

[ASL Veteran]

Well the volume is important because if you are a hedge fund and you really like this stock, when you place your order for 200,000 shares you may take a hit because if you can't find a seller large enough to give you the stock in a block trade your average price will go up with each dinky buy. You will literally move the market with your one order. Low volume generally means big spread too because the market maker doesn't want to get stuck with a bunch of lousy stock, so if the spread is say 40 by 45 then if you can get your entire order filled at the ask (45) then you can't unload it for anything more than the bid (40) if you need to unload it in a hurry. So by default you are already losing five bucks a share on your buy. Multiply that by 200,000 and you are risking a million bucks out of the gate just by buying that stock. In some cases you can't even find enough buyers if you want to sell a large enough order and you get stuck with it (effectively making it worthless if you can't sell it).

I'm sure someone like GE has their knife and fork out and are watching pretty closely. If the technology looks promising enough GE will eat them. You will know that rumors are out for something like that when the volume steadily spikes up because everyone will want to get in on the ground floor before the acquisition. Once GE starts looking at these guys with a hungry appetite then you will know that they are on to something. If GE (insert big turbine manufacturer here) doesn't care about it, then nobody else will either.

[dieseltaylor]

http://finance.google.co.uk/finance?q=LON:ZEN

Not really a hedge fund vehicle I would have thought for, as you say, not really enough liquidity in the shares. A long term investment.

I see they have an agreement with Honeywell on a long term collaboration on chemicals for making HTS wire. Honeywell are an acquisitive company who will have greater insight eventually in the economics and marketplace - and they understand small turbines. I guess two years to see if this is going to be a flyer or a flop - but the technology certainly seems to have some big fans.

I find it quite fascinating that there is so much tech out there currently.