Geothermal Energy - Green Chip Review

Obama Geothermal Development

It may not be as shiny as solar or as obvious as wind, but no matter how you slice it - geothermal energy is a powerhouse when it comes to renewable energy generation.

As we highlighted in our book, Investing in Renewable Energy: Making Money on Green Chip Stocks...geothermal actually holds significant advantages over other forms of renewable and fossil fuel-based energy.

It's one of the cheapest forms of energy
It produces almost 50 times less CO2, nitric oxide, and sulfur emissions than conventional fossil fuel power plants
It requires no power storage
It's perfect for baseload power (power that's generated all the time). Geothermal power plants run at 89 to 97 percent uptime, compared to 75 to 90 percent uptime offered from coal and nuclear
The supply of geothermal energy is virtually inexhaustible.

And as my colleague Nick Hodge pointed out in April, geothermal energy capacity is actually expected to grow 89% between now and 2015 - from 11,007 megawatts at the end of 2008 to over 20,800 megawatts in the next 6 years.

That works out to a compounded annual growth rate of 9.5%.

Take a look...

Obama Loves Geothermal

To add more fuel to this geothermal fire, it has become quite obvious that the Obama administration is aggressively pursuing increased geothermal development.

For starters, the recent stimulus set aside $400 million for geothermal. Congress also coughed up $45 million for the DOE's geothermal program, and in March, the DOE announced $84 million worth of funding for enhanced geothermal systems.

And just last week, the President announced another $350 million in Recovery Act funding for geothermal projects!

Here's the breakdown on that one...

$140 million for geothermal demonstration projects
$80 million for enhanced geothermal systems technology research and development
$100 million for innovative exploration techniques
$30 million for a national geothermal data system, resource assessment, and classification system.

According to Karl Gawell, executive director of the Geothermal Energy Association, this is more funding now than in the past 20 years.

One company that's certainly going to benefit from all of this is Ormat Technologies (NYSE:ORA).

Now we've been preaching this stock for years. In fact, we first recommended Ormat in January, 2005, when it was trading around $16 a share. And we've been following it ever since.

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Our most recent assessment came in our March 3, 2009 letter. Take a look...

"Ormat Technologies is one of the biggest geothermal players in the market. Vertically-integrated, the company designs, owns and operates a number of geothermal power plants and recovered energy systems across the globe.

Ormat recently announced revenues increased 35.2% in Q4 and 16.5% for fiscal 2008. Net income also increased 31.3% for the quarter and 82% for the year. The stock currently trades around $23 a share. Our 12-month price target is $41."

Today, Ormat trades around $41 a share.

Here's how the stock has performed since the start of the year...

And Ormat isn't the only geothermal stock paying off for Green Chip investors either.

A few weeks ago I told you about a little $0.85 geothermal stock that was significantly undervalued.

That stock is now trading at over $1.70 a share!

Take a look...

But we're expecting much more. And here's why...

Turns out, the DOE is now expected to pony up $84 million for this company to build its next power plant. Certainly that has helped push the stock up, but there's another piece of news that's right around the corner - and it'll push this thing up even higher.

You see, now that the company can build its next power plant - on the DOE's dime - the only major hurdle for the company is securing a power purchase agreement.

Now if you know anything about the energy business, you know that a long-term power purchase agreement is what seals the deal for investors. It's the final piece of the puzzle that guarantees decades-long revenue streams.

And it's what every trend-chaser on Wall Street waits for.

Just look what happened the last time this company announced a power purchase agreement, back in 2007...

Now here's the important part...

What a lot of folks don't know is that this company is in advanced negotiations for a long-term power purchase agreement - right now.

Once that agreement is signed, and the press release goes out - the stock is going to explode. Just like it did the last time.

If you'd like to read more about this stock, click here now.

To a new way of life, my friend...and a new generation of wealth,

Jeff

http://www.angelnexus.com/o/web/12713

Hydropower Energy Production

Q: Which country is #2 in geothermal production, trailing only the U.S.?

A: The Philippines. And in another few years, the power-packed archipelago could overtake Uncle Sam.

The Philippines is drawing $10 billion over the next 10 years into its burgeoning renewable energy infrastructure... and that money will go toward more than just boosting an already impressive geothermal industry.

Run-of-river hydropower companies will play an integral role in the island chain's move to double its clean energy capacity.

