Back to Newsroom
Back to Newsroom

Are We Wasting Half of All Energy?

Thursday, 20 November 2014 11:50 AM

Topic:

WHITEFISH, MT / ACCESSWIRE / November 20, 2014 / The U.S. and most other countries around the world generate power from fossil fuels. By burning fossil fuels like coal, natural gas, or crude oil, power plants operators like DTE Energy Co. (NYSE: DTE) and CMS Energy Corporation (NYSE: CMS) heat water until it turns into steam, which then turns a turbine to generate electricity for both residential and business customers.

The problem with this approach is that only about 33% of the fossil fuel's energy is captured by spinning the turbine with the remaining 66% lost to heat that's simply vented out of most power plants – numbers that have been virtually unchanged for decades. In other words, these power plants are wasting more than half of the potential energy that they could be generating in the best-case scenario.

By using heat recovery technologies and moving the generation to where its used, Combined Heat and Power ("CHP") systems can boost the efficiency of these systems to 70 to 90% by producing both electrical energy and thermal energy. These dynamics translate to lower operating costs, reduced emissions of all pollutants, increased reliability, enhanced power quality, and reduced grid congestion and distribution losses.

A New Approach

Many countries have been trying to move power generation away from fossil fuels and toward renewable energies like solar and wind power. According to the Energy Information Administration ("EIA"), renewable energy sources account for about 11% of the world marketed energy consumption with a projection for about 15% by 2040, which suggests that fossil fuels are still here to stay.

Rather than focusing on renewable energy sources, which involve significant upfront investments and long payback periods, governments are beginning to look toward ways to make fossil fuels more efficient. CHP systems represent a big step in the right direction with the ability to dramatically increase energy efficiency from 33% to 70-90% without any major technology change by simply using the heat that's normally wasted.

In Denmark, nearly half of all buildings are kept warm using CHP systems piping heat from power stations to whole districts of towns and cities. The country has installed approximately 670 CHP plants over the past hundred years of development, with both public and private ownership. Interestingly, just under half of the electricity is produced from biomass and organic waste, too.

More Than Economics

Economics only accounts for part of the reasoning behind more efficient power generation. In Britain, the closure of several power stations is expected to result in a narrower surplus of electricity supply over demand, according to network operator National Grid plc (NYSE: NGG). Wholesale power prices responded by moving higher and could jump further if there's low wind or interconnector exports from Europe.

There are also fears that Russian supplies of natural gas to Europe via Ukraine could be disrupted due to hostilities between the countries. While Russia certainly relies on European buying to finance itself, these factors don't negate the risk of price hikes or supply disruptions from geopolitical disputes. These dynamics have led many countries in the region seeking greater energy independence.

In aggregate, these solutions could take decades to fully resolve with new power plants coming online and alternative energies gaining market share. Governments could curb some of the problems in the short-term by taking smaller steps to embrace alternative energy and CHP systems that require less large-scale implementation and focus on more grassroots growth.

Taking Smaller Steps

EuroSite Power Inc. (OTC: EUSP) is taking a radically different approach by serving as a leading On-Site Utility that provides CHP solutions to individual businesses. For instance, the company's small scale-CHP systems provide clean electricity, heat, hot water, and cooling solutions to hospitality, healthcare, housing, leisure centres, and a number of other vertical markets instead of power plants directly.

The company's value proposition is simple: By leveraging the increased efficiency of CHP systems, they provide energy at lower costs than charged by conventional energy suppliers without any capital or start-up costs to the energy user. The company's investors benefit from long-term contracts that generate predictable and recurring revenue over time that's tied to the price of conventional energy.

As of its fiscal third quarter, the company operates 19 CHP systems with a total contract value of $51.9 million and about 3.4 million kWh produced in Q3 2014 alone. In addition, the firm has a backlog of 13 systems with a total contract value of $38.6 million, including two 100kW systems with FJB Hotels. By bringing these solutions directly to consumers, change can be delivered more rapidly.

Click here to sign up for future email updates on EuroSite Power Inc. http://www.tdmfinancial.com/emailassets/eusp/eusp_landing.php

Legal Disclaimer:

Except for the historical information presented herein, matters discussed in this release contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Emerging Growth LLC is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. Emerging Growth LLC may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice. Emerging Growth LLC may be compensated for its services in the form of cash-based compensation or equity securities in the companies it writes about, or a combination of the two. For full disclosure please visit: http://secfilings.com/Disclaimer.aspx.


SOURCE:
Emerging Growth LLC

Topic:
Back to newsroom
Back to Newsroom
Share by: