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September 21, 2006

Trade Stocks With Zero Commissions?

Yes, the heading is right, zero commissions on trading stocks, not just low commissions.

Zecco, a start-up allows consumers to trade stocks for zero commissions, versus $10 to $20 that many online brokers charge today.

Morten Lund, on of the guys behind Skype, believes he can offer zero commission trading and recover costs from advertising on the site. Let's hope he is right.

The launch of this appears to be in about 18 days.

Full Story on Zero Commission Stock Trading at Zecco

September 20, 2006

The Fuel Cell: Now, and in the Future

Overview

In light of oil prices reaching 60 to 70 dollars a barrel, attention is being paid to alternative energy technology, in the hope that it might answer our problems. The major role player right now, especially in terms of replacing combustion engines in cars and trucks, is the fuel cell industry. There are many types of commercially available fuel cells, ranging from ethanol to hydrogen. However, our readers and the public sometimes find it hard to keep up with all the technological terms and the latest inventions and research. This is a simplified summary of the science behind fuel cells, the types of fuel cells, as well as obstacles we face commercializing fuel cells and what companies are doing to overcome those obstacles.

What is a Fuel Cell?

A fuel cell is, as the name suggests, a compartment or a box-like structure that uses different methods to burn fuel and convert it to electricity. The ‘cell’ can be made of plastic or metal, depending on the contents of the cell. Even a combustion engine is a fuel cell that burns petroleum to produce electricity. However, fuel cells themselves can use a large variety of fuels for the same purpose. Inside the cell, the fuel is broken down to release electrons (electrical energy, if you will) that are captured in a built-in, causing a current to flow. In all fuel cells, there are certain chemicals produced as by-products—they can either be harmful, or harmless. The conventional type of fuel cell that we speak of today is quite different from a combustion engine, or a solar cell. Fuel cells today specifically refer to machines that produce electricity using a fuel other than oil or gasoline, and do not use other alternative energies such as solar power.

Advantages of Fuel Cells

Most fuel cells that we know of produce little or no pollution. Little means that whatever pollution is produced, it doesn’t contribute to the overall greenhouse effect the way, say, gasoline combustion or fossil fuel usage would. For example, a hydrogen fuel cell, which splits hydrogen gas (or water) to produce electricity, produces nothing but water as a by product. An ethanol fuel cell produces carbon dioxide, a greenhouse gas that contributes 9-26% of the total greenhouse effect. However, there are biological sources of ethanol (i.e. compost, corn), and this way, carbon dioxide released does not increase greenhouse gas emissions.

Fuel cells have a wider range of uses than engines and batteries. Fuel cells can be scaled up to be used as stationary power plants, the way we use hydroelectric damns and wind mills now. In addition, fuel cells can be scaled down to a level that rivals batteries, and can be used to power cell phones, mp3 players and other common gadgets. It only gets better—fuel cells, especially hydrogen fuel cells, are being optimized to work as engines (a medium level scale) to power cars. GM has recently announced that it will release as many as 100 cars on to the road by 2007—cars that will be powered only by hydrogen fuel cells.

Fuel cells have much higher efficiencies than combustion engines. Combustion engines average at around 30% efficiency, while fuel cells range between 45 and 70%

Some fuel cells are renewable. This means that the products of the reaction going on inside can be recycled into the same reaction. For example, hydrogen fuel cells split water to produce electricity, and the only by-product is water. Such a system could prove to be very cost effective and long lasting, as compared to batteries and engines, which consume fuel but cannot reuse it.

Obstacles We Face

1. Fuel cells are very expensive, not due to the fuel use, but due to the materials required to capture the electricity. Electrodes used in the circuitry are usually made up of platinum, a highly expensive and rather rare metal. Sometimes, fuel cells require membranes to separate their electrodes, and these membranes are very costly.

