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Biotech / Medical : Catalytica Energy Systems, Inc. (CESI) -- Ignore unavailable to you. Want to Upgrade?

To: Erik T who wrote (1445)	1/24/2000 3:43:00 AM
From: Erik T	Read Replies (1) \| Respond to of 1514

While Catalytica Pharmaceuticals is a business to grow earnings fairly predictably, Catalytica Combustion Systems, Inc. has the potential to blow the lid off when it comes to profits. There is an ever-increasing need for electricity generation. The presently installed capacity of electric power generation in the U.S. is 750 million kilowatts. The U.S. Department of Energy's "Energy Information Administration Energy Outlook 1999" report projects a need for 363 million kilowatts of new capacity generation needed between now and the year 2020 to meet both the growing demand and to offset the retirement of aging coal and nuclear plants. Approximately 81% of this new capacity is projected to be fueled by natural gas. The producers of electricity are under increasingly strict laws mandating ultra-low emissions from natural gas turbines. Nitrogen oxides (NOx) a primary pollutant leading to ozone and acid rain, carbon monoxide (CO) and unburned hydrocarbons are among the most highly regulated. Catalytica has come up with the most effective and cost-efficient solution to handle these pollutants. They use a proprietary catalyst rather than a flame to combust the natural gas. The lower temperature of this catalytic reaction does not allow the formation of NOx, so unlike other control technologies, there are no NOx to clean-up at the tailpipe of the turbine. This catalyst is called Xonon (zonon) and is poised to take the natural gas turbine marketplace by storm. Xonon will work on new turbines and can be retrofitted to work on older natural gas turbines. Catalytica Combustion Systems, Inc. has alliances with GE (the world's leading producer of large natural gas turbines), Solar Turbines (a division of Caterpillar), Allison Engine Company (a division of Rolls Royce), Kawasaki, and Pratt&Whitney Canadaas well Enron Venture fund has acquired a 15% equity stake in CCSI. Enron is one of the largest purchasers of large industrial gas turbines, and has ordered the first GE F-series turbines with Xonon for a new project in Pastoria, CA. Enron, CCSI, Pratt & Whitney Canada have also formed the Monterey Bay alliance to privide a turnkey solution for distributed power applications. There are primarily three markets for natural gas turbines: Very large turbines (50-400 MW) used by electric utilities to generate power for transmission over lines to homes and businesses. Smaller turbines (1-5 MW) for distributed power applications. These turbines would operate on-site at businesses that either use a lot of electricity (can do it more efficiently without the power-loss seen with transmission over lines), or businesses that need a reliable, uninteruptible supply (those with sensitive computer networks or hospitals for example). The third market is natural gas turbines for gas pipeline transmission stations. Xonon can work effectively on the entire range of natural gas turbines for these markets. Catalytica Combustion Systems, Inc. will design, market and sell Xonon to OEM manufacturers of natural gas turbines. They have formed a 50:50 joint venture with Woodward Governor, world leader in fuel delivery and control systems for turbines, to design and market to users of older, out-of-warranty turbines. The joint venture company is called GENXON Power Systems. The next post has an article by Joseph Cussen, VP, Business Development and J. Charles Solt, Director, Regulatory Affairs, GENXON Power Systems. The article discusses many of the industry issues and clear benefits of Xonon over other control technologies.