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Energy is going up in smoke
http://www.thestar.com/Business/article/447421
Jun 23, 2008 04:30 AM
Tyler Hamilton
Tim Angus says he can't help but smirk every time the price of a barrel of oil shoots up a few dollars.
"It's funny to work at a company where people are rubbing their palms when they ask, `Hey, did you hear what oil is at today?' "
It's not that Angus likes paying more to fill up his car, or likes seeing the economy suffer under the grip of inflation, caused by the rapid rise in fossil fuel prices. It's that Angus, president and chief executive officer of Ottawa-based Thermal Energy International Inc., is in the business of helping companies use their fuel more efficiently.
Fact is, for every $1,000 in fuel that's purchased for an industrial boiler, the typical plant lets more than $200 go out exhaust stacks. With oil at $135 a barrel (U.S.), letting 20 per cent to 30 per cent of your energy simply escape into the atmosphere begins to hurt the bottom line.
"It's just crazy," says Angus. "It's amazing how content we've been to throw away energy."
Tom Casten, founder and chairman of Recycled Energy Development of Westmont, Ill. – and one of the most outspoken critics of industry's wasteful ways – told environmental news site Grist last year that we have to prioritize our investments if we're serious about battling climate change.
"Dollars will always be scarce," said Casten. "What we need to do is get the maximum bang for the buck. A dollar spent on recycling energy produces about 70 times as much CO{-2} reduction as a dollar on solar, and about 15 times as much reduction as a dollar spent on a wind turbine." So while it's all well and good that we deploy solar and wind, often the less sexy solution is cheapest and most effective.
Thermal Energy has a product called Flu-Ace, which can extract up to 80 per cent of the heat that goes out a flue gas stack. That recovered heat is then redirected back into industrial processes. This could include pre-heating water before it enters a boiler to create steam, or supplementing heat in an industrial dryer, such as those used to dry biomass and distilled grains in ethanol plants.
It's not, in principle, much different than "grey water" heat recovery systems used in households. They basically capture the heat from hot water that goes down the drain and use that heat to pre-heat cold water before it enters your hot-water tank. The end effect is that you use less natural gas or electricity to get hot water in your home.
So far, Thermal Energy is targeting specific industries, including pulp and paper, food and beverage, petrochemical and biofuels. Another option is to use the heat to produce electricity, using special "recovered energy generators" from companies such as Ormat Technologies of Reno, Nev.
Angus figures medium and heavy industry in Ontario spends roughly $3 billion a year on fossil fuels that are used in boilers, steam plants and drying facilities. Of that, he says anywhere from $750 million to a $1 billion is lost as unrecovered waste heat.
Needless to say – and pardon the pun – business is starting to heat up for Thermal Energy. More companies are realizing that heat recovery systems come with a short payback, reduce fuel costs over the long term, improve competitiveness as a result, and will let them take advantage of future carbon-trading markets.
"The industry has reached an inflexion point," says Angus. "I would estimate we've seen maybe a (tripling) in demand for proposals over the past year from the Canadian marketplace, particularly in Ontario." And it's not for feel-good environmental reasons, although such benefits are surely welcome. "They're basically doing it for survival. It's do it, or just close the doors."
So why isn't heat recovery already a standard industrial practice? Angus says six or seven years ago, when we had $30 oil, talk of $100 barrels – let alone $200 – was considered lunacy. Companies didn't see the payback. Sure, there was energy waste, but with fossil fuels so cheap, it didn't really pay to put capital into efficiency improvements. Same goes for electricity: subsidized electricity in Ontario made it affordable to be wasteful.
Fast forward to today. We've seen a four-fold increase in the price of oil, and a three-fold increase in natural gas prices. "What that's done is put these projects in a financial position where there is less risk, more rapid payback, combined with the fact that larger investment funds have opened the door."
In other words, investors have become so attracted to the opportunity that companies such as Thermal Energy are able to get financially creative with their customers. If a big pulp and paper operator, for example, is skittish about spending $5 million for a heat-recovery installation, then Thermal Energy can more easily say: No problem, we'll install and own it, and you pay us back under a long-term contract through a portion of your energy savings.
This is effectively how the company's Thermal AUD program works. Last August, Thermal Energy signed a six-year, $3.75 million agreement with Fraser Papers Inc. to install Flu-Ace at its pulp and paper mill in Thurso, Que. Fraser basically pays Thermal Energy out of its energy savings. A major North American pulp and paper company signed a similar deal worth more than $20 million earlier this month.
