Ballard Power Systems has reducted its second-quarter loss to $11.1 million this year, from $17.3 million a year ago, and boosted revenue by 15 per cent.

The performance metrics are all in the right direction. Ballard is a company which I have admittedly been very sceptical about in the past (see my post from September 27th 2005) and here as well. The good news is that Ballard is starting to possibly look a bit like Amazon in the late 1990s; not profitable, too much hype, but just possibly, a great future (albeit in a much smaller niche).

The decision by Ballard's CEO. John Sheridan, to shift focus away from the automotive market and to focus on nearer-term markets, including fuel-cell powered forklifts and cogeneration projects looks shrewder by the day.

As I have remarked here before, the technology for electrically powered vehicles is already way ahead on cost and performance to fuel cells (see my post Electric vehicles may be closer than we think - from June 25th 2007). The trouble is that most of the big auto manufacturers are "overweight" financially and pr-invested in fuel cells. For them, to suggest a change of course at this stage would cause them huge embarassment . . .

I'm so impressed by the energy storage technology of Altairnano. What they need is for one of the big automakers to buy into their technology in a big way. In so doing though, an awful lot of egos are going to be bruised and more than a few fuel cell visionaries will be left high and dry.

Well bring it on; this is capitalism and it works.

Romag Holdings - a glass company that has rapidly expanded its solar business based on its Powerglaz technology
BioFuel Energy Corp - a bioethanol development stage company
Nova Biosource Fuels Inc. - a biodiesel company with over 230 million gallons of Biodiesel in various stages of construction or in operation.
Oxford Catalysts Groups - who make catalysts for fuel cells and biogas conversion

And more to come . . . I suggest you sign up to the AEI newsletter for news of forthcoming IPOs and company announcements.

My rules for admission to AEI list of stocks remain the same;

i) No pink sheets
ii) At least 25% of the company's sales must come from alternative energy technologies
iii) That alternative energy technology must be one of those categorised on the right hand side of this page
iv) Unlike most alternative energy aficianados, I totally reject energy efficiency as a category because of the rebound effect - click on the link if you don't know about it.

Received wisdom has it that when the price of oil goes high enough, the shift to alternative energy will be unstoppable. I now have my doubts about this. All higher oil prices really show in a very broad sense, is demand outstripping supply for energy. It does not necessarily show the demand for clean energy, especially as most of the scaleable off-the-shelf clean technologies are in the business of electricity, not transportation.

That's why I was very taken with a piece in the Financial Times a couple of days ago about the price of uranium. Unlike oil, I would suggest the price curve of uranium has shown more accurately the demand for clean energy (at least, not including the waste). And encouragingly, uranium price performance has easily outstripped that of oil.

Back in June 2003, uranium cost $10.90 a pound and in the last few weeks it has reached $136 a pound. A staggering ten-bagger commodity and I suspect, second to no other in the same time period. Presumably, there is a point when uranium becomes so expensive, the cost of the fuel is prohibitive to nuclear power. Unlike many people involved in alternative energy, I don't mind nuclear power, but this one scenario worth pondering. Just as we may surmise that oil which costs more than $200 per barrel will never come out of the ground.

With 74 nuclear reactors under construction and another 182 planned, it's hard not to see a lot of pent-up demand online for uranium. So if - and if it's a big if - the price of uranium makes some nuclear plants financially unviable, what then?

Arguably, for less wealthy countries like India thorium, which is at least 3 times more abundant than uranium and of course - the main reason I made this post - renewables. Renewables, because the fuel is free, wind, water, sun, tide, wave etc. offer greater price stability further into the future. And that zero fuel cost, although only a part of all the other costs, seems set to grow in importance as part of the alternative energy investors financial calculation.

A few years ago, I much enjoyed reading (although certainly didn't always agree with) Jeremy Rifkin's book, "The Hydrogen Economy". One part though that stuck in my mind was his reference to hydrogen from wind powered electrolysis. On page 189 of the paperback edition he said:

"When wind power drops to 1.5 cents per kilowatt hour in the next few years, electrically generated hydrogen, using wind power, will be competitive with gasoline."

5 years on, wind power prices - as measured by the installed cost per megawatt - have actually gone up. And even with one of the best sites and the lowest possible installation costs, the levelised cost per kilowatt hour over a 20 year period is still pretty much 5 cents per kilowatt hour, excluding all other externalities (additional transmission lines, grid-reinforcing, load-balancing, avian mortality rates, etc. . . . all of which rise with an increased wind penetration). From today's standpoint, 1.5 cents a kilowatt hour looks a very long way off.

But the concept is still alive.

That's why I was intrigued and very grateful to learn from an AEI reader based in New Zealand of a new company seeking to IPO on the Australian Stock Exchange next month (10th August), called Wind Hydrogen Ltd.

The company says it holds international patents over hydrogen-based technology that is complementary to wind power generation, able to overcome the issue of variable output from wind farms, considered a key long-term barrier to the commercialisation of wind power. They also believe their technology opens access to markets for hydrogen and hydrogen-based products. This last bit is important - they think they can sell off the surplus hydrogen to downsteam chemical companies who would otherwise take it from natural gas, releasing CO2, for the production of ammonia.

What I found particularly interesting though is that they have patents pending on wind monitoring and prediction. Combine accurate wind forecasting to an electricity spot market in short supply of power and very quickly you could get a profitable business model.

