commercial focus

Of late there has been a questioning of SP potential and the need for management to focus not only the technical side but also ROI.

From the ignition announcement we got a snippet as to management's potential strategy shift in this space, with the idea floated that a small generator be procured and set up to produce the first electricity from a UCG plant in Oz (noting CNX are close also):

"The company is investigating the economics of utilizing small scale plant to take gas from the project in this pre production phase to generate power to run the site. In addition an assessment is being made of the economic returns of various power production scenarios for the 200MW stage 1, with the advantage of generating cash flows earlier than previously planned."

Reading the Australian article recently posted by Solarfeen and Kyliethompson (thanks!), Brad Glynne indicates this is still front of mind, with this:

"What we are looking at is ironing out all the bugs in the system, then actually putting a small generator on the Kingaroy site that will produce enough energy to power that site and maybe sell whatever's left over into the grid."

The economics of such a move would be challenging at best, and extremely likely to be cash flow negative, but the benefits in proving the technology, if only at a small scale, are immense. This technology as with many others requires the winning of hearts and minds across a broad and diverse spectrum of stakeholders, from hard nose investors and financiers to government and local communities. Realistically government and local communities will only be satisfied when all environmental risks are proven mitigated by testing, but it would certainly grab the attention of investors and financiers, together with a polite reminder to the QLD government of UCG potential.

What better way to achieve positive PR for this fledging Australian industry than to generate electricity in the coming months.