Small Talk: Renewables group eyes higher profile with London listing
By Nikhil Kumar
Monday, 29 November 2010
The Kalina Cycle process was used to power lights at the Shanghai Expo
Another week, another listing ? and this time investors can look forward to something different from the usual crop of oil & gas prospectors and mining plays. Australia's Wasabi Energy is already traded down under and this week, it will make its debut on AIM with a secondary listing as it seeks to raise its profile and broaden its investor base.
It invests in alternative energy projects and its biggest interest is in Global Geothermal Limited, which owns the Kalina Cycle process, a way of cutting down the cost of generating thermal power.
Typically, thermal power plants work by heating water in a boiler, and then blasting the steam though a turbine to generate electricity. The Kalina Cycle is making that process efficient. In very simple terms, it works by introducing ammonia, which brings down the boiling point of water. That in turn makes it cheaper to heat it up.
Advantages include a 10 to 50 per cent hike in power generation from the same amount of heat, according to broker and nomina-ted adviser Cenkos Securities, whose analysts also point out that, as the underlying principles remain the same, the technology is already well understood by the power generation industry.
"The Kalina Cycle is now gaining acceptance globally as the most efficient process to convert low grade heat into electricity," Cenkos said. "It can deliver up to a 50 per cent improvement in power generating efficiency over traditional or organic processes. This makes the Kalina Cycle ideal for utilising heat generated from industrial proces-ses such as steel or cement making to supplement the otherwise purchased power requirements of the manufacturing facilities."
We are certainly intrigued. The method was applied at the recent Shanghai World Expo in China, where the Kalina Cycle was used to power up the spectacular lights at the corporate pavilion ? the so-called "Magic Cube" or "Dream Cube" ? and looks set to become more common in coming years.
Two final points. First, it is worth taking note of Wasabi's management team, particularly chairman John Byrne, who used to head Cambrian Mining and Coal International. Both were sold and Mr Byrne went on to chair the buyer, Western Coal Corporation, which recently became the subject of a $3.2bn (?2bn) bid from US group Walter Energy.
Second, Global Geothermal and the Kalina Cycle are only part of the story. Wasabi also has a 23.3 per cent stake in Australian Renewable Fuels and owns half of unlisted Aqua Guardian Group.
WAS Price at posting:
3.1¢ Sentiment: ST Buy Disclosure: Held