"We have an excellent business model with anything over $50 a barrel (oil prices)," says Angus, who says about half his revenue pipeline is now coming through the Thermal AUD program. "Waste heat recovery is by far the greatest renewable energy opportunity available right now."
So even though energy inflation is putting the squeeze on Ontario industries, there are ways to cope, and become better off in the long run, without breaking the budget.
Tyler Hamilton can be reached at
thamilt@thestar.ca
Good entry point. The GEM deal should be closed and announced by next week. Anything else? I don't know.
g.p.
I assume the closeout of GEM and maybe something on Thermalon0x....Been a while :D
Looks good now :o)
Taking position!!
What could be the start of a new era for Thermal.
Shares up to .35 to .40 on this:
''Thermal Energy Enters into Agreement with North Eastern US Paper Mill to Deliver Green Energy Supply Deal Valued Over $20 Million
OTTAWA, Jun 3, 2008 (Canada NewsWire via COMTEX) -- (Canada NewsWire)
First phase of multi-mill initiative anticipated to offset the use of
fuel oil by more than 105,000 barrels annually.
Thermal Energy International Inc, (TSX-V:TMG) (www.thermalenergy.com) is pleased to announce it has entered into an agreement with a major North American integrated paper company for the development and delivery of a green energy supply program worth in excess of $20 million, using recovered waste heat at one of its facilities in the North Eastern United States.
This represents the first phase of a multi-site agreement involving the deployment of Thermal Energy's heat recovery technologies across five sites.
The initial project is expected to be delivered using the THERMAL AUD(TM) (Alternate Utility Delivery) financing mechanism, where Thermal Energy installs the technology and acts as the owner and operator of the system, receiving regular fixed payments over the life of the contract, with a purchase or renewal option at the end of the contract term. Thermal Energy will also be proposing an alternate up-front capital purchase option upon completion of the detailed engineering phase which is expected to be completed over the next 30 days.
This proposed project, Thermal's largest to date, would use multiple FLU-ACE(R) heat recovery systems to capture waste heat produced by the mill and incorporate it into operations to offset the use of fossil fuel. The mill would then purchase the recovered waste heat from Thermal Energy at a discount to current energy prices, resulting in over $40M in total fuel oil savings over the life of the eight-year contract term.
Initial estimates show the project would reduce fuel oil consumption by 105,000 barrels per year with commensurate annual emission reductions of 55,000 tons of CO2, and 625 tons of SO(2) - equivalent to permanently removing more than 13,000 automobiles from the road.
"As the cost of fuel oil continues to rise north of $100 per barrel, Thermal Energy's suite of solutions is even more compelling to industrial clients seeking to achieve operational cost savings and emission reductions," said Tim Angus, Thermal Energy President and CEO. "As a result, our typical solution size for our clients continues to grow, with this project being substantially larger than any in Thermal's history."
"We also continue to experience tremendous demand for our THERMAL AUD(TM) green energy supply program as it provides our clients the opportunity to achieve significant energy reductions and environment benefits without the requirement of any upfront capital expenditures," said Anthony Pugliese, Thermal Energy Vice President, Sales. "This program further supports our corporate client sales strategy focused on multi-site accounts whereby we can demonstrate our technologies and roll them out in a streamlined approach across a customer's entire portfolio."
An earlier Letter of Intent had been released for this same client related to the development of a DRY-REX(TM) feasibility study. This project has been temporarily postponed as a result of the significant magnitude of savings that can be realized via deployment of heat recovery solutions applicable across the client's portfolio of facilities. It is anticipated that this prior project will be revisited upon completion of the roll out of heat recovery projects. Thermal Energy has additional DRY-REX(TM) projects in development with clients in the North America, Europe and China. ...''
Worth a second look, eh?
g.p.
Not expecting any. Gee, just an update would help.
g.p.
Daym....
Gotta get news next week.....
I still have my doubts but you could be right.
Some good news soon? It's been a while; last Q deceiving.
g.p.
All the insiders buys and the institutional buyer, the bank credit..
Accumulation has been insane again. This puppy is ready to blast off once again.
TSX, baby.
Even with the poor showing and lack of concrete contracts, a friend of mine still likes the possibilities the Management discussion alludes to. Looks like the Market agrees a little as TMG is up a bit.
