The power of water… But can you drink it?

Rob Day’s last two posts at Cleantech Investing share the same theme: water. One points to an article in the San Jose Mercury News about investments being made in water purification and filtration technologies; the other looks at companies that are capturing energy from the ocean or using wave movement to generate power. Both are worth checking out, and make sure to follow the links he provides. Thanks for the info, Rob.

Xantrex: A Canadian enigma wrapped in potential

What’s going on these days with Vancouver-based power electronics leader Xantrex Technology Inc.? Yes, the company has gone through some troubles over the past 18 months, including competition from GE, the halt in wind development last year in the United States, and glitches with its outsourcing plan. But you’d think that was all behind them by now.

The company is making some strong inroads in Europe, particularly with its solar inverter products. The wind market has picked up dramatically, which must be bringing some benefits to Xantrex. And while its outsourcing of some manufacturing has been slow, progress is being made — so the company says.

For the longest time Xantrex’s stock was hovering around the $9 mark, so presumably the above problems were factored in and the road ahead would be an incline. But the stock has inexplicably plunged in recent days below $7, raising more concerns about the company’s performance.

Now, keep in mind the stock is thinly traded, so it’s not tough to move this baby up or down. Perhaps it will rebound over the next couple of days. But my gutt tells me that a negative announcement is on the way… I guess we’ll have to wait and see.

One thing’s for sure, venture capitalists still holding Xantrex stock aren’t a happy bunch. They watched the company IPO at $18 a share. It’s all been a downhill slide from there.

Solar boosts ATS, but no word on IPO

ATS Automation Tooling Systems Inc. was in many respects saved this quarter — and year — by its solar division, which consists of Photowatt in France and Spheral Solar Power in Cambridge, Ont.

The solar group, which from a revenue perspective is only Photowatt at this point, grew revenues in the fourth quarter by 57 per cent to $41 million. For the year the group had $143.8 million in revenues, 62 per cent higher than the previous fiscal year. Operating earnings jumped three-fold to $13.1 million, and operating margins grew to 9.1 per cent from 4.8 per cent.

“Demand for solar products is expected to remain robust well into fiscal 2006 and our manufacturing efficiency and throughput at Photowatt have shown additional major improvements this year,” said ATS chief executive and president Ron Jutras. “We continue to actively manage the tight supply and rising prices of silicon feedstock. While the effects of tight silicon supply are uncertain, we believe Photowatt has secured sources for a significant amount of its capacity for fiscal 2006. As a result we expect Photowatt’s operating performance to remain strong.”

Commenting on ATS’s newest solar business, Spheral Solar Power (SSP), Jutras said strong solar market demand has created a “great environment” for the launch of Spheral’s technology. “Unprecedented demand for clean, renewable solar energy globally has created substantial interest in SSP’s products among wholesalers, distributors and retailers.” He said the company shipped its first fully functional SuperFlex products in April.

“As expected production volumes are very modest but we have now reached the next stage of our plan that will put the SSP factory through a deliberate and focused program of optimization. This is the normal course of commissioning a manufacturing facility of this magnitude. Our first optimization cycle is well underway and in June we will go into an intensive improvement stage which is expected to last approximately one month. We will then restart production, assess performance and begin a new round of optimization, each time gaining throughput and capacity improvements. Each stage of this optimization process should be shorter in duration.”

ATS is taking it slow with SSP, presumably because it wants to get things right before marching into a hot market with a product that could have glitches. The current factory in Cambridge has an annual output capacity of 20 megawatts. Jutras acknowledged that things are going slow, but he defended the approach. “This methodical and deliberate approach to factory ramp up is vital to ensure the factory can achieve intended yields at full capacity.”

Besides, it’s not like ATS is missing the solar boat by taking it slow with SSP. Photowatt is strong and doing well, margins are on the rise, and the company seems to be doing a good job of managing its silicon supply needs in a tight market where prices are rising. Investors seem to agree. ATS shares were up nearly 9 per cent on today’s earnings report.

I didn’t get a chance to listen to the morning conference call, but so far I’ve seen no mention of ATS’s intention of spinning off its solar group (or pieces of it) through an initial public offering, despite widespread expectation/speculation in the market. If I hear anything more, such as from conference call transcripts, I’ll post a quick update here.

Cool company alert!

Check out Vancouver-based Sonic Environmental Solutions Inc., which has a patented process that uses sonic energy to clean contaminated soil.

Decontaminating soil is usually an energy-intensive process, but Sonic Environmental’s approach doesn’t require nearly as much electricity to produce the low-frequency sonic energy needed to clean soil. Here’s a brief description that appears on the company’s Web site:

“The company has commercial scale sonic generators that have been thoroughly proven in operation and has completed tests to demonstrate that our first Sonoprocess for the remediation of PCB-continamed soils will meet regulatory requirements for non-harzardous soil disposal or use.

“The company’s sonic generators produce extremely intense agitation via low frequency sonic energy. This is accomplished using a steel bar vibrating at its natural resonance frequency… The vibrational sonic energy from the bar is transmitted to chambers through which fluid materials or slurries can be pumped. The materials are thus subjects to very intense sonic agitation which has the effect of speeding up reactions and making them more complete.”

This is a company to watch closely, keeping in mind that the market for soil decontamination is worth billions of dollars. Its first plant in Delta, B.C., is nearly built. This spring it will begin cleaning up 3,000 tons of soil containing PCBs.

Ballard pushes ahead with co-gen fuel cells in Japan

Vancouver-based Ballard Power Systems has raised $18 million (U.S.) to push ahead with the development of its 1 kilowatt co-generation fuel stack, which is designed to provide heat and power to homes that want to reduce carbon emissions and their dependency on the grid. The money is coming from its Japanese partner EBARA Corp. of Tokyo and will be paid out over four years. On top of those funds, EBARA is making an equity investment in Ballard of $11.7 million (U.S.) in two payment — one this year and the other in 2006.

In return, EBARA Ballard, a joint-venture between the two companies that is 51-per-cent owned by EBARA Corp., will “gaint rights, over time, through an exclusive, royalty-bearing license, to assemble, service, develop, manufacture and sell stationary cogeneration fuel cell stacks in Japan.”

Ballard will retains all rights to manufacture and sell these cogen units outside of the Japanese market.

Dennis Campbell, president and CEO of Ballard, said in a statement that Japan, with some of the highest electricity rates in the world, is an ideal place to inititally target cogen fuel cells, which will run on natural gas.

“There are a number of conditions that support cogeneration success in Japan, including the high cost of electricity, the growing demand for energy in the residential and consumer sector, and a strong national energy policy focused on sustainability and energy-independence,” said Campbell.

The Japanese government provides subsidies and support for homeowners who take advantage of such alternative energy products. In 2005 the government is providing for $23 million in subsidies that would result in the installation of 400 fuel-cell cogen systems. Tokyo Gas, Osaka Gas, Nippon Oil and others already have cogen products on the market.

“Given the market scope of 47 million households in Japan, cogeneration will remain a key component of our corporate strategy,” said Campbell.

It’s nice to see Ballard focusing more on non-auto applications for its fuel-cell technology. Clearly, cogen units — whether PEM-based or solid oxide — have a quicker path to market than the fuel-cell car. Japan is an obvious place to focus, but hopefully Ballard can capture interest from other Asian countries where conditions are similar.

Investors didn’t seem to care, however. The stock was slightly down this afternoon, demonstrating a continuing lack of general confidence in Ballard.