With 1,081 potential hydroelectricity generation sites spread throughout the country's 7000+ islands, it's easy to see why the Philippines is part of a growing list of nations embracing run-of-river. "Mini-hydro," as some call it there, uses generation sizes between 101KW and 10MW to expand efficient electricity access with minimal transmission distances.

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Moreover, local hydropower operators have the luxury of tapping into an established renewable energy infrastructure.

The Philippines: Rich in Renewables

The Philippines now gets 23% of its electricity from a combination of hydroelectricity, solar, wind, biomass, and above all, geothermal — up from 21% in 2005.

Rich underground energy resources have made it easier for the Philippines to move away from its two-pronged colonial past (first Spain called the islands its own, then the U.S. took over until 1946) and into relative energy independence.

To take autonomy a step further, President Gloria Arroyo launched a new Philippine Energy Plan in 2005 to propel the country to 60% self-sufficiency by 2010.

The Philippine government is dialing back on coal imports and ramping up oil and gas exploration. But like other countries with near-term plans to maximize existing petroleum resources, the shot-callers in Manila know renewable energy is the real long-lasting way to satisfy growing energy demand.

With Arroyo's 2010 clean energy target fast approaching, it's more and more evident that the government's additional goal of doubling capacity will take more than geothermal alone.

And they've added a new goal, too. Energy Secretary Angelo Reyes says the national objective is "to double the power being generated from renewable sources, from 4,500 MW to 9,000 MW in 10 years."

Over the same 10 years, homegrown and foreign firms will combine in joint venture investments — outsiders are limited to 40% stakes in any given RE project — that could exceed the $10 billion mark.

To stimulate that spending, the Manila-based Philippine government is offering attractive tax advantages:

7 years without income tax

Duty-free equipment imports

0% VAT (value-added tax) on electricity sales

If the resource potential alone weren't enough, the tax sweeteners have drawn more than a dozen letters of interest from local and international power companies.

An invitation to to develop known resources, tax-free, in a country where consumption is expected to grow at an average of 6% annually? You bet they're interested.

Our interest is piqued, too. Even with its thousands of islands, the Philippines makes up one big piece of the global clean energy puzzle. As for hydropower, the country joins Canada, India, China, and others where run-of-river is transitioning from feasability studies into practical implementation.

Next week, I'll have a full report for you on more of the countries and listed companies ready to dive into run-of-river hydropower.

Until then,

Sam Hopkins
Green Chip International

Indonesia's Geothermal Energy Bonanza

It's a geological bonanza for clean energy investors, yet no one's talking about it.

With its population spread out over more than 17,000 islands, many Indonesians live in cities, yet some are in areas so remote that electricity access is almost zero.

Indonesia is also the only OPEC member in Southeast Asia, but in recent years it's actually become a net importer of oil. (Production is down from aging oil fields, consumption is up, and the government in Jakarta feels the fire of an energy crisis bubbling beneath the surface.)

But trouble isn't the only thing simmering under this archipelago nation. That's because geothermal energy is about to break out from an underexploited state to become a primary resource for Indonesia's energy needs.

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Geothermal Energy in Indonesia

Indonesia's largest listed oil and gas company, PT Medco, is about to break ground on a 330 MW geothermal plant in Northern Sumatra. That project will cost about $800 million to be split with Ormat Technologies (NYSE:ORA) and Japan's Itochu. For Ormat, geothermal is a normal day's work. For Medco, this marks a major reality check for its regional energy ambitions.

I first found out about PT Medco because of its exploration projects in faraway Libya. Medco is all over the Indian Ocean and the oil-producing world, inking deals from the main Indonesian island of Sumatra all the way to North Africa.

As Indonesia is the world's largest Islamic nation by population, and a country with a long history of controlling important trade routes, it only seems natural that Medco has acted as a petroleum-oriented arm of its outgoing home state.

Nevertheless, as Medco generally looks to the Arab Gulf and North African oil producers for its fossil fuel linkups, it may have overlooked a bigger opportunity — that the Pacific Rim region may be a more important group of nations in which Indonesia could play a part.

Now, Medco may be selling its stake in Libya and switching focus to the Indonesian domestic market, even if that means moving away from petroleum.

The Pacific Rim is about to become a major clean energy success story, just as much as the Persian Gulf's oil traps were for the fossil fuel industry.

