3SOF

It looks like Russia may be facing energy crisis, i.e. shortage of natural gas for internal consumption and export. In the meantime, any investment venue Mr. Putin chooses, like railroads, or coal mining and new gas mine exploration may be a good investment for others. For example, steel industry will profit big time if he decides to build a new trans-Siberian railroad (companies like MTL). Also, it looks like coal consumption may be rising disproportionally in the coming years, thus providing another source of investment.

In Russian energy plan, coal is a question mark
By Judy Dempsey Published: December 27, 2007

BERLIN: When President Vladimir Putin signed a major energy deal in the Kremlin last week with his counterparts from Kazakhstan and Turkmenistan, state television made a big deal of it. As if to show how relations between Russia and those Central Asian regimes had improved, it gave ample coverage to a smiling Putin, praising the merits of a contract that commits Turkmenistan to building a natural gas pipeline along the Caspian Sea to Russia.

And what a deal. Two years of intense negotiations between Gazprom, Russia's state-owned natural gas monopoly, and the leaders of Kazakhstan and Turkmenistan, helped by Putin's persistent intervention, showed just how much the Kremlin wanted this accord. "It is extremely important," Putin said at the signing ceremony. "It will become a new, important contribution of our nations into strengthening the European energy security."

For some energy industry analysts, that said it all. With Gazprom committed to fulfilling its contracts to Europe, this was probably the first time the Kremlin has admitted that Russia requires gas from Central Asia because it does not have enough of its own to meet the increase in domestic and European demand.

"The reality is that Russia faces an energy deficit," said Andrew Monaghan, director of the Russian Research Network at the Defense Academy of the United Kingdom.

Russia's reliance on Central Asia for natural gas poses big questions for Europe, which imports nearly 50 percent of its gas from Russia, and particularly Germany. Its big energy companies, Wintershall and E.ON Ruhrgas, continue to tighten their links with Gazprom in the expectation that Russia will start investing in its own gas sector so as to tap the huge reserves that lay deep in the inhospitable regions of Western Siberia. But all this takes time, which is why Gazprom is prepared to pay heavily for the deal with Central Asia.

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Indeed, Turkmenistan's president, Gurbanguli Berdymukhamedov, struck a hard bargain. Gazprom agreed to pay $130 per 1,000 cubic meters of gas during the first half of 2008, compared with $100 it now pays. It will increase to $150 during the second half of 2008.

In practical terms, these hefty prices could be catastrophic for Russia's western neighbors like Ukraine and Belarus, which are dependent on Russia for its energy. They can expect to be saddled with higher energy bills in order to carry some of the cost of this Central Asian deal. As for the average Russian consumer, long accustomed to subsidized heating, the Kremlin will be very wary about raising prices.

This is not the time for Putin or Dmitri Medvedev, Gazprom's chairman, to raise prices. It would prove too unpopular just before the presidential elections, scheduled for March, when Putin is poised to become prime minister. Medvedev has already been nominated by Putin to succeed him as president.

Regardless of the outcome of that election, neither Putin nor Medvedev, nor for that matter the Europeans, can continue to ignore Russia's inability to produce enough gas for its own needs and Europe. Viktor Khristenko, Russia's minister for industry and energy, has already predicted that Russia will face a gas shortage of about 4 billion cubic meters this year, rising to 27.7 billion cubic meters by 2010. By 2015, it could surge to 46.6 billion cubic meters, or about a quarter of what Europe buys annually from Gazprom.

So even if Gazprom embarked on a major investment program instead of investing in newspapers, ski resorts and other unrelated expensive energy projects, there would still be a time lag before the natural gas reaches the transmission pipelines. That may explain why, in his quest for more energy resources, Putin is now seriously considering raising coal production. The plan, still under intense discussion, entails using coal increasingly for domestic consumption as well as exports so as to relieve the pressure on the demand for natural gas both inside Russia and outside it.

It is risky but fascinating option. At a time when Europe is beginning to take climate change seriously, several countries, including Britain, Germany and Russia, are relying ever more heavily on coal as an energy source. According to the International Energy Agency's World Energy Outlook, coal is the fastest-growing fossil fuel, with global consumption rising by 4.5 percent a year. It now accounts for more than 50 percent of the growth in global consumption.

If Putin is serious about diversifying into coal, this could provide the Kremlin with a unique opportunity to modernize the industrial sector.

Monaghan argues that Russian coal is particularly attractive to European consumers because of its low sulfur content. This means that it can be used in European plants that lack desulfurization units.

Part 2

In Germany alone, nearly 50 percent of power production in 2005 was based on coal. Chancellor Angela Merkel's coalition government plans to build up to 30 new coal-fired power plants over the next decade, despite Merkel's commitment to reducing greenhouse gases. The decision by the government, however, to halt coal production by 2018, because of its high costs, means that these power stations will have to be fed by imported coal, most likely Russian.

