Thursday, June 12, 2008

Cogeneration Stocks: the Forgotten Green Power

One of the alternative energy green stocks that is rarely discussed in the press is cogeneration. Cogeneration is the generation of two or more sources of power, such as electricity, heat, and steam, from one source of fuel. Even cooling can be another byproduct of cogeneration plants though the use of absorption chillers with moderate heat.

Cogeneration plants come in all sizes from those for individual homes to those for large utilities. Consolidated Edison Inc. (ED) is the largest cogenerator in the world with seven cogeneration plants which produce 30 billion pounds of steam to Manhattan every year. All of the following stocks have market caps over $230 million and most trade either on the New York Stock Exchange or NASDAQ.

Ballard Power Systems Inc. (BLDP) is a British Columbia based manufacturer of hydrogen fuel cells for materials handling, residential cogeneration systems, and back-up power. The stock has a PE of 12.

Constellation Energy Group (CEG) designs, constructs and operates renewable energy, and cogeneration facilities for commercial, industrial and governmental customers. This company, founded in 1906, is an electrical generating company which owns and operates generating plants and fuel processing facilities utilizing various types of fuel including nuclear, coal, natural gas, oil, solar, geothermal, hydro and biomass. The P/E is 20 and the PEG is 1.03. The yield is 2.2%.

Capstone Turbine Corp. (CPST) is involved in the development, manufacture, marketing, and servicing of microturbine technology solutions used in stationary distributed power generation applications for cogeneration power. The company recently generated negative earnings of 24 cents per share for the recent quarter.

Husky Energy (HUSKF.PK) is a Canadian integrated energy company which maintains interests in two cogeneration plants, a 215-megawatt natural gas-fired electricity Meridian cogeneration facility and a 90-megawatt natural gas-fired cogeneration facility adjacent to its Rainbow Lake Gas Processing Plant. The stock has a PE of 12.

Veolia Environnement SA (VE) is a Paris, France based company which trades on the New York Stock Exchange. They provide environmental management services, such as cogeneration services, to governmental agencies, individuals, and industrial and commercial customers. The stock has a PE of 18, a PEG of 1.42, and a yield of 4.7%.

Plug Power Inc. (PLUG) designs and makes fuel cell systems. The company is in partnership with Honda to develop home co-generation of heating, power and hydrogen. The stock generated negative earnings of 80 cents per share for the quarter.

If you like green stocks check out the following:

Solar energy
Fuel cells
Wind power
Wave power

Author does not own any of the above.

By Fred Fuld at

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