Medco is currently engaged in a pricing dispute over the N. Sumatra geothermal project, and the dominant Indonesian utility, Persero, is trying to quash it.

With 27,000 MW in potential geothermal resources, PT PLN (Persero) and the government shouldn't have to nudge Medco into a deal — it's a lifeline to future viability for the aging oil and gas firm.

More than anything, though, geothermal energy can combine with greater energy efficiency to bring Indonesia into better balance with its own growth and global energy pricing.

And yet again, our international geothermal standby Ormat is in the best position as a pure play to pounce on Indonesia's tectonic shift away from oil and towards geothermal power.

Regards,

Sam Hopkins

P.S. - Based in Nevada and run by Israeli executives, Ormat is just the kind of globally-minded company we look for in Green Chip International. But the thing is, there are loads of similar opportunities off the NYSE where Ormat trades, and it's easier than ever to access foreign listings of international clean energy stocks. Along with ETFs and Wall Street trades, GCI subscribers can choose from a world's worth of highly liquid growth plays on geothermal, smart ethanol, wind, and other winning clean energy sources. Check out Green Chip International today to learn more: http://www.angelnexus.com/o/web/12431

Geothermal Energy Companies

The geothermal sector has been quietly steaming for some time now.

Often overlooked when it comes to cleantech fanfare—I've even called it the bastard child of renewable energy—it's only a matter of time until the industry gains rock star status.

Unlike wind and solar, geothermal is one of the few clean sources of energy that can provide baseload power without storage devices. And while it may not have the same sex appeal, the use of geothermal energy will quietly double in the next six years.

That's great news for investors.

Even better, the geothermal space isn't crowded with public companies, so the profits generated will be much more concentrated.

The smart money is already beginning to take notice, so you'll want to start sniffing around, too.

Here's what you need to know about investing in geothermal energy companies.

Geothermal Energy Companies: Tortoise and Hare

When it comes to geothermal investments, they can either be sure and steady or fast-moving and erratic — sometimes the same stock can be both.

You see, geothermal energy in its current form has been around for some time. The first plants came online back in the 1970s.

Since then, the sector has been largely dominated by large global conglomerates like GE, Siemens, and Mitsubishi. The only pure play has been Israeli-born Ormat Technologies (NYSE: ORA).

That company has been and will be the benchmark of the industry. Any Green Chip investor worth his salt should own shares of this company. Here's why:

This is the geothermal tortoise.

Of the 24 geothermal plants commissioned since 2004, Ormat has provided the turbines for 12 of them. Expect that trend to continue.

If geothermal turbine production companies are the tortoises, then geothermal energy production companies are the hares.

This is because many of them are smaller companies, reliant upon signing power purchase agreements (PPAs) for revenue. Getting to that point is an expensive journey, comprised of drilling test wells, acquiring permits, and securing transmission.

The successful completion of each of those steps is a major milestone for any small geothermal company, and can send stock prices soaring.

Such was the case recently when Nevada Geothermal (OTCBB: NGLPF) announced drilling results for their Faulkner 1 geothermal project at Blue Mountain, Nevada.

According to the results, announced in late March, "The latest three production wells based on initial testing, have similar production capacities (7.0-7.5 MW) to the original three wells."

Look at the stock's hare-like performance since that time:

Here's what else was announced in the press release:

Control, administration and maintenance building nearing completion;
Vaporizers, diffusers, and condensers installed;
Three generators delivered and installed on foundations;
Cooling tower frame erection commenced;
Ormat to deliver first set of power turbines by the end of March;
Switchyard structure advanced to construction;
'Faulkner 1' substation construction commenced;
Wilson Utility commenced construction of the 21-mile power transmission line (T-line) that connects the 'Faulkner 1' T-line to the NV Energy switching station at Mill City with completion expected at the end of May 2009.

Notice's who's supplying the turbines.

What's more, the company has signed a 20-year PPA with NV Energy for 49.5 MW. So, everything is in place for power to start flowing later this year.

When that happens, the 60% run of the past month will look tiny by comparison.

This is just one of many opportunities that will emerge in the sector as the use of geothermal energy is significantly ramped up.

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Geothermal Energy Forecast

That's because geothermal energy capacity will grow 89% between now and 2015, from 11,007 MW at the end of 2008 to over 20,800 MW in the next six years. That works out to a compounded annual growth rate of 9.5%.

