APWR produces Distributed Power and another $146 per Kilowatt makes DP more cost effective!

SHANGHAI government announced yesterday that it would improve incentives for local factories and businesses that install an energy-saving power generation system inside their buildings.

The system, named Distributed Generation, is based on a small gas-fueled power generation unit. Operators build these units on site, rather than take power from the national grid, which is powered by coal-fired power stations, usually located far away from power users.

Energy is saved because the distance between the power generator and the user is greatly shortened. In a traditional power grid, up to 70 percent of generated electricity is wasted during its transmission.

“Usually only 30 to 47 percent of electricity generated by large power plants is consumed by users,” said Pan Yahong, an engineer with the Shanghai Branch of China Huadian Corp. “The rest is wasted during transmission. But the Distributed Generation system ensures a low rate of wastage and could improve usage efficiency to up to 89 percent.” Huadian is a major promoter of the system to the Chinese market.

Distributed Generation also cuts power usage by collecting the heat given off during the power-generation process and using it to heat buildings.

Because it uses natural gas rather than coal, the system could lower greenhouse emissions by 34 to 61 percent, a United States survey found, according to a report on the China Energy Service Website (www.chinaesco.net).

The government yesterday announced it would raise the subsidy paid to those companies that install the system. Building owners will be paid 1,000 yuan (US$146) for each kilowatt of capacity their generator has.

The subsidy was 700 yuan when Shanghai first announced the subsidy policy in August 2005.

Local users, such as the Minhang District Central Hospital and Pudong International Airport, will also continue to enjoy discounted natural gas, said officials.

The allowance compensates the expense of buying and installing the gas generators.

The system could reduce operational cost of offices by 11 percent, and that of hospitals by 21 percent, according to the US survey.

Maybe the Michigan governor makes the right decision and goes small localized green renewable vs big , expensive, wasteful, polluting, DIRTY COAL with a horrific price tag down the road.  Dirty coal plant costs 1.2 BILLION for 600megawatts, what a waste given that only 300 megawatts is actually needed but due to the transmission costs of losing 1/2 of the 600 megawatts, you must overbuild and over spend.  The rest of the world is faced with the exact same dilema and 1.2 billion is a lot of money only to throw out the window 300 megawatts just to transmit the power to the end consumers.

This exact scenario is the reason APWR will be a power in China down the road building small, concise localized power stations which will use wind and solar and geothermal or natural gas small turbines.

quite interesting that I cannot find another wind blog site , can anyone out there help me out or am I the ”’Lone Ranger”’ on point with Wind Power???

As renewable money fund managers scour the landscape for bargains to find the gems of 2009, one must look at China’s largest wind manufacturer APWR , and begin a position to take advantage of the gains to come from producing wind power and distributed power stations.   The key for APWR will be to utilize their own internal wind turbine business to build and design smaller wind power distributed power stations for the needs of China and the rest of southeast Asia.   Vietnam, Thailand, Indonesia , and many other countries are all clamoring for more power as countries struggle to raise capital , the distributed smaller power station gains steam in moving forward.   A 20 megawatt station powering 20,000 homes would cost around 30-40 million dollars fully installed and designed and built by APWR.  Keeping the design,  installation, and building the wind turbines at their own internal facility in Shenyang, China will spur contracts down the road.

Backlog is around 800 million and the global credit crisis will take a chunk out of that backlog but newer contracts will minimize the loss of credit challenged contracts.  The Chinese government does not have any trouble raising money given the 586 billion stimulus package the government has already passed and implemented.  The upside to APWR future stock price is how fast China government can implement and sign contracts for wind and more electrical power stations.  Distributed power stations , which APWR has recognized 100% of revenues and profits in the past , will gain steam because around 50% of all electrical capacity built in the USA for the national grid is lost in distribution from the power station to the destination facilities receiving the power.  In China, these small localized power stations produce the power directly to the customer thus increasing the efficiency and lowering the cost and price to produce power.   Distributed power stations will become the norm for most under developed third world countries.

Future earnings from Roth Capital (which recently cut their estimates after a current on site tour) are for $1.38 per share end of 2009.  Current price to earnings is a solid 4 and no p/e factor is given to the current pricing of the equity.  Balance sheet of APWR is solid and financed with cash on the books of over $1.80 per share and zero debt.   APWR has a potential to become a grand slam if and when markets correct and the world gets back on track to building and installing much needed electrical power and using green , clean windpower instead of coal.   Some countries have plenty of wind power potential, ie Thailand and Vietnam and the inner Mongolia region of central China has the equivalent wind power of Montana and Wyoming combined.   APWR has 7 wind farms approved they will be building and running for future residual revenues in inner Mongolia.  This particular region has 118 wind farms proposed by the Chinese government and the Mongolia region is where the 2nd wind turbine production facility is planned and approved for future expansion by APWR.

Green and renewable energy funds must include APWR into their mixture of investments as wind power and China and distributed power stations using geothermal, solar, and especially wind are going to contribute to the bottom and top lines for APWR going forward.  The ability to start a position in APWR is paramount in the short term as the ribbon cutting ceremony is going to bring a lot of publicity and interest in the small float APWR as the title of “”"China’s Largest Wind Producer”” sinks in with investors as APWR will produce around 1100 megawatts of wind by end of 2010 from this first facility.  Norwin and Furhlandher are helping/partnering with the design and installation/building of the turbines using existing Dutch and German proven engineering.   As the world recovers from this credit slow down, APWR p/e factor is going to approach 10 with demonstrated earnings around $1.30 per share end of 2009 gives you an equity priced around $13 per share conservatively.   APWR is a must own for any green , clean fund on investing for our cleaner, greener future!