WHITEFISH, MT / June 2nd, 2014 / The NOW Corporation (OTC: NWPN) acquired the rights to an innovative wind power solution called exoPOWER in December 2013 that could revolutionize the alternative energy industry. After signing a joint venture agreement with a planned 10,000-acre Colorado hydroponic hemp and medical marijuana farming operation, the company hopes to develop a successful proof-of-concept that it can use to grow long-term revenue.
In a recent interview with CannabisFN.com, Senior Vice President Eunho Lee discusses the company’s technology, their plans to prove the efficacy of the exoPower wind turbine system, and how The NOW Corporation plans to integrate this technology within the burgeoning cannabis industry.
CannabisFN Executive Interview | The Now Corporation (NWPN) from TDM Financial on Vimeo.
In this article, we’ll take a look at the company’s potential market, how wind power has taken off, and why its technology is a compelling alternative.Growing Power Usage
Energy use on a per-capita basis in the U.S. declined 1.8% between 1997 and 2002, but food-related energy use per-capita increased by 16.4%, according to the U.S. Department of Agriculture ("USDA"). Farming operations use significant amounts of energy in their daily operations; everything from the gas needed to power tractors, electricity to run irrigation equipment, as well as the use of fossil fuel based fertilizers to help supplement nutrients in the soil.
The trend towards increased energy usage on farms is also on the rise. According to the USDA, farm labor inputs fell nearly 30% between 1996 and 2006, but durable farm equipment increased 10% over the same timeframe. This increased dependence on machinery, and the corresponding energy requirements to run them, has led many farmers to pursue alternative energy solutions to help offset their costs and improve their margins.
Specialty farms growing crops like cannabis may also require even greater energy usage, since the plants are required to be grown indoors using extensive lighting, heating/cool, and irrigation systems. In fact, a 2011 study found that total U.S. indoor cannabis cultivation (legal and illegal) costs the country about $6 billion per year in energy costs - enough to fuel two million average U.S. homes.Wind Energy’s Popularity
Wind energy has become a popular choice for many farmers looking to offset their energy costs and generate revenue. While the payback period ranges from 6 to 27 years depending on the size of the system, energy companies often foot the build out capital and operational costs. Farmers are able to benefit from this relationship by immediately realizing revenue in exchange for use of their land.
"I think it’s one of the greatest things that ever happened," said Chuck Goodman, a retired farmer in Iowa that installed three turbines that generate about $6,000 per year in revenue for MidAmerican Energy Co. (OTC: MDPWK) via a contract with Enron Wind Corp. "It’s good for my pocketbook. It’s good for the environment. And wind is replenishable; we’re not digging it out of a hole in the ground."
Despite the compelling economics and many benefits, the conventional three blade turbines have been the subject of its fair share of criticism among the general public. The turbines are prone to breaking down and are costly to repair; rapidly turning blades can injure wildlife; and, many neighbors living close to the turbines complain of noise. As a result, there is strong demand for an alternative solution that solves these problems.The NOW Corporation Changes the Game
The NOW Corporation (OTC: NWPN) acquired the distribution rights to an innovative, proprietary, patent-pending wind turbine technology in December of 2013 that could become an industry game-changer.
The company’s exoPOWER wind turbine differs from traditional wind turbines in that its multiple air foils (or sails) are positioned circumferentially on a ring, rotating on a track in a circular motion. The design of the exoPOWER allows the stress and torque of the rotating turbine to be shared equally by multiple bearings and supports along the outer ring and has eliminated the need for a central hub containing complex motors, transmission, braking system, etc. that are commonplace with the traditional wind turbines. The added benefit of the simplicity of the exoPOWER wind turbine system is that it reduces or eliminates the need for oils, greases, and coolants needed to keep moving parts lubricated and functioning. With a closed design, the turbine also requires less wind to generate power and can operate at extremely high wind loads.
In terms of end user benefits, exoPOWER’s few moving components translates to reduced maintenance costs and greater ease of transportation and construction. The closed design also protects wildlife, moderates noise, and reduces visual pollution by hiding the turbines from view. As with traditional wind turbines, farmers also benefit from the cheaper energy and potential revenue from selling excess power back to the grid.
Image of a site containing one stack of 4-3.0MW Image of conventional tri-blade Horizontal Axis exoPOWER wind turbine (total: 12.0 MW Wind Turbines (each turbine has capacity of 1.7 MW) capacity per site)
Proof of Concept
In March of 2014, The NOW Corporation entered into a joint venture to build a proof-of-concept of its wind power technology and operate a hydroponics facility on a 10,000-acre Colorado farm with plans to develop a hydroponic hemp and medical marijuana farming operation. The company will provide power for the planned commercial hydroponics facility, with expectations of not only taking the entire facility off-the-grid, but also to generate revenues by selling excess power back to the grid.
The owner and operator of the planned commercial hydroponics facility is in the process of securing a state license to cultivate, harvest, process, package, and distribute hemp for industrial applications, as well as a separate license to cultivate, harvest, process, package, and distribute cannabis for medicinal purposes. In exchange, the company will receive a 50% interest in the project.
By creating a fully operational exoPOWER system, the company hopes to begin selling their product to other commercial farming and cannabis growing operations. Many of these would-be customers have been hesitant to commit to a system that does not have a proven operational track record, even if laboratory testing and related simulations have proven very promising in the past.Do Your Homework
The NOW Corporation not only represents a compelling alternative to traditional wind power companies, like China Ming Yang Wind Power Group Ltd. (NYSE: MY) and General Electric (NYSE: GE), but is also a compelling story to investors of other alternative energy companies, like First Solar Inc. (NASDAQ: FSLR). Unlike many other development-stage companies, NWPN has a viable plan to prove its technology within its target commercial farming market.
If successful, the company’s shareholders would benefit from both the upside potential of the 50% joint venture itself and the easier sales process for its unique wind turbine technology. These two catalysts could unlock significant value for shareholders, with the stock’s current market capitalization standing at just $41.2 million, representing a fraction of its potential valuation if successful.
That said, there are many risks that investors should consider. The company trades on the OTC Markets and may be relatively illiquid compared to blue-chip companies, while it still has a Limited Information yield sign that management is trying to remove by updating its financial statements. There is also the risk that the company’s management will not be successful in implementing its technology.
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SOURCE: Emerging Growth LLC
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