Take a look at the visual:

Here in the States, forecast growth is on par with global growth on a percentage basis. In the next six years, geothermal energy capacity in the U.S. will grow 89%, from 3,112 MW to 5,884 MW. That's a world-leading sum.

Other countries, like Germany, Australia, and Indonesia have less total capacities but will grow much more quickly.

To be sure, the recent stimulus allocated $400 million for geothermal energy development. And that's on top of the recently-inflated $45 million Congress has set aside for the DoE's geothermal program.

That bill also extends the geothermal production tax credit (PTC) until 2013, allowing project developers to recoup 30% of a new plant's cost. It creates a cash grant program to support the industry as well.

Even Google is excited about the prospects, pumping over $10 million into geothermal start-up AltaRock last year. Legendary venture capital firm Kleiner, Perkins, Caufield & Byers placed a bet on the company as well.

As I said, the smart money is already beginning to take notice of the huge potential geothermal offers. Your money shouldn't be far behind.

Like other sectors, geothermal stocks have lost significant value over the past year. But the future growth scenario remains in place, as evidenced by the chart above.

Getting in now, while prices are still low, will ensure robust returns as the industry expands and new plants come online.

Call it like you see it,

Nick

P.S. I'll be at the Renewable Energy Finance Forum - Wall Street getting the inside scoop about the U.S. stimulus and its affect on all aspects of cleantech. This is the premier event if you're interested in ivesting in renewable energy. Click here to learn more or folllow the banner below.

Geothermal Energy in Africa

Africa doesn't need any more problems.

Cholera is spreading to epidemic proportions in Zimbabwe, Congo is aflame with civil war and UN officials say genocide in Darfur continues.

But there is a potential bright spot now developing, and it's 100% African...

The UN Environment Program (UNEP) is optimistic about geothermal energy in Africa, and so is Green Chip Stocks long-time holding Ormat Technologies (NYSE:ORA).

It's a question of exportability. Africa's natural endowment of oil, diamonds, gold and obscure minerals such as cassiterite have been more curse than blessing, largely because most of those resources are not consumed in Africa. Instead, they're shipped off to former colonial powers or emerging markets like China, where prices are set and margin pressure is set in motion.

So Africa's best bet for internal development is an energy type that can't be shipped overseas, and will benefit local residents first.

"Geothermal is 100% Indigenous"

"Geothermal is 100 percent indigenous, environmentally-friendly and a technology that has been underutilized for too long," UNEP head Achim Steiner said on December 9.

In East Africa, Steiner says the steam power generated from drilling deep into the Great Rift Valley can jump-start local economic activity. From a hub in Kenya, current pilot projects will be expanded internationally.

Right now, Kenya only gets 1,000 MW out of 4,000 MW potential geothermal capacity, with most of the country's power coming from hydroelectric dams. In 2009, Kenya's domestic geothermal production is set to ramp up and spread into Djibouti, Eritrea, Ethiopia, Uganda and Tanzania.

New testing and drilling methods are already being introduced to Kenya under a million-dollar UN-funded project, and $17 million more has been alloted by the World Bank to expand into the other five countries.

Geothermal is "part of Africa's future," Steiner reiterated. We hope so, but there are some geopolitical sticking points to keep in mind.

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Problems for Africa's Geothermal Energy?

Indeed, around the world the number of countries making use of energy from deep within the earth is expected to double from 20 to about 50 in the decade from 2000 to 2010. From 2004 to 2030, the UN Climate Panel says the geothermal piece of the world's energy production pie could more than quadruple.

But I can't gloss over the challenges of making Africa an underground energy hotbed.

First, the Great Rift Valley is as socially tumultuous as it is tectonically. Within the past year, the New York Times ran the headline "Ethnic Violence in Rift Valley is Tearing Kenya Apart." Members of the Kikuyu and Luo groups fiercely battled each other in the wake of a contested presidential election in January 2008, shaking political trust and doing damage to the country's image as one of Africa's most stable states.

If Kenya does establish itself as a pivotal energy provider for East Africa, will geothermal energy sites become strategic military objectives should violence flare up again? What about the sabotage and extortion that afflicts energy facilities from Nigeria all the way across to Somalia?

The list of countries that will get more geothermal exploration in 2009 notably excludes Sudan, an oil power whose name is mud in much of the international community, and Somalia, a failed state where foreign countries may soon have authority to pursue maritime pirates onto sovereign Somali territory without permission.

