Saturday, 26 June 2010

A sad day for Torrefaction

There are very few people on this planet that want to see Torrefaction Technology Commercialised more than I do. It has become my love, my passion, and goal of my life.

Each day I look to see if that elusive "Eureka Moment" has finally arrived. The moment when a Company or Research facility completes the construction of a Reactor; fills it full of biomass; turns the key, and it spits out Torrefied Wood.

One such moment I have been waiting for with anxious anticipation is the Start-Up of the Stramproy-Green / 4Energy Invest project. Having met the stakeholders and visited the facilities under construction I was SURE that THIS would be the FIRST to market. Alas, such was not to be the case.

On February 2, 2009, I received the following press release "4Energy Invest starts the construction of a lar..."

http://www.investegate.co.uk/Article.aspx?id=20090202170000H6627

WOW, I thought to myself; now HERE'S a team that can ACTUALLY make things happen. This would be a WORLD'S FIRST! A €13 million development that has all the makings of a winner! A quick look at the 4Energy Invest stock price revealed the market shared my beliefs and enthusiasm.

7 Months later - another ASTONISHING announcement; Stramproy Green had entered into a 5 year agreement to sell Bio-Coal to Essent Trading.

http://www.rwetrading.com/_internet/PDF/In_the_Press/Deal%20of%20the%20year.pdf

The press release was clear that this was the largest deal for Bio-Coal signed, ANYWHERE IN THE WORLD. FANTASTIC, I thought - A prominent Trading Company; a highly-experienced and credentialed Engineering firm; and a successful Power Generating Company all coming together to a common end. The heading of the Press Release was "DEALS OF THE YEAR!"

THEN - the pieces started falling apart. In December, the 4Energy Reactor was to be up and running. It DIDN'T happen.

On may 6th, 4Energy released their trading update for the first quarter 2010. In part it read -

"The main contract that Renogen (a Wholly-Owned subsidiary of 4Energy) signed for the construction of a large scale torrefied wood pellets production facility in Amel ("Amel III") included a provision of 340k EUR for delay damages in case the commercial operation was delayed beyond the planned take-over date. As of 31 March 2010, it can be firmly established that the amount of delay damages will be due by the main contractor." On December 31st their stock dropped to a low of €4.52. Whether this drop was a consequence of the reactor not completing on time is purely speculation.

This however, was NOT good news. I found it very hard to believe. After all; RWE (parent to Essent) has many highly skilled experts in this industry (having gained much experience, I assume through the investment in Toppel) and wouldn't endorse a technology that would ultimately fail? In my mind - I reconciled myself to the belief that this was just "growing pains", and that ultimately - given enough time, Stramproy-Green would be able to get it sorted out. Remember - there was the small matter of 450,000 tonnes of Bio-Coal that had to be produced for RWE in the future, using the same technology. Even at conservative market values of €180.00 per tonne - this represented €81,000,000.00 of business. (Not a small sum - even by Utilities standards.) By comparison - a few hundred-thousand Euros was a small price to pay in non-performance damages.

On the 15th of January, 2010, KBC Securities Issued an update entitled " 4Energy Invest - BIO-COAL, the GAME CHANGER". The then-current share price was €5.17 - but they predicted a "target price" of €7.80. Of course - their recommendation was BUY! It would appear from this market intelligence that EVERYONE believed that the problems were just small challenges that could be overcome.

https://www.4energyinvest.com/document/D132_20100115KBCSCompanyNote.pdf

Then the Axe dropped yesterday. "EPC Contract with Stramproy Green Technology BV TERMINATED!"

https://www.4energyinvest.com/document/D166_20100624_4EI_Title_EN_Final.pdf

The day before the announcement, the stock dropped to €3.35. In ONE DAY - the stock dropped 9%. To add insult to injury - it is now sitting at a mere 43% of the KBC prediction, made just a couple of months ago, and represents a HUGE drop in value to the Company.

My heart sank.

Surely this wasn't the end?

What about the future?

I suppose that the words of KBC were quite prophetic, in that Bio-Coal is the GAME CHANGER. I don't suppose anyone fully realised that the ABSENCE of Bio-Coal would also change the Game - in an unfortunate way.

As for us, we will quietly continue along, slowly, surely, and methodically engineering our reactor. In a couple of weeks, we will be firing up the DIAMOND Synchrotron,

http://www.stfc.ac.uk/About%20STFC/5807.aspx,

and shoot a few 6.3 TwE particles (at almost the SPEED OF LIGHT) at some biomass to watch what happens. This lovely billion-pound instrument has the ability to track the devolitilization process, second my second, on a molecular scale.

After that - it's in to the Rotating Anode X-Ray Analyser. In here, we can heat the biomass to 2,000 degrees and track the kinetic and chemical breakdown on a primary, secondary and tertiary basis. All of this is geared towards our "holy Grail". That is - a full and COMPLETE understanding of the process - so that once the reactor is built - it WILL WORK, and do "exactly what it says on the box."

Stay Tuned - this is getting Interesting.

3 comments:

  1. UPDATE;

    Since June 26th, the stock of 4Energy Invest has undergone a continuous decline, to a low of €1.85.

    This is a mere 23% of the "predicted" value, set by KBC only a year ago.

    Let's hope the decline stops, and things turn around in 2011.

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  2. The dutch plant seems to be up and running now. I've seen a video lately on Youtube. Any update on your side?

    All the Best
    Marie

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