Grid Scale, Hydropower, Wind Power

Report Highlights Investment Opportunity in Distributed Energy

An investment firm in New York says distributed energy services could be the new wave in the financial community in the coming years.

NEW YORK, New York – Distributed energy are sources of electricity and power that are not dependent on utility grids, and include microturbines, flywheels and many renewable energy technologies, such as solar energy and wind turbines. “Thanks to major technological advances and energy deregulation, a wave of new investment in the power industry has just begun,” says Robert Winters, an analyst with Bear Stearns. “We believe that this coming era in the power industry could resemble the wave of investments which flooded into the telecommunications industry following the breakup of AT&T in the early 1980’s.” Demand for electricity in the new economy is being stretched beyond the means of the traditional power system in this country, explains the report, “Distributed Energy Services – The World’s Power and Transportation Industries: Set for a Revolution – Part II.” The report is the company’s second major analysis of the industry this year, and the study identifies technologies and companies that could be poised for growth in the distributed energy services sector. The demand for electricity has combined with a “confused and inconsistent” deregulation effort across the United States, resulting in dramatic price spikes and dismay among consumers, government organizations and companies. When mixed with the advancements in power generation technologies, Winters predicts “the next big investment opportunity for the coming decade.” “Thanks to recent advancements in the high-tech economy, plentiful, reliable and high-quality electricity has become a necessity,” explains Winters. “Unfortunately, blackouts and brownouts have begun to occur at alarming rates and large power grids have become less reliable. As such, the need for distributed energy continues to grow.” “Companies and municipalities need to find ways to ensure the availability of high quality, reliable power,” and the study concentrates on the potential of microturbines which are in the early stages of market commercialization but, according to Winters, are the best positioned of the new technologies to make an immediate impact. Microturbines can be powered by several different fuels and resemble downsized jet engines, yet are relatively small, quiet and efficient. “Microturbines are incredibly flexible and can be used as a main power source, a back-up power source or as an alternative when there is a spike in traditional energy prices,” he explains. “Microturbines can also be used in remote locations, including developing countries, that do not have access to electricity.” The report also examines flywheel technology, which store kinetic power in a spinning motion. This stored energy can be reconverted back into electricity by running the flywheel as a generator. “Flywheels can be environmentally and financially attractive replacements to battery-based back-up power supplies,” he explains. The report examines two distributed energy companies, Active Power and Capstone Turbine, as well as Ballard Power and Plug Power. These companies are at the forefront of what is likely to be “an explosion of technological advances that will improve the way we produce and use energy,” explains the report. “Innovations in fuel cells, microturbines and flywheels, as well as developments in other distributed energy technologies, could result in revolutionary changes in energy and the economy,” it concludes. “The menu of technologies which can provide high-quality, reliable power will be greatly expanded in the future and there will be a thrust toward pushing the generation of energy closer to the end user through the most economic means possible.” “It is exciting to think we are at the beginning of what is likely to be a period in which we see dramatic changes in the way we, and the rest of the world, think about power generation,” he says. Bear, Stearns & Co. Inc. is an international investment banking firm, with $25 billion in capital. It is based in New York City with 11,000 employees in Atlanta, Boston, Chicago, Dallas, Los Angeles, San Francisco and San Juan, as well as a presence in Beijing, Buenos Aires, Dublin, Hong Kong, London, Lugano, Sao Paulo, Seoul, Shanghai, Singapore and Tokyo.