Investing in Renewable Energy Stocks
Alternative Energy Companies Can Power a Portfolio
Sep 27, 2009
The best medicine to rescue the ailing economy may be the same thing to avoid having in a home: algae. After decades of research, much of it funded by the United States Aquatic Species Program, algae bio-diesel production is only two to three years away from entering our energy supply in a meaningful and profitable way, according to Solazyme, Inc.
Algae Leads Green Energy Alternatives
Algae bio-diesel production is the holy grail of alternative energy in liquid fuels. Solar cells are not going to power a transportation for carrying people away on vacation or to a business meeting. Algae bio-diesel already has powered vehicles. A portion of the mandated change to bio-fuels such as the B50 requirement, where 50% of the fuel must come from renewable resources, will be fed by algae once the commercialization challenges are overcome.
All of the other popular feedstocks such as corn, soy, jatropha, rape seed, palm oil, and casava are far behind algae in how efficiently they produce bio-diesel. Algae does not require thousands of acres for producing large quantities of fuel. In one acre, highly productive algae will yield as much as 1850 gallons of oil, while most crops produce well below palm oil at 650 gallons.
Renewable Bio-Fuel Companies
China has a powerful entrant with ENN Solar. Already a major supplier of natural gas, it has grabbed the lead in developing closed system algae bio-reactors. With profits from their other businesses along with partnerships, and connected to both the government and into the utility industry, ENN Solar will have commercial installations first. While shares are not available for public purchase yet, they will become available in the future and they may become a leading player.
Cellena is a joint venture between Shell and HP Biopetroleum. They have not been aggressive in getting their story out, and are in the process of building test reactors in Hawaii.
Bodega Algae from MIT, has a lower cost, higher efficiency process that is progressing toward commercialization. They have a small team without significant corporate sponsorship, but their technology has merit because it overcomes a technical hurdle for large scale production. They have figured out how to get light inside a dark algae tank. Either they gain funding soon, partner, or sink- soon.
Solazyme uses sugar instead of light for feeding the algae stock. They partnered early with energy companies and are already in commercialization phase. These are small scale production systems currently. Although currently privately held, they are focused on becoming a public company as soon as their business model and technology prove their viability. Within two years, Solazyme could be a potential IPO candidate promising tremendous upside potential.
Aquaflow Binomics shares can be purchased in the public market now. They are a New Zealand based bio-fuels company approximately four years old. They have a very thinly traded stock, but it is one of the few pure algae plays investors can buy into without having to be part of a private placement. Their focus is on using waste algae from sewage systems for bio-fuel production.
These are a few of the horses in the exciting race to see who commercializes this potentially critical technology. More than likely ENN and Solazyme will lead the pack, but all of them could become very valuable when the oil price spike again.
One way to profit from these companies is in the warrant and options market for their shares as explained in this options article.
Sources:
1. Opportunities and Challenges in Algae Biofuels Production. 2008 Dr. John R. Benemann
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