2. Certain fuels, such as methanol, are either toxic or very costly. Other fuels, such as hydrogen gas, are required in high volumes to be of any use. However, compacting hydrogen gas in a small container is an explosive hazard. In still other cases, obtaining the fuel from its basic sources is very expensive and even if the fuel itself is clean, obtaining it can be very polluting.

3. There is not much infrastructure available around the world to accommodate a large-scale change from typical energy sources (gas, fossil fuels, batteries) into fuel cells.

Solutions?

1. Although fuel cells are expensive, the costs are being brought down by using cheaper material in larger volumes (i.e. a cheaper carbon electrode that is larger, instead of a smaller, expensive platinum electrode). In addition, research in biotechnology is providing cheap materials that have similar properties to plastics and metals.

2. Toxic fuels can be replaced by those that are not—such as replacing methanol, which is toxic, for its close relative, ethanol, which is harmless. Hazards can be avoided by engineering fuel cells to be more efficient, so that volumes of required fuel can be reduced. Biotechnology also helps in reducing the cost of producing the fuels. Certain bacteria and algae produce hydrogen gas naturally, which can be harvested at almost no extra cost. Ethanol fuel can be obtained from corn and sugar cane, a much cheaper process than obtaining it from other sources.

3. The only way to increase infrastructure is through the increased commercialization of fuel cell technology. As companies release more products, and as those products become popular, governments will naturally provide infrastructure (i.e. hydrogen pumps, instead of gas stations) to accommodate the rising demand. Money that is now used to reduce pollution released by fossil fuels can be instead used to build an infrastructure for cleaner fuels.


The Future

I believe that fuel cells have a very bright future, especially since they are cleaner and economic in the long term. There still is a lot of work to be done in research and in commercialization before fuel cells are used widely, however companies that are focusing their research and products on fuel cell technology have the potential flourish and succeed like never before. We can expect to see fuel cells becoming more efficient, cheap and we can also expect to see fuel cells hitting the market on a larger scale, perhaps within the next 10 to 15 years.

September 19, 2006

Ammonia Fueled Irrigation Pump System Announcement by Hydrogen Engine Center

Jeff, one of our readers alerted me to an announcement that is definitley worth sharing.

Hydrogen Engine Center, Inc., one of the stocks (HYEG) on the stocks page made an announcement that they will be working with Sawtelle & Rosprim to design and build the world's first Ammonia Fueled Irrigation Pump System. This is intended to help California meet its new emissions requirements scheduled to go into effect in 2010.

Hydrogen Engine Center, (HEC), is building a prototype system based on HEC's ammonia-fuelled engines and Sawtelle's pumps. They want to test the prototype for the California irrigation season in 2007 and if all goes well, they are hope to sell the system to California in 2008.

A few other interesting things from that press release:

  • ammonia is the second most prevalent chemical in the world.
  • an infrastructure for ammonia is already in place
  • ammonia pipelines can be found in many areas of the United States, including Iowa, and distribution of the fuel is already established.

    Will be interesting to see what happens with this, HEC is seeing a nice pop today of almost 10%.

    Jeff also let me know that the ammonia announcement follows the news last month that HEC entered an agreement with Grasim to fuel generators using waste hydrogen from their chlorine manufacturing process.

    Thanks Jeff for letting us know.

  • September 17, 2006

    From Microbes to Megawatts – Watch Out for Microbial Fuel Cells

    Finding the latest discoveries and the recent developments in energy research can lead to some home runs in investing. Microbial fuel cells are in their infancy today but this emerging technology shows promise to one day be the cornerstone of highly profitable companies.

    What are Microbial Fuel Cells ( MFC’s )

    Most of us have heard of fuel cells. In a ‘traditional’ fuel cell, hydrogen fuel is combined with oxygen to create electricity with water as a byproduct. Microbial fuel cells are biological fuel cells that use bacteria to create electric power with a sugar such as glucose being the fuel source.