Good luck,
g.p.
Come on news :oD
At any rate, the range of trades would atleast presuppose rumors. Could be back to .30+ which would be a nice change.
g.p.
Something big is definately going on here!
A lot less than I used to have.
g.p.
You underestimate the thermalness of the energy!
Hope you have shares :o)
Well, T.S., Thermal stabilises again. A .25 ending would be good (surprising, without news.)
g.p.
Anything particular about Cantex? Any tie-in with Thermal?
(Nice 30% gain for CD,recently.)
g.p.
PS: As I expected, TMG went under .20,today.
Looks, instead, like we could slip under .20, today.
Prospect good, long,long term; unlikely in the short term.
JMHO...
g.p.
Let's get this party started~~~
To think it started at .27,then.31. .22 looks good IF something happens. I'm not so sure,at this time.
g.p.
Did you see that today? That was insane.
I think that Dry Rex contract is coming next week! Picked some up at .22!
Huge gains are not for this year. .25 reflects the disappointment many shareholders had following the AGM.
I'm sure lots of sales are for income tax purpose but not enough to explain the obvious: a long wait for the big contracts; no new contracts of importance.
Still a stock to watch. Price under .25 makes TMG fairly attractive.
g.p.
The quieter it is, the better :o)
T.S., less than one week to the AGM and still no hint of news except rumors of analysts that might start to follow TMG.
The stock is under .30. I don't think optimism for the future will be enough to move TMG. Only concrete dollar contracts will,imo.
So,what say you?
g.p.
I wouldn't have been able to afford it if I didn't sell any at 60 cents :o)
Trade stock :o)
"20 cents to 60 cents was nice :)" What does that mean, T.S.?
g.p.
20 cents to 60 cents was nice :)
I can't afford that many, good for you as TMG is low now.
The recent hints revolve around analysts for TMG.
Could that be THE meeting great news?
g.p.
Always has good news AGM time and the chart is gearing up again...Picked up 20k shares today!
Why do you say that?
Outside of the meeting (annual) in 2 weeks, there has not been much to enthuse...
g.p.
ADX pinch....Expecting nice pop very shortly.
Yesterday's low of .24 on a trade BMO-BMO of 29500 shares.
I'm starting to lose patience, here. Management seems smug in the knowledge that they're going places,eventually.
Meanwhile, we're in the dark, a month before the annual meeting. I am disappointed. Holding but reconsidering.
g.p.
Agreed :(
I was expecting news this week...
Unless it's really good news that is being withheld for soemthing else....
Who knows!
I'm still pretty confident though!
Meanwhile, the SP keeps on dropping. Nearing.30!
Even though I added a little, today, I'll keep a very close watch on this one.
Something at the back of my mind tells me perhaps not all is that well with TMG.
We need some good news soon.
Meeting date is Nov 29 (Ottawa). Let's hope, by then, we'll know a little more about what's going on!
g.p.
Great news, little news, nothing is moving this stock up.
Yet, with all in place, as it is, we should be doing much better.
A serious large contract and a great quarterly report will do it. Over $2M loss, last fiscal year, does not help. However, already $3M revenue (not profit) already slated for next fiscal year and either many small contracts (like the 3 GEM steam strap contracts) or better, will do it.
My bet is that it will take more than 3 months...
g.p.
Ottawa or not, here's a good newsthat could and, imo, likely will, lead to many contracts:
"Thermal Energy Signs Letter of Intent for DRY-REX(TM) Biomass Drying System with Eastern Canada Pulp and Paper Mill
9/18/2007
OTTAWA, Sep. 18, 2007 (Canada NewsWire via COMTEX News Network) --
Study commences to confirm economic and environmental benefits of low
temperature dryer for converting waste into high quality biofuel to
offset fossil fuel use
OTTAWA, Sept. 18 /CNW Telbec/ - Thermal Energy International Inc. (TSX-V: TMG) (www.thermalenergy.com) is pleased to announce it has signed a Letter of Intent with an Eastern Canada pulp and paper mill for the design and installation of a DRY-REX(TM) low temperature biomass drying system.
