however saturdays write up in the Australian was a positive one for us
Energy firm on favourable wave -
MICRO-CAP stocks are lowly valued for a reason, but we can't help thinking this one is on the crest of a special wave. http://www.the australian.com.au/business/wealth/energy-firm-on-favourable-wave/story-e6frgac6-1226593544409
- The Australian Saturday 9 March 2013
At least you would think so, judging by Carnegie's ability to attract Barack Obama's most senior military adviser for a look-see.
Carnegie last week won a $1.27 million federal grant to add a desal component to a proposed power plant at the Garden Island naval base near Perth, using its fully owned CETO technology.
Unlike other wave-power methods, CETO is based on out-of-sight buoys which are tethered to the sea floor and move in harmony with the waves, creating pressurised water and power.
The project has already attracted $9.9m of Canberra grants, with the WA government chipping in $7.76m.
Carnegie estimates the global wave-power market could be worth $100 billion by 2025, but there's more than just economic motives with this one.
...Garden Island, Australia's biggest naval base, must diversify its power source in case an enemy (say, Rottnest Islanders with killer quokkas) attack.
Where CETO comes into its own is as an alternative source for island nations, which rely on hugely expensive diesel power for both power and desal. At Reunion Island, Carnegie and French energy giant EDF have entered into a financial arrangement, by which EDF uses the CETO technology under licence to build a two megawatt power plant.
On Bermuda -- which also suffers with the world's most expensive power and water -- Carnegie has a less advanced tie-up with Triton Renewable Energy.
Chief executive Mike Ottaviano attributes the share weakness partly to the cash-strapped AIM-listed Renewable Energy Holdings selling down its 20 per cent stake last year. Half of these shares were picked up by a consortium including infrastructure guru and ex-footy player Mike Fitzpatrick.
REH agreed to put the other half into escrow and since then REH has come under control of Utilico, which has power interests in Bermuda.
The alternative power sector is deeply out of favour but Carnegie has some 7000 "passionate" individual holders.
While cognisant of the alternative energy sector's poor listed record, we'll call Carnegie a spec buy. By way of comparison, in January France's DCNS paid $150m for 60 per cent of Irish tidal play OpenHydro, which is in pre-revenue stage and is a similar size to Carnegie
CWE Price at posting:
3.7¢ Sentiment: LT Buy Disclosure: Held
