Monday, June 22, 2009

Are Raser and Capstone thermodynamic busts?

I should be a financial planner. Over the past couple of weeks I blogged about Raser the Eraser and Capstone the Gallstone being thermodynamic busts. Well the folks on Wall Street must be reading the green machine. Raser traded today at a paltry $3.60 and Capstone is now trading at a measly eighty cents a share. These two companies are in a race to the bottom. Capstone has more financial resources than Raser so it will last a few quarters longer before its life is over or new equity has to be found to finance their ongoing losses. The companies will soon be ghosts.

Raser is now positioning itself as a big geothermal power plant developer. They have put the “100 mpg” Hummer on the back burner so to speak. Well Raser brings a contract with United Technologies as their entre into geothermal energy. UT may have some good technology but Raser will have to pay full price to buy this technology so unless Raser can raise cheap capital to finance their build own operate geothermal power plants they have no cost advantage over other more well funded project developers. Of course Raser has their hand out for Uncle Sam’s stimulus money and stranger thing have happened so they may pull this off but maybe the Feds can read a balance sheet and even the US might understand that Raser has negative net worth as well as negative working capital.

As for Gallstone they have yet to claim their microturbine can run on geothermal steam but they are asking investors to pony up more cash to keep going. They announced their quarterly results a few days ago. http://finance.yahoo.com/news/Capstone-Turbines-4Q-loss-apf-2100563017.html?x=0&.v=2 They lost over eleven million dollars this quarter. This means they spent two dollars for each dollar of sales revenue. Kind of like the State of California.

Enough about losers and losses, I have great news regarding the state of carbon emissions in the USA. We are emitting only 94% of the emissions we had in 2008 and about 92% of the emissions we had in 2007. All fossil fuel based electric generation has declined since last year. Oil usage has declined to 18.6 million barrels a day (this is more than 1.2 million barrels a day less than last year). I doubt that when the economy recovers we will ever go back to the absolute level of energy wastage we had in 2007. The US is no longer the largest polluter on the planet. China will hold this position now and well into the future. GM had good news to report today. Their Chinese joint venture has just sold their 2 millionth Buick. Maybe Raser should move to China now that a Chinese company will own Hummer. I wonder what the Mandarin word for an Eraser is? Perhaps the word is also a Chinese synonym for Ghost.

5 comments:

  1. I'm not sure of your actual reasons for loathing Capstone, but I do think that the stated reasons suggest an incomplete analysis.
    Examination of military experience with diesel engines shows that reasonably efficient, well built, modern diesel engines require 40 hours of maintenance per 1000 operating hours. Refer e.g. http://www.cre8tivenergy.com/tqg.htm Assuming the engine runs continuously and that maintenance costs only $50/ hour, this will cost about $ 17 500/year. The Capstone Turbine requires a filter change once a year and after 7 years, the replacement of some parts typically costing about $5000.
    This is why Europeans and Japanese who tend to consider operating costs in their budgets love them. Many Americans, who often seem to be mathematically challenged, and not infrequently fund projects on a shoe string and hope to create sufficient income in the future to carry the long term costs of inefficient methods, seem to miss this vital point. Which might be one reason why most American manufacturers are non-competitive and have to buy most of their goods from Asia, while Europe still manufactures most needed items locally despite having ostensibly higher personnel costs (there are other factors, not least Europe's medical and social support systems and lower corporate taxes).
    A minor issue is that a well designed efficient diesel (e.g. Isuzu) will cost over $5000 in a 30kW format, more importantly, unlike a Capstone Turbine, the heat energy released from a conventional diesel will be at a low temperature, making it very challenging to harvest that energy for bi- or tri-generation.
    If a building is large enough to use the thermal energy released, then at current relative costs of gas and electricity, it is not only greener and of course a far more reliable source of power, but also significantly cheaper to produce your own electricity on-site and use the "waste heat" to provide heating and cooling; rather than buying electricity and gas to accomplish the tasks separately.
    Finally, while the vehicles I have seen incorporating Capstone have been typical non-optimized prototypes, the one thing that is clear is that prime mover maintenance requirements of Capstone powered buses are a small fraction of conventional buses where engine maintenance is a major component of operating cost.

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