But hydrogen has to be most expensive form of energy storage so they are dependent - and I suspect taking a bet on - rising and unpredictable gas prices affecting the electricity and chemical industries. Meanwhile, Hydrogenics has just opened a wind-powered hydrogen fuelling station in Dakota.

Wind Hydrogen is definitely a company to watch. Still, the cynic in me thinks if this energy storage is so good, why not combine their storage technology with a fully amortised and rainfall-deprived hydro power plant?

This would be a lot cheaper - and more profitable, as well as renewable.

Presidential candidate U.S. Sen. Barack Obama will be the keynote speaker at the grand opening of VeraSun Energy ethanol plant in Charles City, Iowa, next month.

Talk about political connections !

Verasun, one of quite a few US-based bioethanol stocks that have not done so well since the great spring fallout of '06, could use a shot in the arm. It also helps that oil is touching new highs, making people think harder about the alternatives.

I took a decision to stay out of politics on AEI, from the word go. As far as I'm concerned, for investors, it's about the numbers and in a rational world, that is all that should matter. I'm also not American and it's improper for me to comment on American politics. But what I would like to share with you is an insight from a Republican activist I received on a recent trip to Washington DC. He told me that Obama passed what I call "the corridor test". Truth be told, far too many aspiring politicians will not give you the time of day, or a simple hello as they pass you in the corridor if they think you are not important to them. From their point of view, that's rational. The trouble is, people like to talk and it works against them. Everyone, without exception, hates being made to feel unimportant.

But Obama, according to my Republican friend, passed the corridor test with flying colours. The same though, he said, could not be said about Hillary Clinton, who habitually rubs people up the wrong way.

So the message of this is if you are a listed alternative energy company seeking political support, pick your politician wisely. And Verasun, evidently, has thought about this and done very well with Senator Obama.

I've been thinking some time about energy storage and how one should compare in a competitive manner the different technologies available. Here incidentally, is a very good page on the different technologies and their technological comparisons produced by the Electricity Storage Association.

Still, my blog-sized and financially biased interpretation of what are the 4 performance metrics of energy storage should be are as follows;

1. Watt hours per installed dollar - pretty fundamental, the upfront capital expenditure cost.

2. Lifetime discharge/recharge cycles - this varies hugely from perhaps 1000 for lithium ion based batteries, 10,000 for Vanadium Redox Batteries and 15,000 for some others.

3. Watt hours per kilo - this determines how portable it is. Lithium ion batteries about 200. Petrol or gasoline about 13,000. By the way, laptops are getting lighter, so why don't they just double the size of the battery?

4. Time required for full recharge - 6 hours for lithium ion to 10 minutes for nanosafe batteries.

So there we have it. I also have to say that if Altairnano's nanosafe technology is as good as they say it is, a revolution is in the offing.But only if metric # 1 comes in at a low enough cost.

I am most grateful to an Australian reader to alerting me to Carnegie Corp - a company which has a joint stake with Renewable Energy Holdings in the CETO wave technology. Carnegie also has some proprietary clean coal technology - a category incidentally I'm in 2 minds whether to include on AEI.

But the CETO could be the first wave technology deployed in scale anywhere in the world.

The experimental CETO seen here is waiting to be deployed as it would typically be hidden below the surface in an array exploiting the kinetic energy of the sea current. Just like windfarms, you'd want to locate these generators where the energy is greatest and looking at this map, you can see the appeal for Australia.

It clearly has political support in Australia - see this video clip here - with the Australian Federal Minister for Industry maybe overstating the case and calling it the Holy Grail. You may also want to check out the Ceto home website as this has a bit more information than either href="http://altenergyinvestor.advfn.com/carnegie.html">Carnegie Corp - or Renewable Energy Holdings do.I also recommend watching this video clip from the CETO site.

Australia can pretty much lay claim to the cheapest energy in the world - coal and it seems that scaled-up CETO farms of hundreds of megawatts are still a few years off. Carnegie though along with REH should be both be companies to watch for their exposure to this technology.

THE WINNERS

Dynetek Industries 12.93%
Quantum Fuel Systems Technologies Worldwide 12.50%
Beacon Power 11.64%
Western Wind Energy Corp 11.58%
Millennium Cell Inc. 10.65%

THE LOSERS

Roth + Rau -13.42%
Sag Solarstrom Ag -9.30%
Centrosolar Ag -8.02%
Biofuels Corp -7.99%
Daystar Technologies -6.21%

Here is a highly informative and readable article just published by Environmental Health Perspectives on the potential impact of flow batteries on wind energy. I'd have to say - from where we are now, that impact is just possibly massive. And I must admit, I also like the article because they have given me 3 quotes.

On the business case for this type of energy storage though, I have yet to come across an up-front capex figure on the cost of 1 megawatt hour capacity vanadium redox battery - as made by VRB Power Systems. This would make a transparent case for the investment - or not - in windfarms around the world.

As one might expect from an Environmental Health magazine, they were very keen about the low environmental footprint of the technology. These are the greenest of the batteries because they lack potentially toxic metals like " . . .lead, cadmium, zinc and nickel which can contaminate the the environment at all phases of the conventional battery life cycle".

I also keep thinking about nanosafe batteries, which can 80% recharge in 1 minute and achieve 15,000 charge/discharge cycles, which compares very favourably to 1,000 for lithium ion.

Energy storage really is making progress, something a couple of years ago I would have dismissed as fantasy. Now it is coming out of the lab and is deploying to the field, I think we may see some even more radical innovation unfold.