Here comes the second challenge for Russia. If its natural gas industry is seriously underfinanced, its long-neglected coal mines are even more so. Over half of the mines have been operating for more than 40 years.

The coal seams are thin and deep, making the mines prone to accidents. Production costs exceed revenues. Few new mines have been brought into production because of lack of investment. More important, Putin has to modernize Russia's railway stock, crucial for transporting coal and for the development of the economy.

Above all, Putin has yet to unveil a long-term energy strategy that details the investments Russia will undertake over the next decades.

So far, the Kremlin has gone only for stopgap measures, paying dearly for gas from Central Asia. Unless Putin is prepared to match his speeches about modernizing the gas and coal sectors with serious money, Russia's long-term reliability as an energy partner is questionable. Europe, with its increasing dependency on its big neighbor to the east, may finally start asking some hard questions.

Link to the article:
http://iht.com/articles/2007/12/27/europe/letter.php

ASTI closed at a new all time high of $26.75, up 26.3% on Friday's session. The stock was up an additional 3.36% to $27.65 in after hours trading.

There weren't any news or recommendations out to justify this significant one day move, but this isn't surprising, it has been happening with several solar energy related stocks.

We all know how the "solar group" has been hot over the last few months, but looking far ahead, say, 3 to 5 years from now, I believe there's a big difference between the "traditional" solar panel producers which use polysilicon in their manufacturing process and the thin film producers, which don't use polysilicon.

These differences can be seen in today's valuations. Consider FSLR, currently the biggest solar energy company in the World, which is a thin film producer. It trades at 40 times revenues and 224 times EPS. This considering 2007 estimates.

If you take a look at JASO, TSL, SPWR, SOLF, LDK and others, which use polisilicon and are essentially producing a commodity, their valuations are much, much lower.

The good news of all this is that ASTI is also a thin film producer, with the adjective that it makes flexible thin film solar panels. Of course, ASTI is still in the development stage, but it has the financial resources and a huge partner (StatoilHydro) to back it up and help in the company's worldwide marketing and distribution efforts.

FSLR currently operates a 120 MW manufacturing facility in Germany. With 120 MW FSLR is a $20 B market cap. ASTI plans to produce 25 MW in 2010 and 100 MW one or two years later. So, using these metrics, I would say ASTI will be a $4.2 B market cap company in 2010 and a $16.7 B market cap in 2011 - 2012. Currently ASTI is a $300 M market cap company. Of course, everything needs to go as planned for this to happen, nothing is for sure.

It's good to note that the market wasn't all that worried because StatoilHydro didn't increase its stake in ASTI to 35% (up from 23%), right after it was allowed to do it ... in my view the Norwegians wanted exclusivity for ASTI's products and ASTI's management said "no". I think the 23% StatoilHydro owns in ASTI will be worth more over the long term this way than the 35% would be worth if there was any exclusivity agreement.

I already wrote on this thread that ASTI can be a thirtybagger or more for the Main Porftolio, if I give it five years time. I'm fully prepared to own this stock throughout all ups and downs, always focusing on the long term outcome of this investment.

I think ASTI is a poor man's Nanosolar 

Hi Stocky,

I have seen you ranked 1 at SLO and you beat the M100!
congratulations!!!

I have read your blog and took some of your picks, will you repeat the contest with SLO?
I think that David's picks and your picks put together are the best in the world!!

So, best wishes to all of you, happy new year from Italy!

andrea

Thanks Tera,

Unfortunately I wont be taking part in next SLO. For either I will go on to the Strategy Lab panel or if superseded I would pass on the SLO-2. Remember David is the best stock picker and one with a better long term record than anyone I know. I have a long way to go to prove my strategies. Few months of results really does not prove much.

Got this from the yahoo mb. Sounds like asti.          Shorts Nightmare just started, huge reason why?     7 minutes ago     Stock Guru Mr. Tobin Smith sent this email out this Saturaday. He did not name the stock but it sure sounds like he is talking about ASTI!

Money-Doubler #3: The next big thing in solar power

Solar power is the real deal – it's not just for folks living off the grid in Vermont anymore.

Solar has always "worked," but it had been prohibitively expensive – so solar has taken a back seat to other "green" technologies.

But in much the same way that yesterday's multi-million-dollar mainframes begot today's low-cost personal computers, technological improvements have made solar increasingly affordable. In fact, the cost of solar electricity is expected to match that from conventional sources by 2014.

And that means prime-time for investing profits.

I know I've already made a bundle in this space. I know my ChangeWave Investing readers have already banked money-doubling gains in JA Solar Power and MEMC Electronic Materials. And I know we have many more big winners yet to come from this space, as industry sales triple over the next 3 years.

Some of our wealth will come from silicon-based photovoltaics – after all, that still accounts for 90% of all solar cells manufactured today.

But I want to make sure we keep ahead of trends – that's what we do at ChangeWave Investing. That's where the biggest profits are found.

And for my money, that means thin-film technology – a market that's growing in excess of 70% annually!