There's also the matter of water. Though Lake Victoria, the source of the Nile, is right on Kenya's western border, the north of the country is arid and droughts threaten millions of Kenyans every few years.

Kenya should have ample water to pump into geothermal wells from Lake Victoria and other waterways already used for hydroelectric dams. However, we have seen increasing scrutiny on water use across the renewable energy spectrum over the past year or two (high water intensity was a big nail in the coffin for corn-based ethanol, for example).

Leave it to Business

The UN has the global view necessary to put things in context and create political will. As for business, though, we'd rather see companies like Ormat take Kenya and the region to full geothermal capacity.

Good thing, then, that Ormat just announced the completion of a second phase in its pilot Kenyan geothermal plant.

According to the company's early December statement, Ormat's Olkaria plant will save 120,000 tons of imported oil and reduce average cost of electricity across Kenya. With 48 MW of base load capacity, though, Olkaria is only a drop in the bucket compared to what Kenya could produce.

Ormat's investment in that one project to date is over $150 million! Compare that to the UN's goal of $18 million, and you see why private enterprise will play the biggest role of all in developing Africa's geothermal energy.

We're keeping an eye on Ormat and other international geothermal projects. Check out Green Chip International today and gain access to full reports and updates as well as upcoming new recommendations.

Regards,

Sam Hopkins

Geothermal Energy in Australia

The Aussies have a head, and a continent, full of steam.

This week, geothermal energy enthusiasts in the Australian government are throwing out some astounding projections of how much potential underground steam-based power the continent-country possesses.

Enter Google, the world's # 1 search engine... and why founders Sergey Brin and Larry Page should head down under.

Anthony Budd, an official at national agency Geoscience Australia, told Reuters on Wednesday that "One percent of [Australia's] reserves would produce 26,000 years of energy supplies."

You read that right. 1%=26,000 years.

That's a massive number that puts into digits what Australia's leaders are already putting into words and policy action.

Australia's Geothermal Energy Push

Australia Resource Minister Martin Ferguson vigorously stands behind geothermal as bearing "huge potential... both as a solution to climate change and in terms of national energy security." And Prime Minister Kevin Rudd made his first move as head of state to sign his country onto the Kyoto Protocol to mitigate global warming.

Up here in the Northern Hemisphere, Google.org, the charitable wing of the search engine company that has already changed the way the world works, annonced this week that it is pursuing "hot rock" geothermal energy research with a planned investment of $11 million.

Of course, it's not just about philanthropy for Google and its non-profit arm. While the company's motto is "Don't be evil," Google's data centers host ever-proliferating racks of servers that whir at dizzying speeds, 24/7/365, and make the company one of the top energy consumers in the world.

Geothermal could help Google buffer a lot of that energy impact.

In Google's neck of the woods in western U.S., geothermal resources already provide some 3,000 megawatts of power to residences and businesses.

Yet underground energy is woefully underutilized... And that's something Google hopes to change.

Scientific American quotes geothermal drilling entrepreneur Lou Capuano as saying that out of "roughly 1,900 drilling rigs in the U.S., seven, maybe up to 11 now, are geothermal."

Now consider that by using 5,722 existing holes across Australia's vast landscape, Geoscience Australia's Anthony Budd and his colleagues have appraised the national natural resource that could and should take the country away from dependency on coal-fired electricity.

Those holes were all there because of previous mineral and fossil fuel exploration, and that's the Transitional Energy Economy we at Green Chip International have seen develop around the world. Old offshore oil rigs, drill holes, and other engineering feats of the hydrocarbon industry are providing a bridge to clean, renewable power.

Putting Money into the Ground

The Australian Geothermal Energy Association's research says that up to 40% of the government's 20% by 2020 renewable energy capacity goal could be reached with steam generated by injecting water deep into the earth.

And appropriators in the capital of Canberra are digging deep into the national coffers, putting $43 million into advanced geothermal power plant creation.

Washington, for its part, is now officially outpledged by Google.org in its geothermal energy exploration funding. That may change with a new presidency here, but it's clear that the combination of efforts by Google.org and Australia could put American geothermal far ahead of where it is now.

Google.org is putting its first dollars down in California's AltaRock Energy ($6.25 million) and deep drilling specialist Potter Drilling ($4 million).