    In consuming the glucose fuel source, the electrons the bacteria are disposing are sent to an electrode which completes the biological circuit. Some bacteria range from 60 to 80% efficiency, in that they can transfer up to 80% of the available electrons in a glucose molecule to an electrode. Compare this to the efficiency of a combustion engine, 30% in passenger vehicles!

    The Advantages of Microbial Fuel Cells

    In addition to having very high fuel efficiency, microbial fuel cells produce very little pollution. They are inexpensive compared to a full metal combustion engine and they pose no explosion hazards such as the hydrogen fuel cell systems.

    Uses of Microbial Fuel Cells

    Microbial fuel cells have a diverse array of potential uses.

    Since a wide variety of organic fuels can be used as the fuel source in a microbial fuel cell, this allows for microbial fuel cells to be used in a wastewater treatment plant to consume waste material while producing power. MFC's in this application are really being efficient since they are both eliminating wastewater and helping with the energy demands of the treatment plant.

    Microbial fuel cells also have the potential to power vehicles and have gained some interest from car makers.

    MFC's may also one day power tiny devices such as pacemaker, micro sensors or a micro actuators. In these future applications, MFC's would be implanted in the body and use glucose from the blood. The advantages in using MFC's for this over batteries would be a smaller size and the fact that that MFC’s would present a renewable energy source that would not require recharging.

    Development and Advancement in MFC’s

    Two scientists have taken the foreground and the spotlight in what is now called microbial fuel cell research.

    Derek Lovley at UMass

    Derek Lovley at UMass was recently awarded a 22 million dollar research grant (yes you read that right) from the U.S. Department of Energy to continue his work on these fuel cells. Lovley aims to one use these fuel cells in the industry to power marine devices or to create self-powered wastewater treatment plants. Toyota has shown some interest in his work, and has funded some of his more recent research. Toyota sees the potential for a clean technology that is cheap and poses no explosion hazards.

    More on Derek Lovley and his work:
    Geobacter Project at UMass
    Derek Lovley Bio

    Bruce Logan, Penn State
    Bruce Logan’s research focuses on microbial fuel cells as well, specifically the ability of these fuel cells to treat water and produce electricity simultaneously. While companies may not yet have taken as much of a keen interest in his work the way Toyota has for Derek Lovley, Bruce Logan’s work will likely garner lots of attention in the near future.

    More on Bruce Logan and his work:
    Bruce Logan Bio
    Microbial Fuel Cells at Penn State
    Microbial Fuel Cells at Science Daily
    Microbial fuel cell at PhysLink

    The Future of Microbial Fuel Cells

    Microbial fuel cells will be used in many successful future products. Research is leading the way. While this may be the first you have heard of microbial fuel cells, we think you will be hearing a great deal more about them in time to come.

    We here at Alt Energy Stocks will certainly keep you advised of these exciting developments.


    NOTE: This post was co-authored by Kartik Madiraju. Kartik is an exceptional young man who will be blogging with me here at Alt Energy Stocks. You will be hearing more from Kartik soon and I will be giving him a formal introduction, but for now, I hope you enjoyed his insights in this post.


    September 11, 2006

    The Alternative Energy Revolution - Summary of Industry Sectors

    Last week I was speaking to Jim Atkinson of Guinness Atkinson Funds (or GA Funds) (see Disclosure below). Jim sent me document or research paper called, "The Alternative Energy Revolution" which was written in April 2006. The document is usually accompanied by a prospectus for the GA Alternative Energy Fund.

    Today, I am not commenting on the fund itself but will summarize some of the information I found important in "The Alternative Energy Revolution" paper. A link to the document itself follows my summary. Please note, I am simply presenting the information and numbers in the document.

    Alternative Energy Revolutions Summary
    The paper was definitely written from a 'pro' alternative energy perspective. It starts out presenting the familiar case that world energy demand is increasing and our oil supply is running out.