The little company I'm recommending now owns thin-film technology that is head-and-shoulders above anything else out there. That's why a very big player – a Fortune 500 company – recently took a 23% stake.

Consider this:

In one minute, the sun provides enough energy to supply the world's energy needs for a day. In one day, it provides more energy than the world's population could consume in 27 years. The sun's energy is free, and the supply is abundant.

All we need to do is find the best ways to capture it.

Imagine a building whose internal structure creates enough electrical power to run its lights and air-conditioning. Imagine a home generating enough electricity from its roof and windows to sell back to the power company on sunny days. Imagine military field equipment with the technology built inside to recharge batteries and supply enough electrical power to run off the battery on sunny days.

That's where thin-film solar comes in. And this little company is first out of the gate with the technology and knowledge to roll this out for large-scale commercial uses.

This is the next big thing in solar power. And it's going to make in-the-know investors very, very rich. Get all the details – including my full buy instructions – in my new online report 5 Money-Doublers for 2008

At 30% gain most borkers would give margin calls to those who are Short on margin. With ASTI now gaining more than 30% in few hours if the stock opens strong at open you may see some forced short covering. I will say sit back and enjoy if you are long.

up around $27 now.

very interesting article from seeking alpha; a must read:
http://seekingalpha.com/article/58786-pv-industry-in-oversupply-in-2008?source=yahoo

ASTI update:
insiders are continue to sell shares 
stock is continuing to rise 

Quotevery interesting article from seeking alpha; a must read:
http://seekingalpha.com/article/58786-pv-industry-in-oversupply-in-2008?source=yahoo

Indeed, great article la-onda. I was one of those thinking that demand for PV was almost unlimited and far higher than supply, but this article shows evidence of a different situation.

Anyway, as it happens with other stocks inside the Main Portfolio, ASTI is a unique company and we can't just put it in a bag with others of the same industry group and draw a conclusion.

From all those 12.9 GW of annual production in 2008 how many are flexible thin film PV? And how many will be used to make new buildings as a construction material? And how many have a $16 B partner to distribute them throughout the World?

Moreover, with $oil at $100, I don't buy the notion that Germany and Spain will reduce its incentives on solar energy. There's a worldwide war for energy independence, and the countries that don't have oil (like most European countries) and many others, won't turn down on incentives for solar and other alternative energies.

The post-Bush US will also be much more friendly towards alternative energy.

I'll keep holding ASTI for the long term.

nice link:
http://www.marketmasters.org/modules/news/article.php?storyid=176

Almost all solar energy stocks went down today and ASTI was no exception, falling 7.2%.

Investors, or better called "traders", put solar stocks inside a bag and trade them on momentum or the day's macroeconomic news. This is over the short term.

But over the long term, there are solar energy related companies that will see their value increase 10 to 20 times or more, and others that will lose 80 to 90% of today's value.

I believe ASTI is special and will be in the 1st group:

«Hydro presented concepts from three of its brands - Architectural Systems, Technal and Wicona. Each brand has a distinct image in the systems market, and each showed its respective strengths at the exhibition, which attracted 2,700 exhibitors from 49 countries.

    Some of the best-received concepts:

    --  Photovoltaics integrated in windows, doors, balcony railings
        and facades»

Which company, besides ASTI, will make photovoltaics integrated in windows, doors, balcony railings and facades?

«Next steps for integrated photovoltaic systems

Guests discovered that Hydro is one step closer to offering aluminum systems with integrated photovoltaic systems. Such systems can generate energy savings that exceed 60 percent, compared to today's systems.

The prototypes displayed at Batimat were the result of a successful pre-project between Hydro and Ascent Solar Technologies, Inc. (NASDAQ:ASTI) a Denver-based company which manufactures the flexible thin-film photovoltaic modules. Hydro owns 23 percent of Ascent Solar.

Joseph McCabe, who is responsible for business development for Ascent Solar, says the prototypes created "absolute excitement" at Batimat but that patience is key. Ascent plans to ramp up production of the photovoltaic modules in Denver next year, while Hydro will launch projects demonstrating the systems in France and in Spain.»

ASTI is special. I estimate (using FSLR's current valuation and production capacity of thin film photovoltaics as a guideline) that ASTI will be worth $3.8 B some time in 2009. That is about 14 times more than today's value.

What happens between now and then is of little interest to me, because I'll remain focused on the long term prospects for ASTI's unique business.

I'll keep holding ASTI for the long term.

ASTI: JANCO Starts @ Market Perform; Sets Tgt @ $24
Wednesday, January 09, 2008 10:59ET
Issuer: Ascent Solar Technologies, Inc. (NasdaqNM: ASTI)
Analyst Firm:  JANCO Partners Inc.
Ratings Action: INITIATE
Current Rating: Market Perform
Target Price Action: INITIATE
Target Price: $24.00

&

ASTI IR Link: http://www.ascentsolar.com/pdf/Ascent_Solar_Investor_Presentation.pdf

down with all other solar stocks 
still holding