Silkwood, your thinking is correct.
I've been a long term holder of CNM but bailed out a year back at 5.1 cents and moved to Geothermal stocks, because the economics for CETO doesn't really stack up.
Most wind farms (I held Pacific Hydro when they were listed) were being installed is $1500/KWh, and Hot Rock Geothermal provides very similar capital costs but has a added advantage of Base Load.
As renewables have no fuel costs and traditionally little operating costs, the cost of power is mostly attributable to the capital costs. Wind costs about $70/MWh, Coal about $35-40/MWh, Gas $40/MWh+ and Hot Rock has been modeled to be about the $40/MWh mark. So with Hot Rock you get base load zero emission electricity at costs very close to Coal.
Don't get me wrong, I think the CETO technology is great, but the economics don't add up. It makes much better sense to build a desal plant and power it from Wind and later Hot Rock Geothermal than it does to use CETO.
Should CETO get over the line and a plant is built, the capital costs need to be considered. Who is going to pay for it? What is the funding arrangements?
Just because CNM has gone from a Market Cap of $4M to $175M doesn't mean it has any more cash to pay for such expensive plant. Maybe AIM:REH, CETO's (Seapower Pacific's) 100% owners have some money? Why has CNM gone up 1000's of percent, yet REH hasn't? In fact, what happened to fundamentals?
CNM
carnegie corporation limited