Thermal Energy will immediately commence a detailed feasibility which is expected to confirm the economic and environmental benefits of using the DRY-REX(TM) system to dry the mill's biomass waste stream including paper sludge for use as a biofuel. The study will be conducted in the current calendar year and upon acceptance by the mill, would lead to the implementation of a DRY-REX(TM) system under the Thermal-AUD(TM) (Alternate Utility Delivery) program through Thermal Energy's energy services subsidiary ForEverGreen Energy Inc.
"We look forward to providing the client with the results of our detailed study which we believe will show significant capacity to reduce fossil fuels, energy costs and landfill charges by converting the mill's waste stream into very efficient biofuel," said Thermal Energy President and CEO Tim Angus. "This in turn would provide substantial environmental benefits by reducing landfill, greenhouse gases and other emissions."
The Thermal-AUD(TM) offering through ForEverGreen provides customers with a way to generate immediate energy savings and positive cash flow from operations starting the first day of the agreement, all without any up-front or large capital investments.
"Thermal-AUD(TM) is generating tremendous interest within a number of industrial sectors and was the catalyst for the detailed study on this project," said Mr. Angus. "These industries recognize that through this program, Thermal Energy provides them with an opportunity to meet or exceed emission reduction targets by reducing their consumption of carbon based fuels, while preserving capital for other projects on an accelerated timetable unconstrained by capital budgeting."
..."
From what I gather, the study will prove what we already believe, that major savings will result.
g.p.
The Ottawa Business Journal is pushing this company hard, always has actually.
Here's the article from the Ottawa paper posted also on SH:
9/4/2007
Ottawa Business Journal
News Story
Not just hot air
By Krystle Chow, Ottawa Business Journal Staff
Wed, Sep 5, 2007 4:00 PM EST
Thermal Energy's Tim Angus. (Darren Brown, OBJ)
Thermal Energy's green power machines heating up interest in the industrial sector
It's no secret that many companies are looking for that magical machine which will help them save money and reduce greenhouse gas emissions, especially in this age of rising energy costs and environmental concerns.
Nonetheless, most firms are reluctant to make big investments on new technology for fear that their spending will be for naught when the machines don't perform to their expectations.
This is where local custom energy and emissions reductions solutions maker Thermal Energy International Inc. comes in: the company markets air pollution control technology and several innovative machines which recycle wasted energy and resources to give clients access to relatively clean power at a fraction of the cost of using other energy sources.
On top of that, the company recently launched an attractive alternative to buying its machines outright, a creative financing program which is piquing the interest of some major industrial players in its main markets of North America and China.
The company's Alternate Utility Delivery (AUD) program allows clients to buy only the energy produced by Thermal's machines, which are owned, operated and maintained by its subsidiary ForEverGreen. The customer gets to try the technology risk-free before it decides whether it wants to buy the machine, without having to make a large up-front investment, in exchange for the use of its waste materials which it would normally produce anyway.
The upside for Thermal is that it gets to fine-tune its own machines to guarantee maximum output for its client, helping to more easily secure a positive testimonial for its technology which it can then take to other customers.
"Our customers are always afraid of the unknown and they're not as familiar with our machines, and who's better suited to operate and manage them than us?" says Thermal's chief executive Tim Angus. "That was one of the reasons for developing our THERMAL-AUD program – we throw our faith behind the machine so they don't have to ... and we're extremely confident in the performance of our equipment."
The program's already attracted its first contract, a six-year deal with Fraser Papers Inc.'s pulp mill in Thurso, Que. Fraser Papers will try out Thermal's FLU-ACE system, which converts waste heat from the facility's boilers into usable energy and helps reduce the mill's total fossil fuel use by up to 10 per cent. This could lead to approximately $500,000-worth of energy savings annually, Thermal says.
There could also be an opportunity for a client such as Fraser Papers to combine FLU-ACE with Thermal's DRY-REX system, Mr. Angus adds. DRY-REX uses the low-temperature waste heat energy produced by FLU-ACE to dry the bark and pulp sludge which is usually just thrown out in the paper-making process. The dried product becomes excellent biomass fuel, which is normally too wet to be of good quality.
Add the opportunities for these two products to those of Thermal's greenhouse gas-reducing THERMALONOx product and the GEM steam trap technology it markets for its U.K.-based partner Gardner Energy Management, and things could get very busy for the company in the near future.
"The market is very accepting as there's not very much competition for these kinds of products," says industrial investment analyst Youssef Abboud of Clarus Securities. "Montreal's Sofame Technologies Inc. has a similar product (to Thermal's FLU-ACE), but industry experts I've talked to have said that Thermal's product is superior, and the leasing program is very creative."
