Practical Experience Reveals That Energy is a Business' Third-Highest Cost.
John Hurst
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Practical Experience Reveals That Energy is a Business' Third-Highest Cost.
John Hurst
Practical Experience Reveals That Energy is a Business'
Third-Highest Cost.
John Hurst www.RenewableEnergyStocks.com January, 2006
With America's commercial business sector leading demand, the
cost of providing energy to the nation's business and
residential consumers is expected to easily exceed $200 billion
this winter.
Walter W. 'Chip' Schroeder, President of Distributed Energy
Systems Corp. (NASDAQ: DESC), which started out as a hydrogen
company, succeeded originally on the strength of the excitement
surrounding fuel cells five years ago. "The reality is that
nobody has succeeded with fuel cells," he said, "to anything
like the degree of performance and particularly cost that they
were aiming to achieve by now."
With fuel cells still not ready for prime time, Distributed
Energy adjusted its sights by adopting ready-for-market
technologies and acquiring a company that builds projects and
delivers power to end users looking to supplementing their grids
and getting more control over their electricity supplies. It
worked and Schroeder now says, "We're trying to do above ground
what a number of technologies have proven very successful below
ground.
"Things like directional drilling, seismic and measurement well
drilling have greatly improved the ability to turn marginal
resources into profitable production. Above-ground technologies
are letting us direct energy to its highest and best uses, more
effectively. All electricity is not demanded equally. Now,
control over the price, reliability and quality of the power is
achieved." The subsidiary, Northern Power Systems, designs and
installs systems in parallel with a grid at points where the
value of electricity is highest.
"People need energy for all sorts of different uses, and some
are much more valuable than others. Technology is helping to
achieve differentiated quality of service in a way that really
wasn't commercially feasible even five or 10 years ago. We are
building high efficiency (70% or better) systems that yield
three to four year payback and significantly improved
reliability." he said.
George Burnes, President of SmartCool Systems, Inc. (OTC.PK:
SSCFF; TSXV: SSC), explains the primary driver towards
commercial energy efficient technology as being the desire to
reduce operating costs. Energy, he added, is typically the third
largest operating expense for a business, ranking behind only
salary costs and rent.
"In addition to this as we move forward into the 21st century,"
Burnes stated, "pressure from governments and environmental
lobby groups as well as geo-political events is accelerating
global demand to reduce the dependence on fossil-fuelled
electricity generation. International treaties such as the
'Kyoto Accord' have resulted in many countries formally
committing to significantly reduce 'green house gas' emissions.
"Recent geo-political instability in major fossil fuel producing
regions has only served to increase public demand within North
America to reduce dependence on fossil-fuelled electricity
generation. This has resulted in cash and tax incentives being
offered by utilities and local governments in many states and
provinces to encourage industrial, commercial and institutional
users to reduce electricity consumption through the installation
of energy savings equipment."
Burnes said businesses are looking for the means to reduce
costs, increase profits and satisfy ever-increasing demands to
reduce greenhouse gas emissions and preserve the environment.
The Dow Chemical Company (NYSE: DOW) said it has established
relationships with a number of organizations on energy
efficiency. Dow is an active member of the American Chemistry
Council's Energy Team. Dow is also a member of the Consumer
Alliance for Affordable Natural Gas (CAANG), which advocates for
a renewed nationwide focus on energy efficiency and
conservation, as part of a comprehensive and balanced U.S.
energy policy. The Company is participating in an industrial
energy efficiency campaign initiated by the U.S. Department of
Energy and is also a major corporate sponsor of the Alliance to
Save Energy's "The Power is in Your Hands" consumer energy
conservation campaign, launched in December, 2005.
A Dow spokesman in Houston, TX, commented, "Dow is also
committed to helping consumers reduce their energy consumption
by producing products that help lower electric bills while
making a positive difference for the environment. Cars, homes
and buildings use significant amounts of energy. Dow offers many
energy efficient solutions including STYROFOAM™ insulation
products and GREAT STUFF™ Insulation Foam Sealants. All can help
reduce energy use for homeowners and businesses by 20-30
percent. We also help consumers spend less at the pump. Dow
Automotive offers a variety of plastics, composites and
adhesives that make vehicles stronger, yet lighter, improving
overall gas mileage.
"Dow is also an innovator in cogeneration - the simultaneous
production of electricity and steam, currently used to produce
75 percent of the electricity needed to manufacture Dow products
worldwide. Cogeneration typically uses 20 to 40 percent less
fuel than conventional power generation, while reducing
emissions of carbon dioxide and improving air quality."
Steven P. Eschbach, spokesman for FuelCell Energy, Inc.,
(NASDAQ: FCEL) said, "High efficiency means less fuel per
kilowatt hour of output and that essentially means lower
operating costs or being able to control your energy costs. If
you have on-site generation, that gives you more control over
your energy costs and if you're using direct fuel power plant at
45-47-percent electrical efficiency that is the best
distributed-energy technology in its size range. All the other
technologies are up to about 41-42 percent and, believe it or
not, a three, four or five-percentage points of efficiency means
a lot when it comes to controlling your energy costs."
Eschbach added that a powerful driver is the reduction of
greenhouse gases. "Again, getting the high efficiency back into
the equation, the more efficient you are, the less harmful
greenhouse gases you emit. Our technology not only provides
electricity, but also uses the thermal output for co-generation
applications, so our efficiencies can go continually higher -
45-47 percent for electrical efficiency can go up to 60-70 and
beyond in terms of total thermal energy efficiency. And that
goes a long way in terms of controlling your costs and reducing
greenhouse emissions."
He said energy efficiency clearly is becoming a paramount
concern with end users and if less fuel is used, that does a lot
in terms of energy security: "Not only do our power plants
operate on natural gas, a domestic resource, it also operates on
other methane fuels such as waste water treatment gas from an
industrial or municipal waste water treatment facility. There,
you are able to bypass oil use altogether and just use the
existing domestic sources that you have. For a wastewater
treatment plant, the economies are even greater because the fuel
that's generated from the wastewater treatment process is
actually the fuel that generates electricity to treat the water.
So clearly, you have an opportunity to clear away from foreign
sources of energy and stick with the domestic resources that are
here at home."
International Rectifier (NYSE: IRF) semiconductors enable the
exact delivery of electricity to allow the end product to work
efficiently, company spokesman Graham Robertson said.
"Power management technology can help the world save a
remarkable amount of energy. There are three areas where
advancements in power management that can help save about 30
percent of the world's projected energy demands. The first area
is the ubiquitous electric motor, consuming over half of the
world's electricity today and where electronic motion control
technology can be applied to tame it. Next, are automotive
systems that, with the aid of power management technology, can
cut fuel consumption by 50 percent. Lastly in lighting, power
management can help save half of the electricity by hastening
the move to energy-saving alternatives such as high-efficiency
fluorescents, digitally-dimmable ballasts, and LED technology,"
Robertson said.
He added, "We have seen a change in consumer and supplier
behavior as our products are nearing price neutral and
performance neutral and the cost of energy is increased.
Consumers are more aware of the energy-efficiency options they
have available. Suppliers are increasing their desire to have
energy-efficient products available in the marketplace."
John Hurst
John Hurst has focused on marketing and communications for
public and private companies in the United States and Canada.
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©Copyright InvestorIdeas 2005
About the author:
John Hurst has focused on marketing and communications for
public and private companies in the United States and Canada.
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