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Capturing the Wind

My nephew Alex had a good laugh at my expense recently. I was showing off my new MP3 player and explaining to him how I could listen to a song on internet radio and, if I liked it, have it downloaded to my player in a matter of minutes. “Finally catching up to the new technologies are you Uncle Tony? So, are you going to get rid of those boxes of, what do you oldtimers call ‘em, record albums?

After getting up and dusting myself off from this blow to my perceived hipness, I paused to re-examine my slide behind the technological curve. Oh, there was a time when I was fairly current with tech developments, like back in the eighties when my stereo had the latest Dolby noise reduction filters to mask the scratches in my, ahem, record albums. Or even more recently, in the nineties, when I paid a month’s worth of wages for the latest laptop computer. I guess my slide behind the curve began when that laptop’s performance was eclipsed by models that were introduced six months later, while I resisted upgrading for about six years.

I think one of the reasons for my technological indifference is the vernacular that comes attached to new developments, because when someone is able to explain complex technologies in terms I feel comfortable with, my interest is renewed.

So I’ve become a fan of Tyler Hamilton, who is a technology reporter and columnist for the Toronto Star (www.thestar.com). Tyler writes a bi-weekly column in the Star called “Clean Break,” which focuses on emerging trends, technologies and investment opportunities in the cleantech space. He also has an excellent website at www.tyler.blogware.com/blog that aims to complement that column, offering a space for anyone to express views and report on developments related to the area. The site contains a host of useful clean energy links, and info on about fifty “cool clean canadian cos.”.

One of Tyler’s articles that caught my attention recently was a report on VRB Power Systems Inc. (TSX-V:VRB), a Vancouver-based company that has developed a system to store and supply large amounts of electricity on demand.

If you have ever relied on power from the wind, or a couple of solar panels and a battery, you can likely appreciate the fact that the juice may not always be available when you need it. This is challenging enough for a building that uses alternative energy sources, more so if you’re looking at supplying a good chunk of a population’s energy requirements from, let’s say, the wind.

That’s where VRB (http://www.vrbpower.com/) comes in, with their development of a technology known as “flow batteries”. These systems have a number of advantages over conventional battery systems, including the capacity to rapidly store large amounts of electricity during periods of peak supply, store it for lengthy periods if necessary, and discharge it quickly when demand is high. VRB also states that they have “the lowest ecological impact of all energy storage technologies…” Wind and solar power producers are attracted to this technology because it would allow them to guarantee a fairly steady flow of power to the market in all weather conditions, which in turn allows them to charge a premium for the power they sell.

In fact, VRB has just completed their first major sale to the developer of a 38-megawatt windfarm outside Donegal, Ireland. The windfarm will be one of Ireland’s largest when completed, and the $6.3 million order will provide a storage system that can power 300 to 400 homes during a typical workday, and can be scaled up into something much larger if the initial installation functions as advertised.

Here is what John Ward, Director of Tapbury Management and Sorne Wind Energy, partners in this project, had to say when announcing the agreement. “With the VRB system, we will be enabled to significantly expand and develop the substantial wind energy resources which the country has. This purchase is a significant milestone in the development of a real and credible alternative to fossil generation in Ireland, and Europe. This is the culmination of around 2 years work, and we see it as only the beginning of an expansion in the size and number of wind generation installations in Ireland. What we know we can achieve, is the firming up of an intermittent source of energy. Ireland has one of the best wind regimes in the world, but because wind is intermittent, this was always going to be a resource which could not be fully exploited.”

Heady words indeed, but an investment in VRB remains highly speculative in nature. Their financial statements show a company in dire need of some major sales, and with over 100 million shares outstanding, any profit that the company may eventually earn would be spread awfully thin. VRB closed trading on October 2, at $0.73, up about 10 cents since announcement of the Irish project, but down from over $1 three years ago, and $1.80 five years ago. Some shareholders have been waiting a long while for a return on their investments, but at least the company will now have a chance to demonstrate their technology on a large commercial scale.

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