    Energy Consumption and Oil

  • 2 billion of the world's 6.4 billion people still do not have electricity
  • there is one car for every 65 people in China
  • China is expected to have 7-fold increase in vehicle ownership by 2020
  • a 50% increase in worldwide energy demand is expected by 2030
  • 'peak oil' is defined as the year in which half of exploitable oil is gone
  • peak oil estimates vary but some believe it is between 2015 and 2020
  • investments in oil are not being made by major oil players

    The paper gives early on a word of caution about investing in alternative energy. It is a reality that applies to all alternative energy investments: alternative energy investments are largely thinly traded small cap stocks that have had significant recent appreciations due to increased energy prices.

    All revenue numbers below are worldwide revenue numbers stated in U.S. dollars. Projections and forecasts cited in the paper were taken from a variety of sources.

    Solar Industry
    Revenue in 2005 - 11.2 billion
    Projected Revenue in 2015 - $51.1 billion
    Two parts of solar industry - photovoltaic and thermal
    Investment opportunities are mainly in photovoltaic. High cost of high-grade polysilicon required by solar industry keeps solar costs high. Polysilicon shortage forecast until 2008. No major technological breakthroughs expected in solar industry over the next few years.

    Wind Industry
    Revenue in 2005 - $11 billion
    Projected Revenue in 2015 - $48.5 billion
    Least expensive of the modern renewable energy sources and comes closest to competing with oil an economic basis.
    New materials have increased efficiency and reduced cost but significant further technological advancements are not expected. Improvements expected to come from more efficient manufacturing processes.
    Emerging areas in wind technology are off-shore wind power and microturbines for home and small business use.

    Hydro
    Revenue 2004 - $20 - $25 billion
    Cheapest form of electricity over the last 200 years.
    Other benefits of water control, flood supply and irrigation. (Granted, many will argue with this statement.)
    Obstacles include significant capital investments required and environmental opposition. Substantial opportunity in small hydro (less than 30 megawatts)

    Bio-Energy including Bio-Ethanol
    Revenue 2004 - $15.7 billion
    Cheapest bioethanol fuel is sugarcane in Brazil, followed by corn and sugarbeet in Europe
    Bio-ethanols from different sources is competitive with oil at the following prices: Sugarcane when oil is at $30/barrel, corn when oil is at $50/barrel, sugarbeet when oil is at $70/barrel
    Biofuel's biggest problem is not technological - obstacles are tariffs on developing world production and land shortages.
    Industry is poised for considerable growth.

    Fuel Cells
    Revenue in 2005 - 1.2 billion
    Projected Revenue in 2015 - 15.1 billion
    Devices that convert oxygen and hydrogen into water while making electricity.
    Growth in fuel cells will come from portable devices (cameras and MP3 players) and stationary devices.
    Fuel cells in vehicles have a long way to go. Must bring down costs dramatically and this is not expected in the near future.
    Hydrogen generation must also become less costly and less dependent on oil as the source of hydrogen.

    I do recommend having a read of the whole article, you can find it here:

    PDF Download: The Alternative Energy Revolution

    In reading the size of industry figures above, the following occurred to me. Exxon Mobil profits in 2005 were $36 billion. These of course are profits and not revenue figures as provided above. The worlds largest oil company made more profit than entire alternative energy industries made in revenue.

    Disclosure: Guinness Atkinson Funds now sponsors the site through advertising. The advertising banner for GA Funds can currently be seen on the right hand side of the homepage.

  • September 06, 2006

    CleanTech Investing Still Needs To Make Money

    A recent post by Tyler Hamilton at Clean Break brought a few things into focus for me.

    On cleantech investing, Tyler says:

    the fact remains if you want to get businesses to embrace a more sustainable way of operating and convince consumers to adopt a more sustainable lifestyle you've got to go back to basics: Will this lower costs/monthly bills? Will this improve operational efficiency? Will this lower risk? Will this give me an edge over rivals?

    I could not agree more. In my opinion, there is also an important analogy between the adoption of clean technologies and investments in those clean technologies. The analogy between adoption and investment shows that these two things will ultimately have similiar paths.

