Despite persistent rumors of various groups working to take Calpine private, it looks as though the company will try to make a go of it alone. The June 20 target to emerge from bankruptcy is fast approaching meaning one window for this decision is about to close, of course, another will open thereafter but the terms and situation will be vastly different.

One has to wonder if the run up in the stock price will be sustained with the changing view point on going private? Will investors be patient enough to see what the impact of Calpine’s relatively clean power can bring on the market? Given that the company has some 25,000MW of generation (700MW geothermal the balance natural gas) it is positioned as a clean energy provider in a time that coal generation is under attack. The company has made progress on restructuring its debt and streamlining its portfolio. But it’s unclear if the resulting company will be consistently profitable.

But is that enough? Prices of natural gas continue to rise squeezing margins. The geothermal bit of the portfolio is very interesting and productive, but is less than 1/25th the entire company’s generation capability. Yes, the fuel is “free”, but the cost of accessing the fuel over the lifetime of the plant is paid up front with exploration and drilling costs. Clean energy will command a premium price, that’s clear. How much of their portfolio can take advantage of that market trend? We shall see.

It’s unclear what Calpine is really worth at this point and we can’t tell if the issue provides good value or not. But, we’ll watch with interest as Calpine emerges from bankruptcy and as we can determine a fair valuation for the company, we’ll share it. Right now, it’s chock full of unknowns and potential upside.

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UOIT System Diagram


Recently we ran across a short article that describes at a high level a project the University of Ontario Institute of Technology has to use geothermal resources for heating and cooling.

The system consists of three hundred and eighty-four holes, each 213 metres (700 feet) deep, will provide the basis for a highly efficient and environmentally friendly heating and cooling system, capable of regulating the temperature of university’s new buildings. A glycol solution, encased in polyethylene tubing, circulates through an interconnected, underground network. During the winter, fluid circulating through tubing extended into the wells collects heat from the earth and carries it into the buildings. In summer, the system will reverse to pull heat from the building and place it in the ground.

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There is a new not-for-profit web site aimed at mobilizing the community to drive change in ZeroFootprint.net. Check it out, it’s now in beta, but has a promising look and mission to it. You can find products, buy offsets, and interact with others in the community. We’ll see more of this sort of thing in the future.

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Yet another turbine design is the vertical 5m variety offered by Quiet Revolution in the UK. This turbine is rated at 6kw and cuts in around 4m/sec and out at 16m/sec. The company claims there is very little noise or vibration from this turbine design and that avian death is not likely. The company has plans for a 2.5m and a 12m design in the near future.

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If you watch one YouTube video this year, this should be the one. It’s a 20 minute time investment that is worthwhile. John Doerr, a principal at Kleiner Perkins was videotaped giving this talk at the TED Conference last year.

If you want to know why the principals of MeV are engaged in this space, watch the video, Doerr states the case clearly and with passion.

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