Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.
Roger Davey is that guy who just won’t take “no” for an answer.
After his native Australia turned him down, he packed up his dream and headed for America.
Finding a friendly ear in Arizona, Davey is now about to build America’s tallest tower right in the middle of the desert. It will be twice as tall as the Empire State Building upon completion.
At the center of this starry-eyed vision is something called a solar updraft tower.
It’s like the biggest smoke stack you’ve ever seen in your life — times one hundred — only it doesn’t produce so much as a whisper of smoke. Not a single vapor.
Instead, hot air rushes out of the huge, towering mouth of Davey’s creation — enough hot air, in fact, to turn a massive turbine that can generate enough power to supply electricity to about 150,000 homes.
Davey’s solar tower is not something he dreamed up on his own. Actually, it’s been done before…
His creation is based on a tower built in Spain by a German company in the 1980s. Located in Manzanares, Spain, the original tower was designed as part of an alternative fuel source in the wake of an earlier worldwide energy crunch.
The 650-foot behemoth worked beautifully for more than seven years, consistently generating 50 kilowatts of power.
It was only when the price of oil cratered that the tower was mothballed. The world, it seems, was not yet ready for the solar tower of power.
Forty years later, though, we find ourselves ready…
Enter one Roger Davey. A former stockbroker and securities dealer, he came across the tower in the late 80s while watching TV. He describes it as something of an epiphany: “I saw this and it just grabbed me… It was so green and so clean, and it could be a large producer of power.”
Davey went on to become the CEO of the Australian company EnviroMission (EVOMY.PK). The rest, they say, is history.
The tower is now closer to reality than ever before, and this tower will be much larger than its Spanish inspiration. At completion, it will rise some 2,625 feet out of the Arizona desert and be surrounded at ground level by a giant transparent canopy that itself stretches more than three miles across.
In effect, it will look like a gigantic upside-down funnel with a humungous tube protruding from the top.
In practice, the hot air beneath the canopy will be heated by the sun. It then rushes up the giant center tube in a display of hot air rising; as this updraft takes place, the wind it creates spins an array of giant turbine generators…
As the turbines spin, clean renewable energy will flow into the power grid.
In short, it’s an interesting mix of the best of both solar and wind power; but unlike solar and wind, the mechanical energy created by Davey’s machine allows the unit to operate 24/7.
As for cost, the project has a $750 million price tag. According to a 2005 industry report, this would imply about 10 cents per kilowatt-hour, which is roughly one-third the cost of electricity from current solar cells and almost half of the cost from nuclear power.
Financial models suggest the tower will pay for itself in 11 years; engineers believe the tower will have a life span of 80 years.
Once it’s built, Davey’s tower can be expected to produce power with virtually no maintenance. Better yet, it requires no “feed stock” — nothing but air and sunlight spin the turbines…
Think of it as physics in action, but without the potential for disastrous side effects.
Set to come online in 2015, the output from the first solar tower in Arizona has already been pre-sold in a 30-year agreement with the Southern California Public Power Authority.
While the road ahead looks bright for Mr. Davey, the next challenge is to actually take it off the drawing board and make the tower turn a profit.
For any entrepreneur, that is the ultimate test. Dreams can only take you so far…
But Davey’s is one free of fossil fuels — a good thing, if only a small part of the bigger picture.
Coal, oil, natural gas, wind, nuclear, and now solar towers, every source is a piece of the greater energy puzzle. Each has a role to play — and that’s not a bunch of hot air.
As for some more hot investment ideas, our editors have put together a few of their best plays in this week’s Wealth Daily and Energy and Capital articles, below.
Your bargain-hunting analyst,
Editor, Wealth Daily
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