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Fuel Cell Energy (FCEL) Well Positioned To Take Advantage Of New Growth Opportunities In Energy Sector; According To Senior Analyst

May 3, 2010 - The Wall Street Transcript has just published Alternative Energy Report offering a timely review of the Energy sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.

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Meghan Moreland is a Senior Analyst at Ardour Capital Investments, LLC, where she focuses on the fuel cell, superconductor and geothermal sectors. She was formerly an Analyst covering the renewable energy industry for First Berlin Equity Research, in Germany. Ms. Moreland was a Fulbright Fellow in Berlin in 2005-2006. She holds a B.A. in economics and German from Wellesley College.

TWST: In which of the subsectors of alternative energy do you see the greatest opportunity for long-term growth?

Ms. Moreland: Long term, I would say superconductors, and that would be companies like American Superconductor and Zenergy. Commercialization-wise, they're still a few years out. There is a lot of work that has to be done in bringing the cost down. Bringing the cost down will depend on ramping up sales. So we're seeing some interesting projects going on right now, some field tests and some collaborations with utilities. So things are definitely in the works to really commercialize high-temperature superconductors, and I think that in the long term, we're going to see that superconductors are going to replace traditional cables in certain areas, for instance, densely populated cities or areas where efficiency losses are pretty significant, because that's really what superconductors do. They negate the efficiency loss and electrical loss in transmission.

TWST: In which verticals or geographic markets do you see the best opportunities for growth?

Ms. Moreland: For geothermal, there is still a huge potential in the Western United States, where most of the country's conventional geothermal resources are concentrated. Also abroad, there is huge potential for geothermal build-out in Indonesia, in the Philippines, parts of Africa and also in Central Europe. Basically, areas concentrated along the so-called "Ring of Fire," which is just along certain rims where there was or remains a lot of volcanic activity. So it's not everywhere. Geothermal heat is everywhere, the more you drill down. But in terms of reservoirs being there, you need to have really hot, porous rock and then also a thermal reservoir. And I would say worldwide that there remains significant potential for that. And then for fuel cells, we're really seeing a lot of activity in South Korea. But that's mostly for the higher-temp fuel cells. Also the U.S., Connecticut and California are pretty big fuel cell markets. I think Europe as well, we're going to see a lot of activity there throughout the fuel cell space. And then superconductors, that's going to be global. It's going to start off mostly in the U.S. and Japan, parts of Europe, but the opportunity for that is global.

TWST: Of the companies under your coverage, are there some that stand out as being better positioned to take advantage of these growth opportunities?

Ms. Moreland: I would say Ormat is probably the best positioned to take advantage of the global activities and also in the U.S., just because there are some other geothermal players that are really keen on expanding internationally, which they will do. But Ormat is already international. They have power plants in the U.S., Guatemala, Africa, etcetera, and are trying to build out in Indonesia as well. So I would say just because of their size and their balance sheet, they will be able to do that and take advantage of that more than some of the smaller players. For fuel cells, I would say FuelCell Energy is well positioned. They're already very concentrated on the South Korean market. They have a strong partnership there with Posco Power. The South Korean market is strong because they have limited natural resources, particularly in natural gas. As I said, you can use several types of fuel with FuelCell Energy systems, one of which is natural gas. So they are using the fuel cell systems to produce power, because the efficiencies are higher. So they just get more bang for their buck, so to say, efficiency-wise for the natural gas that they put in.

The remainder of this 51 page Alternative Energy Report can be immediately viewed by purchasing online.


The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This Special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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