Paul Thomsen of Green Chip Stocks holding and global geothermal heavyweight Ormat Technologies (NYSE:ORA) says drilling is key to advancing geothermal on a national scale.

"The deeper you drill, the more expensive it is," Thomsen says. "Geology brings magma and heat closer to the surface in the western U.S. If we could drill deeper, then we could move east."

Moving east in the U.S. with geothermal projects entails first looking south to Australia, north to Iceland (where most of that tiny country's electricity already comes from geothermal sources), and wherever else it takes to get the best cooperative technology.

Then we'll see the emergence of a strong worldwide geothermal industry, spawning more technologies and companies to invest in.

Regards,

Sam Hopkins

P.S. - With Green Chip International we're constantly on the lookout for companies that spread out all over the world to explore renewable energy opportunities. In geothermal, Ormat's run by Israelis, based in Reno, and operates on almost every continent. Jeff Siegel has geothermal credentials dating back to before Google was in most people's vocabulary, and long before Google.org's recent foray that netted AltaRock Energy and Potter Drilling several million bucks a piece. To get the jump on the next international geothermal profit play, check out GCI today.

Geothermal Stocks

By now you've seen the Chevron commercial touting their research and investment in alternative energy, including geothermal power. And even though a major oil company is just now expressing its interest, the black sheep of the renewables world is one Green Chip accepted long ago.

Geothermal , unlike wind, solar, and biofuels, rarely gets a piece of the limelight. And that's something I've not been able to figure out.

After all, it's an emission-free power source that's not affected by the shifting availability of sunshine and wind. That means geothermal is capable of being a base load power source, like coal- and natural gas-fired plants.

And as such, it's become price competitive with traditional sources of power in many areas, including the Southwestern US.

It's for all those reasons that we've been extremely bullish on geothermal stocks from the outset, boasting three geothermal plays in the current Green Chip portfolio.

Geothermal Stocks and Steam-Powered Profits

With oil having touched $92.22, renewable energy sources are looking increasingly promising. But even when oil was relatively cheap these geothermal stocks were still making their rise.

Now, with oil on the verge of $100, these plays are only going to go higher. Let's have a look.

Green Chip got in on Ormat Technologies (NYSE: ORA) all the way back in January 2005, shortly after the IPO. Take a look at the chart below...

We got in at $16.28 a share, and our readers are now sitting on gains of over 200%.

And, of course, you all know about US Geothermal (OTCBB: UGTH), one of the true darlings of the Green Chip portfolio. We alerted our readers to get into this stock back in July 2006, when the price stood at a mere $.80.

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Now, with the stock holding in the high threes, Green Chip subscribers have attained gains of over 380%!

Plus, with coverage recently initiated on this stock by Pacific Growth Equities, we're confident US Geothermal will continue its climb.

We've also seen good gains from Raser Technologies (NYSE: RZ). Although this company was late to the geothermal game, our readers have seen a 90% increase in this stock over the past twelve months.

Just this week, the company announced plans to begin drilling a geothermal production well in central Utah's Escalante Desert for use in another 10 MW binary-cycle geothermal power plant. It will be the first geothermal power facility built in Utah in over 15 years, and should serve not only for electricity generation, but to power the stock higher as well.

Another geothermal stock we're looking at is Nevada Geothermal (OTCBB: NGLPF). While it's not in the Green Chip portfolio, it has been featured for gains in our Alternative Energy Trader.

The company has been announcing great performance test from their properties and estimates it can produce up to 200 megawatts of power from the land it currently holds. The Street has been responding positively to this company lately, and at such a low price, this stock certainly has plenty of room to grow.

Geothermal Stocks Haven't Played Out, So Don't Fret Just Yet

You may have seen quite a few geothermal plays that have already made significant gains. But don't worry, there are still plenty to come.

As the world continues to exploit all possible alternative options to produce power, geothermal will certainly emerge as one of the clear winners. And as long as there are profits to be made, Green Chip will continue recommending winning geothermal stocks to its readers.

In fact, we have our eyes on a few up-and-coming geothermal companies right now.

Be sure not to miss the next round of geothermal stock gains. As you've just seen, the three geothermal companies in our portfolio have already netted gains of 200%, 380%, and 90%, respectively.

You can sign up today to make sure you don't miss another recommendation. Just click here.

Until next time,

Nick

Geothermal Companies

Interested in owning your very own wind energy company?

