Tuesday, August 14, 2012

Statkraft's Foray into Osmotic Power

Osmosis refers to the amount of pressure than needs to be applied to prevent the inward flow of water across a semi-permeable membrane.  It is a natural phenomenon at play in the proper functioning of plant cells and red blood cells at two examples.  Solutions with higher concentrations of salt have higher pressure and therefore energy.  For example, reverse osmosis systems used in desalination plants consume large amounts of energy to force the water through the membranes and leave the seasalt content on the other side.  It is not much of a leap at all to consider osmosis as an energy generation technology.  (See the recent article “Energy Recovery:  A Slender Stock,” in which I described the energy recovery devices used in desalination systems to cut down on energy costs.)

Osmotic or salinity gradient power can be accomplished with a membrane apparatus like those used in reverse osmosis through two processes  -  reverse electro-dialysis or pressure retarded osmosis.

Statkraft, Norway’s state-owned utility, has teamed up with membrane producer Nitto Denko/Hydranautics in an osmotic power project.   The alliance supports Statkraft’s osmotic power prototype osmotic power unit opened at Tofte in November 2009.  The plant has produced demonstration levels of power and has spurred Statkraft to spearhead efforts to develop cost-effective membrane solutions.  Statkraft is also considering a one or two megawatt pilot plant near Sunnalsora in 2013 or 2014.

In the meantime, Statkraft is generating power primarily with hydro-electric and wind power systems.  The company claims to be the largest renewable energy generator in the Europe with over 90% of its power from renewable sources.  Statkraft generated 22.3 billion kronas or about US$3.8 billion in revenue in 2011, providing a 48.9% EBITDA margin.

Strong financial performance is attractive to investors, but stock guys and gals will be disappointed in Statkraft.  It is 100% owned by the Kingdom of Norway.  The company’s bonds do trade on the Oslo and London exchanges.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

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