RE:RE:RE:RE:RE:strategic directioncalmandquiet wrote: Beaty didnt say that geothermal was risky, he said the returns were low. I am happy that they are pursuing the hydro and wind projects, although many wind projects have low returns as well. Solar is still a very expensive energy source as far as i know. Solar is difficult to even turn a profit absent some sort of government credit. Those credits are usually limited to a certain number of years.
I suppose you refer to this interview:
https://www.youtube.com/watch?v=oe7aNENOz20
From 08:30 on he is mentioning risk in the overall business and the lower reutrn.
Regarding geothermal he is referring to the RISK of drilling and hence he is expanding into wind, hydro and solar as he thinks geothermal is a tough business.
To wind he says that problem is that it soesn't blow permanently, it is a business that really can be cheap and so it depends where you build your plant, that they get far less for energy but the nice thing is that once its up it goes and goes and goes. "Great business in certain places".
So please listen carefully and do not mix up things.
Some words to solar: Ross Beaty says he loves solar. So he has some points for that, personally I am not that convinced of solar but they are looking for solar opportunities around mines which would make sense as there is at least one company working in Africa I know of that takes solar into account vs. oil generators for powering their future mine.
And regarding costs: @ 06:25 he says that nowadays you can develop wind and solar farms without subsidies.
As long as energy prices stay at current levels and carbon emissions are not priced in alternative energy will not produce the returns people were used to when the whole field was oversubsidized and electricity prices where at their highs.
So you earn lower returns but that does not mean the returns are negative. The company does flow cash, their projects (at least in my understanding) are able to earn their cost of capital, their overhead and the company overhead. so it should be sustaining and as I said I am in here for the long term and am happy they do not pay out a dividend where I have to pay taxes and fees on but redeploy this capital to projects that show decent IRR's.
Just my personal thoughts. DYODD
carinthian