Clean Power Call Should Boost Naikun Stock
https://seekingalpha.com/article/81198-clean-power-call-should-boost-naikun-stock?source=d_email
Naikun Wind Energy Group (NKWFF.PK) should have a nice stiff breezeat its back now that BC Hydro has finally announced the Clean PowerCall after months of delay.
On Wednesday, BC Hydro officiallylaunched its Clean Power Call, to encourage the development of clean orrenewable energy alternatives.
The Call has been changed from aCall For Tenders process to a Request for Proposals [RFP] process andwill target up to 5,000 gigawatt hours of clean or renewable energy peryear from larger projects using proven technologies, such as hydro,wind, solar, and geothermal energy. The structured RFP will be acompetitive process involving independent power producers across theprovince.
NorthernSecurities analyst Philip Dale said the switch to an RFP process willbenefit BC Hydro and bidders like NaiKun because both parties can nownegotiate individual Electricity Purchase Agreements [EPAs] that takeinto consideration the special needs of larger, more complex projectslike NaiKun while also ensuring BC Hydro structures the mostcost-effective contract terms.
The proposal submission date forbidders is November 25, 2008 with final evaluation and EPA awarding byBC Hydro scheduled for mid April through June 2009.
Mr. Dale told clients in a note:
Whilewe are disappointed by the nearly 4 month delay on the part of BC Hydroto issue the Call we are pleased that it is an RFP process as opposedto a Call For Tender.
In the case of a Call For Tender process,the awarding of an EPA would have most likely gone to the bidders withthe lowest price without taking into consideration the uniqueproject-specific needs of larger bidders such as NaiKun.
Naikunis developing a major offshore wind project off the coast of BritishColumbia in an area known as the Haida Energy Field through itssubsidiary NaiKun Wind Development Inc. The stock has been on atailspin of late, dropping from the mid C$3 range at the beginning ofthe year to C$2.17 at Wednesday's close.
Mr. Dale wrote:
[Wednesday's]announcement of the Clean Power Call will reduce some of the inherentuncertainty for NaiKun as a process to move closer to receiving an EPAhas been established.
He maintained his "speculative buy" rating and 12-month target price of C$4.50.