He notes that the average contract for Thermal is worth between $2 million and $5 million.
Mr. Abboud says he can't provide exact figures on market opportunities for the company's technologies, but he estimates that the North American market could be worth more than hundreds of millions of dollars, while the Chinese market "should be huge."
The fact that energy efficiency technology is the cheapest way to power industrial processes makes Thermal's products even more interesting, especially with the rising costs of other sources of energy, says Roger Peters of the Pembina Institute.
"Over the last 20 years, there's been about a two-per-cent improvement in energy efficiencies, or energy used per unit of production, and heat recovery technologies are part of that energy efficiency category," he says. "The predictions are that it could be increased to four per cent per year with increased government initiatives."
Meanwhile, Thermal's THERMALONOx technology is poised to take over an even larger market, since its system for removing nitrogen oxides (a greenhouse gas) can be used to clean up the 300 coal-fired plants planned for Chinese industry over the next five years. Mr. Angus estimates this market to be "in excess of $50 billion," since China is adding new coal-powered factories at the rate of one per week.
He says THERMALONOx, which uses a chemical-based process to produce ozone to clean up nitrogen oxides, is 98 per cent effective and is much more environmentally friendly than its more well-known alternative.
The competing technology is selective catalytic reduction, which is the most commonplace solution in the world but only removes an average of about 60 per cent to 70 per cent of nitrogen oxides.
"That technology is problematic at best; it's very expensive to install and maintain, and at some point in its life cycle, it's an environmental hazard for disposal, since the catalyst used in the process becomes spent and needs to be changed," Mr. Angus explains. "There is a recognition in the scientific community that using ozone is one of the most promising areas for nitrogen oxides removal, although it's not an area with a lot of research and development."
Between the opportunities for its air pollution control and energy efficiencies technologies, Thermal's expecting a lot of good business for the next few decades, at least.
"There's over 200 years of coal in the ground in North America, and it's the most abundant fossil fuel energy source in the world and the cheapest, but people recognize coal is bad fuel, environmentally speaking. People need to find a clean way to use this abundant source," he says.
It's coming :o)
Not likely, T.S., people do not, as yet, understand the ForEverGreen concept. They're waiting for $$$ figures which cannot be supplied until the savings occur, etc...
...and TMG needs a few more good contracts to get investors really involved.
A question of time. Much more WHEN than IF...
g.p.
The company has completely re-strcutered itself, to enable it to take on many contracts at once. Our Chinese partners with the MOU are in Ottawa with Tim, working on setting up 2 pilot projects.
The way Tim was talking about ForEverGreen, it seems like that has been the solution for the slow sales. That will quicken the sales cycle.
Spinner actually made a really positive post about the restructuring and he said that is exactly what he wanted to hear and he bought 75000 shares.
ForEverGreen ahead!
There's been alot of buying...I'm expect a slow steady increase again with pops along the way with news.
IMHO, Load up.
Spinners post
All i can say for my part is that having Forevergreen financing the deals (via third party) Means that this will greatly shorten the sales cycle.
No need now to reinvent the wheel everytime they sit with a new prospects to try and convinced them to put up the bucks in order to save in the future, that becomes pre-arrange.
The ability of forevergreen to secure these needed financing will be the proof in the pudding, once they have the financials institurions convinced and willing to put forward the money then signing new deals will become a matter of paperwork.
So for those that may be wondering why i did a 360 in my opinion there you have it, they finally adressed my biggest beef of all and that is finding a way to shorten the sales cycle.
When people see forever getting millions in financing shares below a buck will be history or we get news down the road that they were not able to do so and in the teen's we go we no chance to escape as investor will all run for the door.
my bet is they will get the money and my bet was the addition of over 75,000 shares i am comfortable with"
Not quite getting what you're talking about, T S.
Unless some extraordinary news hits the streets, tomorrow, TMG will remain in the low .40's for the long weekend.
g.p.
Okay, I may have been a LITTLE wrong...But did you get to hear Tom on CFRA again? Things are looking very green on the other side!
Okay, I may have been a LITTLE wrong...But did you get to hear Tom on CFRA again? Things are looking very green on the other side!
I think we get Monday Wednesday and Friday this week :D
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