Goldman Sachs has one for sale. And it’ll only cost you a measly $1.5 billion!

According to the investment banker, this one may be able to throw off $800 million in adjusted earnings before interest, taxes, depreciation and amortization by 2011.

This is based on the assumption that the company, Horizon Wind Energy, controls 14 percent of all wind generation developed in the U.S. since 2000, and 2,100 MW of additional generation capacity by 2010.

Many analysts are looking at this sale as an indication that the market for renewable energy is nearing a top.

But the renewable energy market just isn’t that one-dimensional, and smart investors are keeping close tabs on today's geothermal companies.

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One Wind Farm Does Not a Renewable Energy Market Make

The renewable energy market is not a one-trick pony. And Goldman Sachs knows this. Just look at the firm’s recent activity in the market.

Last May, Iogen Corporation got a shot of steroids when Goldman Sachs threw $30 million at the company’s cellulosic ethanol technology. Iogen is the only company operating a cellulosic ethanol demonstration facility in North America. (Royal Dutch Shell also has a stake in Iogen.)

A few months later, SunEdison closed a $26.1 million private equity round led by Goldman Sachs. SunEdison is the Baltimore-based company that launched a $60 million fund to support the installation of new solar electric systems in the U.S.

And just this past August, Goldman Sachs pumped $27 million into a new geothermal company in Idaho that just happens to have access to one of the largest geothermal fields in the world.

The U.S. Department of Energy has actually estimated capacity in this region as high as 1,000 MW.

That’s enough to provide energy for roughly 1 million households.

The most recent U.S. Census data puts less than 400,000 single-family homes in the entire state. So really, this one region, which only one geothermal energy company controls, could potentially provide energy for more than twice as many single-family homes in the entire state of Idaho.

Fortunately, I alerted Green Chip Stocks members to this company before the market was really paying attention. But it woke up pretty soon . . . after the Goldman Sachs deal was announced.

Of course, that was months ago. So why am I telling you about it now?

Because it’s all about to happen again!

You see, I recently attended a dinner in New York with some pretty heavy players. I’m talking about big money. Like Goldman Sachs money! And you wouldn’t believe the way these guys were tripping over each other to get to the CEO of this little geothermal company.

Geothermal Companies Under the Radar Screen

Listen, in the world of renewable energy, few investors have a clue as to just how lucrative the geothermal energy segment is. But the utilities—especially those that are now required to provide a percentage of their generating power from renewables—are signing power purchase agreements left and right with these geothermal companies.

And it’s only going to get better.

In fact, by late January, I wouldn’t be surprised to see this $0.98 geothermal stock trading between $1.60 and $1.80 per share. And by this time next year – an easy $3 or more.

I realize this is a pretty bold prediction. But based on the performance of our last geothermal play, Ormat Technologies, I’m not too worried.

Since our original recommendation, Ormat Technologies has delivered a more than 150% gain. Take a look in the chart below:

And it's not just geothermal we're bullish on...

Read on to learn how to profit from numerous renewable energy sectors.

Jeff Siegel

Investing in Geothermal Power Companies

It was around 5:45 a.m. on Saturday. I was in Idaho, taking a morning run near my hotel.

The sun was still hiding behind the magnificent mountain ranges…the air was clean and not yet oppressive…and I was thoroughly enjoying my two-day respite from the city.

Idaho has a way of doing that.

In fact, had I not had to return to Baltimore, I’d probably be waist-deep in the Teton River right now, fly fishing with the locals.

Nonetheless, I can assure you my trip to Idaho was all business.

Last Saturday I attended the groundbreaking ceremony for Idaho’s first geothermal power plant. And not only was it an honor to be invited…it was also a reminder as to just how important this one geothermal field in the middle of nowhere is.

You see, on that morning I caught a glimpse of the local newspaper that sat outside my front door. The headline was screaming about potential brown outs and stressed electrical grids due to a 28,000-acre fire in Hell’s Canyon that was threatening two of Idaho Power’s main transmission lines.

If the lines were struck by flames, rotation outages were probable.

Our latest renewable energy play is up 50% in the last six days!!!

And we're just getting started.

This $1.24 renewable energy stock could be at $2.00 by the end of summer. And by next August - $3.00 easy.

The reason?

It owns a lucrative and pristine section of Idaho valley that's got enough geothermal energy to power more than half the single-family homes in the entire state!

