Follow the Money: 5 Firms Grabbing Big Bucks That Belong on Investors’ Radar Screens: #3 GreatPoint Energy
Submitted by EnergyTechStocks.com
One way to try to look into the future and get an early read on tomorrow’s winners is to “follow the money.” Which companies are attracting big bucks through deals, venture capital infusions and joint ventures? As a new industry, alternative energy is loaded with companies that will or won’t succeed. Thus a strategy of following the money is even more useful as a starting point for investors as they research which firms are most likely to emerge as big winners.
Follow-the-Money Company #3 – GreatPoint Energy, a Massachusetts-based private company with a technology that could make environmentalists change their minds about coal.
Last fall GreatPoint, which is privately held, said it received $100 million from investors to build commercial-sized plants that use its proprietary process for converting coal to natural gas. The significance of this announcement was as much in who was investing the money as the large amount raised. Investors included Suncor, Dow Chemical, AES and Citi’s Sustainable Development Investments unit. The presence of each is illustrative of GreatPoint’s potential to a big winner because it may be able to solve a number of energy and environmental problems at one time.
For Canadian oil company Suncor, GreatPoint technology could hold the key for fully exploiting Canada’s tar sands deposits without over-stressing Canada’s limited natural gas reserves. For Dow Chemical, GreatPoint technology could generate a new source of valuable chemicals that are byproducts of the company’s coal-to-gas process. For AES, an independent power producer with a lot of both coal and renewable generation, GreatPoint could be the key for expanding its coal capacity without sacrificing the green image the company is trying to build through wind and solar expansion. For Citi, GreatPoint potentially represents a way to appear green and not be opposed to coal, which nearly all electricity experts in the world say must continue to be heavily utilized if the world is to increase electrical capacity enough to keep up with rising population.
To be sure, there are other coal-to-gas technologies, but none are said to be as low cost as GreatPoint’s. GreatPoint’s future would seem to be well worth investors’ attention, not just for the company itself, but also for how its ultimate success or failure will impact other energy and chemical industries.
