Opinions
Robert McWhirter
Alter Nrg Corp.
NRG-T
BUY
Aug 02, 2013
Stock price when the opinion was issued
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A “waste to energy” company. They take 1000 tons a day of municipal waste in the UK and convert it into electricity for 50,000 homes. Plant is expected to start coming on line in March. A US analyst suggests this project would have an 18% unlevered return on investments. Have announced construction of a 2nd $400 million plant next door. Also, just announced an area in a new market, an incinerator that will take ash from “nasty burning” stuff and turn it into a glass like slag that can be put into a regular garbage or into construction, etc. Can see this going to $1.30 and then potentially much higher from there.
Having a 2 day open house in northern England, at the world’s largest “waste to energy” facility. Going to turn 1000 tons of municipal garbage per day into gas to drive turbines for electricity for 50,000 homes. Signed a $250 million deal for a 650 ton per day location in the Barbados. GE (GE-N) is also interested because the singas (?) that is used by their process, can be used in the GE turbines, producing up to 25% more power. Thinks there is a good opportunity over the next 12 months.
Not in his database and not actively covered by analysts. Have some extremely interesting technology they acquired a number of years ago from Westinghouse. It typically involves extremely high temperature plasma torches. They have a project that they are working on as a supplier in the UK with a company called Sealed Air which has put up $4 million to take 100 tons of municipal garbage per day and put it through the NRG process. It doesn't burn the garbage, but gets it so hot that it breaks down into its basic carbon pieces. Sealed system, so there are no concerns about pollution. It does produce a Sin gas which has a high amount of hydrogen, which can be used to spin a gas turbine to produce electricity. Also, have projects in China. Good opportunity. Thinks 2015 will be the traction for them.
The technology uses extremely high temperature torches to burn stuff. The advantage is that you can convert waste into energy and create a syn gas that can be burned or use to convert into other forms of energy. A very long lead type of company. Currently have a UK customer that is spending $400 million to the technology to create enough electricity for about 50,000 homes and get rid of tons of garbage. Also, have existing projects in Japan that have been operating for well over a decade. Also, some new facilities in India. Thinks there are great opportunities between now and the calendar year end for additional contracts.