And it just broke ground on a power plant that's already guaranteed it contracts with two major utilities. Click Here to Learn More.

In other words, power would be turned off to blocks of customers on an hourly basis before the lights would come back on. This allows the utility to balance supply and demand when part of the grid is down.

Of course, this has more to do with transmission lines than actual power generation. But it’s also a grim reminder as to just how dependent we are on the utilities’ ability to provide a consistent transmission of electricity.

And as the nation sweats out another heat wave – grids all over the country are being stressed to new levels…leaving many to wonder how much longer the utilities will be able to give us that consistent transmission of electricity.

U.S. Utilities Feel the Burn!

According to the Edison Electric Institute’s weekly survey of electric demand, the U.S. demand for electricity reached an all-time record during part one of our punishing heat wave a couple of weeks ago.

U.S. utilities delivered 96,314 gigawatt hours of electricity for the week ending July 22.

That’s more than 1 percent higher than last year’s record of 95,259 gigawatt hours.

On Monday, the Edison Electric Institute released a press release pledging its support of a new National Action Plan for Energy Efficiency.

The plan, facilitated by the DOE, EPA, PUCs, energy consumers and non-governmental groups, is essentially a blueprint of options that will encourage greater energy efficiency investment in the U.S.

It will emphasize:

Helping foster more energy-efficient buildings.

Promoting the development and deployment of more energy-efficient electric appliances, consumer electronics and other electronic technologies.

Accelerating the development of innovative electric ratemaking and rate designs that promote efficiency and allows customers to control their electricity bills.

Accelerating the development and use of “smart,” or advanced, electric meters.

Helping commercialize plug-in hybrid electric vehicles that will improve transportation efficiency, reduce fuel costs, improve the environment and help reduce dependence on foreign oil.

Of course, while the Northeast gets pummeled again by 100+ degree temperatures today, the concern is more immediate – and that requires a concept most Americans still can’t seem to grasp...

Conservation.

Renting couches for $500 a month? Mobile homes selling for an average price of $277,000?

Welcome to the 21st Century's first Boom Town!

In December 2004 a small town one-fourth the size of Philadelphia became ground zero for the largest oil discovery in 50 years.

The discovery was so big... the US now imports more oil from here than anywhere else on Earth (even more than Saudi Arabia). Find out how to profit from it.

Conserve This! We're Investing in Geothermal Power Companies...

Certainly we spend a lot of time around here talking up renewables.

How can we not?!!

This cat’s out of the bag – and there’s no turning back.

But Rome wasn’t built in a day – and neither are concentrating solar fields, wind farms and geothermal power company plants.

The fact is, the kind of renewable integration we need to seriously reduce today’s energy strains won’t be realized for at least a few more years.

That means, for consumers looking to save a few bucks and to help do their part to keep the lights on – conservation is the key.

I know, I know. How dare I even suggest it!

We’re here to make money – not to be reminded to turn our lights off when we’re not using them or to turn up the temperature on our air conditioning systems a few degrees to save energy.

Well, sarcasm aside, anyone who isn’t conserving today is throwing money right out the window.

But rest assured – we’ll be there to catch it!

It may not be the most politically-correct attitude to take, but the simple fact is most Americans will NOT take conservation methods into consideration during this heat wave. No matter how many warnings from the utilities and how much more it costs the individual consumer.

We certainly haven’t stopped driving our cars with gas going for well over $3.00 a gallon! And we definitely haven’t gone out of our way to reduce our energy consumption this summer – even as some local utilities jack up their rates as much as 25%.

So that means grids will continue to get pushed to the limit – and the demand for renewable integration will continue to get stronger.

Jackpot!!!

The global community often likes to take cheap shots at our gluttonous behavior.

But we’re going to profit from it!

In fact, our most recent geothermal energy play is up 55.8% since we first recommended it last week. And this thing hasn’t even begun to deliver its full potential yet. Not even close!!!

And if you don’t believe it, check it out yourself here .

By the end of the summer, this thing could easily be up another 10 to 15 percent.

But in the meantime, let’s hope our wasteful habits continue – and push our geothermal stocks to new heights!

(And for those of you getting ready to draft your hate e-mails, take a step back and realize the joys of sarcasm)

Until next time…

Jeff Siegel

Managing Editor, Green Chip Stocks