The following is a Stockhouse Q&A with Cam Prange, President of Kingsdale Capital Markets. He is talking on the subject of
EnerDynamic Hybrid Technologies Inc. (V.EHT)
Can you give us some background outlining how EnerDynamic was formed.
EHT was created from the desire to help solve the current global energy crisis and to deliver clean and renewable energy solutions. At the heart of EHT's products and solutions are the principles of
intelligence, bankability and sustainability.
The company aims to combine traditional solar energy with patented wind energy and battery storage solutions, allowing EHT to provide unique and customized energy solutions ranging in scale from a Micro-utility to a traditional Utility.
What is the investment case for EnerDynamic?
EHT is a relatively small Canadian renewable energy company that is profitable today and growing rapidly. Currently, EHT is participating in the various global Feed in Tariff programs for solar energy as a manufacturer and installer. However, more than 50% of the world no longer needs to subsidize solar and wind energy due to the significant declines in the cost to install renewable energy.
By providing energy on demand through its distributed energy (micro-utility) solutions EHT is poised to grow into a market leader in selling and installing hybrid solar, wind and battery systems that can operate independent of the electricity grid and does not require any subsidies. Moreover, EHT participates in the global expansion of solar and hybrid generated power as a system designer, manufacturer, installer, and in some cases, an owner / operator.
Many areas of Canada and indeed the world do not have access to a power grid and are forced to go without or generate their own power through the use of expensive, polluting diesel generators. EHT’s hybrid solar wind and battery systems can solve this problem with a micro grid power system that generates the power where it is being used quickly and at less cost.
What makes EnerDynamic standout from other solar/wind energy companies?
EHT provides a unique energy solution platform which integrates solar PV, and wind generated power along with battery storage in a scalable and customizable format. Because this power can be generated at a local level, on the home or in the village, it does not require a further investment in power transmission assets. This provides EHT with a significant
competitive advantage in the market place. As well, EHT designs its solutions to be
intelligent, bankable and sustainable. EHT is able to deliver solutions to a full range of clients, including homeowners, businesses and governments.
With energy prices on a rise, how will this affect EnerDynamic?
Rising energy prices and falling costs for renewables are working to create “grid parity” for renewable power where its cost is becoming equal to or lower than traditionally generated power. EHT’s micro grid solution lowers the cost further as the government using this option frees itself from the requirement to invest capital intensive power transmission lines.
If you could highlight one key competency to investors, what would that be?
The key competency is the highly experienced management team with a background in all facets of manufacturing, installing and managing energy projects. The combination of EHT’s unique technology with this team’s years of experience and industry contacts has resulted in relatively early and sizable commercial success.
EnerDynamic has a unique product line, is there one product that stands out from the others?
The EnerCube: Power in 1 Hour Solution, which combines a patented wind vane and turbine with patented racking and solar PV modules and optional battery back-up. It can be packed in 1 container and within arriving at its destination, anywhere in the world, be assembled and operating within 1 hour.
The installation is simple and fast. Within 1 hour the EnerCube can start to produce enough daily energy to pump 4,000 litres of life-saving water, operate a small medical clinic, operate refrigeration units for critical vaccine storage, meet the power needs of small villages, power a cell phone tower, operate a traditional sized home or multiple smaller homes.
EnerDynamic has expanded into Africa and Latin America, how will this move contribute to the bottom line?
Africa is experiencing an unprecedented demographic shift. In 1950 Africa represented 9% of the global population. This century will see them grow to a 40% share. Africa’s population is on target to quadruple in this century according to the UN. The power demand from this level of population growth is already being felt and will continue to grow.
The market potential of Africa and Latin America is both significant and immediate. These countries need power today, not years from now, and large commercial size solar and wind farms require billions of dollars of supplemental spending by governments in order to build transmission and distributions lines to accommodate these utility scale projects.
The majority of Governments in these regions cannot afford these investments, leaving large scale projects stranded or in perpetual waiting mode. EHT has the ability to give Governments the advantage of avoiding these massive investments in favor of a distributed (micro-utility) energy solution on demand and where it is needed most. At EHT they like to use the analogy that the developing world by-passed the need for telephone land lines and went directly into cell phones. They believe that the same will be true for energy. Transmission and distribution lines will be in less demand when Governments can access distributed energy solutions.
Can you describe the milestones EHT has accomplished this year?
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Commercialization of the EnerCube and EnerPole energy solutions.
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Significant revenue growth with profitability.
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A growing backlog of booked orders.
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Key additions to the management team.
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Expansion into Africa and Latin America.
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Public listing on the TSX-V as a Tier 1 listing.
What are your expectations for the remainder of 2014 and early 2015?
Continued revenue growth and margin expansion. Continued additions to a growing backlog of booked orders. Multiple projects to be built in Africa
Why would investors buy EnerDynamic shares?
EHT is an emerging global leader in distributed (micro-utility) energy solutions. This sector in the global economy is poised for massive growth in the coming decade. While EHT has a strong backlog for traditional solar energy projects in North America and Europe, the growth driven by the energy needs of the developing world is in the early stages. EHT's strong competitive advantage and proprietary solutions will provide EHT the opportunity to benefit from this growing demand.
Also, while many small cap growth companies being considered by investors have exciting future prospects, most are financially challenged and are not currently profitable. EHT is profitable today and growing fast. EHT offers investors a compelling growth story that is here and now, not years away.
Some of EHT’s projects generate long term recurring revenue backed by governments. This type of revenue stream could support a healthy and growing dividend stream, a feature that is in high demand by investors today.
FULL DISCLOSURE: EnerDynamic is a client of Stockhouse Publishing.