    For clean technologies to be adopted, they must be supported by economic benefits to the end users of those technologies. They must strengthen the business case for the customer. If the economic benefits are not there, the usage of these technologies cannot be sustainable. Goodwill runs out when the money runs out.

    The lack of adoption of a clean technology will of course impact an investment in the company. When we invest in a company, we own a piece of that company. Over the long term, if the company is not profitable because its products are not being adopted, our investment in that company will reflect the performance of its products. If you are investing in alternative energy companies because it is the right thing to do, but you are continually losing money, there is just so long that can last despite all your good intentions. The profits of a company or lack thereof will bring that reality home to you as an investor.

    The adoption of clean technologies and the investment in clean technologies both must be justified by economic benefits - it cannot just be the right thing to do. If economic benefits are not there, the adoption and investment in these technologies cannot be sustainable.

    Here's to saving the world by investing in profitable clean tech companies!

    At some point later in time, I would like to add a forum to this site to facilitate interaction amongst the readers and to create a community. Right now, I just have the comments section of this blog.

    For today, I am asking that you use the comment section below if you would like to tell us about an alternative energy (or clean technology/environmentally friendly) company that you are excited about. Tell us what the company does, why you like them and the potential of the company and their products.

    Of course, your comments on the post itself are always welcome.

    September 05, 2006

    Exciting Changes at Alt Energy Stocks Website and Blog

    I am pleased to announce that Alt Energy Stocks has changed ownership. Alt Energy Stocks was acquired from MDA Holdings by 2043835 Ontario Limited. Mark Anderson, the previous editor, did a great job of making Alt Energy Stocks a valuable resource for investors in alternative energy. Unfortunately, in the last few months, other commitments prevented Mark from putting in the in the time the website needed. And that is why the website has come under new hands.

    I, Brian Gomes, will be the new editor and blogger for Alt Energy Stocks and I am looking forward to making this website the premier destination for alterative energy investors. I know that if your needs are served, this will happen.

    The site will continue to be devoted to providing information on alternative energy investing. The changes that are planned for the site are aimed at improving the information that the site delivers.

    Starting to Blog
    I am going to start by getting myself acquainted with the alternative energy community. I have subscribed to a number of feeds and will be monitoring them on a regular basis. I plan on sharing with you interesting things I come across and I will also be giving you own perspective on alternative energy and the investing landscape.

    Research Articles for Alternative Energy
    I am also planning a series of research articles that will be summaries for alternative energy topics such as: Ethanol, Fuel Cells, Solar, Wind etc. For each technology, the articles would provide information such as:

    • a brief explanation of what the technology is and how it works
    • benefits of the technology
    • the state of the current technology
    • the types of products and services currently being developed and their current usage levels
    • risks for the adoption of the technology
    • the leading companies (and the associated stocks) that are developing this technology

    This will help bring me up to speed on where the industry is at and I hope you find them useful as well. You will likely see a few 'regular' blog posts before I can get to these research articles.

    Automated Alternate Energy News Gathering
    Longer term, we are also developing some software for the site that will provide an automated system of gathering and organizing the most relevant alternative energy investing news from around the web. This system will scan many of the blogs and news sources you may be reading and others you many not be familiar with to bring you the most important news.

    Snippets of stories will be displayed on the site and a link will lead you to the full article where the story is located. We think this will be a great time saver that will point you to important news affecting alternative energy investing. If all goes according to plan, this should be in place before the end of 2006.

    Other Editors and Bloggers
    I am also looking at adding other editors in addition to myself. This would mean more frequent posting to the blog and posts from a different perspectives as well. I am in the process of looking for editors but if you or someone you know is interested in writing for us, please let us know.

    This is what we have in mind but it is really your feedback will really help to make the site better. Please tell us what types of things you would like to see on the site.

    I hope this gives you an idea of what you can expect from Alt Energy Stocks in the coming months. Please share your thoughts on the changes planned.


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