VRB Power -- great potential, short and long term
by Tyler on Mon 13 Mar 2006 10:27 PM EST
Vancouver-based VRB Power announced last week that it sold a 10 kilowatt-hour energy storage system to the National Research Council of Canada. That, in itself, isn't a huge deal. But it could lead to future purchases by the Canadian government for "off-grid applications for a number of Canadian government agencies" if the flow-battery system works as promised.
"This process will also provide a high profile, independent third-party performance evaluation of the VRB technology for other potential VRB Power customers and will assist in the identification and simulation of other promising early market opportunities, facilitating their adoption," according to VRB president Vince Sorace.
This is just the latest in a string of positive announcements from VRB, which is beginning to attract more interest. Just this month Sprott Securities analyst MacMurray Whale initiated coverage with a $1.20 12-month target price, pointing to the fact that the company has a superior product to lead-acid -- as well as lithium-ion/nickel metal hydride -- batteries for large-scale energy storage. The stock is currently trading below 60 cents.
Whale also believes that if the company can begin building a sufficient order backlog this year, initially for applications such as telecom backup power supply, VRB has the potential to generate $30 million in revenues next year ramping up to more than $200 million by the end of 2009. The company recently hired a new director of sales, John Davis, signalling its aggressive push for sales this year.
In fact, in an interview last month Sorace told me that, "This is the year we'll start proving out tech through sales." He said those sales will initially come from telecom backup, remote applications, and renewable wind and solar initiatives, mostly in Europe. "Our sites range from 5 kilowatts to 10 megawatts," with the 5 kilowatt system being fully commercial by mid-year.
Whale says VRB is a speculative "buy" with huge potential. "There is no existing product that can offer the same combination of run time, price, scalability and reliability. As well, unlike fuel cells, the technology does not require expensive catalysts and does not face challenging fueling infrastructure issues," wrote Whale in a recent report on the company. "We believe, lastly, that management has the appropriate experience and depth on all fronts; product development, sales, and manufacturing to fulfil its business plan."
I first wrote about VRB here about 10 months ago. Here's the link if you want some more background on the company.
tyler.blogware.com |
