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Sunday, October 25, 2015 11:45:04 AM
Why, Cyclone profits in the satisfaction of knowing something Harry Schoell touched didn't turn into a complete loss, of course.
Q2Power's website used to brag about having licensed all of Cyclone's patents for Harry Schoell's "ingenious inventions" on every page.
Chris Nelson must have finally figured out that all of those patents were completely worthless. Not only has Cyclone not been able to make a working engine from them in 11 years and $23 million in accumulated operating losses, but the OSU designed Q2Power engine isn't protected by any of the Cyclone patents.
Q2Power's website shows photos of a prototype power unit in a shipping container at a local sewage plant, but no videos of it running or statistics on run time, such as hours between breakdowns.
It's also funny that there no longer seems to be any mention of Phoenix Power and their big plans for thousands of waste oil generating systems. Remember that million dollar purchase order Phoenix issued for WHE engines? That was supposed to have gone to Q2Power in the spin off.
The deal with Phoenix was that they would make a $150K progress payment when the WHE engine was able to run 200 continuous hours under load. No word on that achievement, which you think would be shouted from the rooftops given the long, long history of production predictions that never came true.
Q2Power's business model is about as "ingenius" as Cyclone's. They will put their generating systems at sewage plants across the country for free, maintain them and take a cut of the electricity sales revenue.
Let's pencil this out and see how it looks. Average U.S. industrial electrical rate in September was $0.073 per kWh. Their generator is 10 kW, but there are at least three good sized electric motors running pumps, plus four fans on their burners plus all the electrical controls, so let's say they are lucky and get 9 kW net output. The power is worth 9 x .073 = $0.66 per hour.
Now you've got to convince the sewage plant to put up with you so they need a cut, otherwise why bother with your equipment and service people? Let's say a quarter goes to the plant, so 3/4 goes to Q2Power. That makes it $0.493 revenue per hour.
There are 8760 hours in a year and let's say this technology that's never been demonstrated to run for a full day gets lucky and has 90% up time. That's 7884 hours per year x $0.493 gives $3885 per year gross revenue.
Q2Power owns and maintains the unit. They are on the hook for service people, travel, repairs and parts. Let's now suppose the things are perfectly reliable and only require one maintenance visit per year (and good luck with that!). They have to send out their service person, since no one else has the skills to work on their proprietary equipment. The service person will likely need to be an engineer due to the unique and complex equipment. Q2Power has to pay all the travel expenses for the person to go to the customer, wherever they are. So with overhauling the engine on each visit, replacing all the bearings, rings and other wearing parts, those big water filters, cleaning the four burners, etc., let's say they get away with only $1000 per year in maintenance costs.
That leaves $2885 in net revenue. Let's also ignore taxes.
Now for costs. Back in 2008 Harry Schoell predicted system cost at $4 per watt. Let's be generous and assume Harry wasn't just spouting uninformed nonsense. So the 10 kW WHE system is $40K. Add $10K to convert, wire and plumb a shipping container, then another $10K to install, wire and plumb it to a sewage plant. That's $60K.
Simple payback is $60,000/$2885/yr = 21 years.
And that's as long as no reality creeps in.
If the engine that's never been known to run 80 hours is unable to go 8000, there will be emergency repair calls paid for by Q2Power.
Given that the cost of the parts alone for their system is likely to be $40K, plus the fact they have assemble, wire and plumb it all, have to pay for the R&D and have to cover the overhead of their top-heavy corporate structure, the costs of the delivered system will be far greater than $40K.
No wonder Chris Nelson is in the paper begging politicians for tax dollars.
Q2Power's website used to brag about having licensed all of Cyclone's patents for Harry Schoell's "ingenious inventions" on every page.
Chris Nelson must have finally figured out that all of those patents were completely worthless. Not only has Cyclone not been able to make a working engine from them in 11 years and $23 million in accumulated operating losses, but the OSU designed Q2Power engine isn't protected by any of the Cyclone patents.
Q2Power's website shows photos of a prototype power unit in a shipping container at a local sewage plant, but no videos of it running or statistics on run time, such as hours between breakdowns.
It's also funny that there no longer seems to be any mention of Phoenix Power and their big plans for thousands of waste oil generating systems. Remember that million dollar purchase order Phoenix issued for WHE engines? That was supposed to have gone to Q2Power in the spin off.
The deal with Phoenix was that they would make a $150K progress payment when the WHE engine was able to run 200 continuous hours under load. No word on that achievement, which you think would be shouted from the rooftops given the long, long history of production predictions that never came true.
Q2Power's business model is about as "ingenius" as Cyclone's. They will put their generating systems at sewage plants across the country for free, maintain them and take a cut of the electricity sales revenue.
Let's pencil this out and see how it looks. Average U.S. industrial electrical rate in September was $0.073 per kWh. Their generator is 10 kW, but there are at least three good sized electric motors running pumps, plus four fans on their burners plus all the electrical controls, so let's say they are lucky and get 9 kW net output. The power is worth 9 x .073 = $0.66 per hour.
Now you've got to convince the sewage plant to put up with you so they need a cut, otherwise why bother with your equipment and service people? Let's say a quarter goes to the plant, so 3/4 goes to Q2Power. That makes it $0.493 revenue per hour.
There are 8760 hours in a year and let's say this technology that's never been demonstrated to run for a full day gets lucky and has 90% up time. That's 7884 hours per year x $0.493 gives $3885 per year gross revenue.
Q2Power owns and maintains the unit. They are on the hook for service people, travel, repairs and parts. Let's now suppose the things are perfectly reliable and only require one maintenance visit per year (and good luck with that!). They have to send out their service person, since no one else has the skills to work on their proprietary equipment. The service person will likely need to be an engineer due to the unique and complex equipment. Q2Power has to pay all the travel expenses for the person to go to the customer, wherever they are. So with overhauling the engine on each visit, replacing all the bearings, rings and other wearing parts, those big water filters, cleaning the four burners, etc., let's say they get away with only $1000 per year in maintenance costs.
That leaves $2885 in net revenue. Let's also ignore taxes.
Now for costs. Back in 2008 Harry Schoell predicted system cost at $4 per watt. Let's be generous and assume Harry wasn't just spouting uninformed nonsense. So the 10 kW WHE system is $40K. Add $10K to convert, wire and plumb a shipping container, then another $10K to install, wire and plumb it to a sewage plant. That's $60K.
Simple payback is $60,000/$2885/yr = 21 years.
And that's as long as no reality creeps in.
If the engine that's never been known to run 80 hours is unable to go 8000, there will be emergency repair calls paid for by Q2Power.
Given that the cost of the parts alone for their system is likely to be $40K, plus the fact they have assemble, wire and plumb it all, have to pay for the R&D and have to cover the overhead of their top-heavy corporate structure, the costs of the delivered system will be far greater than $40K.
No wonder Chris Nelson is in the paper begging politicians for tax dollars.
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