I've mentioned Iceland and geothermal power several times in the past as being a potential catalyst for the country to start on the path back to being a viable investment destination. A few days ago I caught a show on CNBC World called Deal Flow which is a quirky show where the hosts, who seem to have Regis and Kelly thing going (so said my wife), try to delve into topics with potential investment merit. If you look at the topics on the website you'll see that they actually cover some interesting ground.
Geothermal and hydroelectricity have intrigued me but I've never invested in either one. I think the reason that I do find them intriguing is that unlike solar part of the theme doesn't rely on homeowners spending a lot of money (even with various subsidies) to have green energy. This is part of the logic in having owned FPL Group (FPL) for clients for so long (FPL has a huge footprint in windpower).
In watching the show it was mentioned that about 20% of electricity in Iceland is geothermal and about 70% is from hydro (according to Wikipedia the numbers were 24.5 and 75.4 respectively in 2008). Geothermal accounted for 87% of heat at hot water requirements.
Geothermal is available in numerous places around the world so this is not an Iceland post beyond the fact that I think it can play a big role in any potential economic revival of the country.The program interviewed people from a fund domiciled in Iceland but with operations all over the world (California, Canada, Mexico, China and the Philippines) called the Geysir Green Energy Fund. As best as I can tell the fund is not traded on an exchange and since there latest annual report is from 2007 (the TV show appeared to be a couple of years old) I'm not certain the fund still exists but the site and and all the info within is pretty good way to learn more about the subject.
For now the easiest way to invest in the segment might be Ormat Technologies (ORA). Ormat is based in Reno but has a presence all over the world. The stats aren't great, it is somewhat volatile and many of the folks in management all have the same last name but it should be obvious that buying into this theme is far from riskless.
If you look for other "geothermal" stocks on Yahoo Finance you'll see a few other names trading for a dollar or less. If you know of any other names please leave them in the comments but I'd rather not turn this into a series of touts for stocks trading in Vancouver for $0.12. According to this article from Seeking Alpha from a couple of years ago IdaCorp uses geothermal in what appears to be a similar way that FPL used windpower, you should explore that on your own as I cannot vouch for it. Here are two more recent articles here and here.
8 comments:
I think you should re-emphasize your comment about stocks trading for under a dollar. This sector does not seem ready for mainstream investing. Like the average reader may lose his shirt.
Geothermal has great potential, but like all good things has critics....typical enviromental issues, cap ex/kwh, l/t heat supply curve, etc. Big plus is that it is good for base load power...still needs government support and/or locations with high power costs....but right up there with wind as being competative with $8+ natgas with base load benefit. IMO big oil is in the best spot to benefit at some point.
There is geothermal and there is geothermal
Normal geothermal uses energy spewing out of the earth naturally.
If you scale this up to make it profitable you start extracting energy from the earths core and help cool the earth. Accelerated cooling of the earth causes the core to contract. Less molten core will eventually cause the earths magnetic field to weaken allowing in more cosmic rays.
While this could take a very long time, I do not think we should use geothermal energy when wind, hydro, and solar panels seem a more positive path to scale up in the long run.
NGP.tse is $1.21 Cdn. Way more than 0.12 (humour attempt).
Most of the geothermal stocks I can think of are cheap and trade in Vancouver.
As an aside, a company that might interest you is ALFA on the SEK. Nice dividend and seems to have a nice niche, good dividend in Kronas. Long for a year.
dnf
NGP trades in the US as NGLPF. I recently closed my position after an 80% profit (i.e after it went over $1) as they are about to actually start producing power (sell on the news).
Anon 5:49: do you know any power utilities that do not benefit from government support? I don't.
"many of the folks in management all have the same last name"
Comedy gold. Reminds me of an LP I own. Working out so far.
Hello Roger,
the last post I made was about a week ago and mentioned that we might be in a final upsurge phase in the market. I still have not changed my views and feel the final push will be up to 1166 S&P.
About alternative energey. One think that I have find out which is early for it to make a full circle is that tiles could be an alternative energy source. They of course compete with solar panels. As matter of fact I had reccomended an italian tile stock.
Will keep on looking at your blog and like to wish the best to all,
Jeff from Milan Ital
Anon 7:20AM - Einstein would like a chat
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