The transition from fossil fuels to renewable energy due to climate change concerns has given rise to tremendous opportunities. As the decarbonization of the global economy is expected to soak up an estimated $150 trillion, there is tremendous value to unlock by gaining exposure to the burgeoning sector. ASRE, SUNW, REI, and GEVO are some of the stocks that could be closely watched owing to their prospects in the trillion-dollar marketplace.
Astra Energy Taps Renewable Energy Opportunities in Tanzania
Astra Energy Inc. (OTC: ASRE) stands out as a high-return alternative energy company as it invests and develops renewable and clean energy projects in markets where demand is high, and supply is low. The company stands out for its ability to secure crucial technologies and assets while identifying valuable market opportunities amid the trillion-dollar renewable energy opportunity.
Driven by its goal of creating a more secure and sustainable power sector, Astra has set out to tap the strong demand for renewable energy in Zanzibar. On June 20, 2023, the company presented a feasibility report and all the relevant documentation to secure 207 acres of land for a 33-year renewable lease in Zanzibar.
The presentation marks the initial step in the company's bid to offer clean and renewable energy to the people of Zanzibar. In return, the company is to secure a long-term sustainable revenue base that should deliver value to shareholders.
Tony Thompson, Astra’s VP of Electrical Power Generation, stated, “This project will generate green, long-term, sustainable revenue for the Company and deliver value to shareholders, while creating value for the residents of Zanzibar by providing a stable source of clean and renewable energy on the island.”
The feasibility report presented to the president of Zanzibar, H.E. Hussein Mwinyi, is for the company's Zanzibar Clean and Renewable Energy project. Astra has already stipulated plans to own and operate the project to generate renewable energy and sell it to ZECO, the country's state-owned utility. The proposed project on Unguja Island is to generate 50 MW of clean and renewable energy.
Astra is to use 199 acres of the allocated piece of land in the Kibele District to construct a solar PV plant. There are plans to install a battery storage system at the solar PV plant to help stabilize power and reduce the island's reliance on the 100 MW submarine cable from mainland Tanzania. The company also intends to deploy a Holcomb Energy system to amplify the plant's output.
The additional 8 acres adjacent to the solar park are for constructing a waste-to-energy facility. Its long-term goal is to foster the economic, environmental, and social landscape. The company intends to process up to 300 tons of solid waste from the Kibele landfill to generate energy.
Astra is increasingly tapping into emerging opportunities as the Tanzanian government looks to modernize its critical infrastructure in the energy sector. The race to increase installed generation capacity to support a more industrialized country is unlocking new opportunities that the company is taking advantage of.
Consequently, the company reached an agreement with the Tanzania Electric Supply Company on June 22, 2023, to develop a 350-megawatt combined cycle power plant in Mainland Tanzania. Astra will construct and operate the 350 MW project as an independent power producer, selling power to TANESCO.
“The Tanzanian government is actively working to modernize their critical infrastructure and has plans to increase installed generation capacity to support more industry in the country,” states Tony Thompson, VP of Electrical Power Generation for Astra Energy Tanzania Limited.
The renewable projects in Zanzibar and Mainland Tanzania have the potential to generate significant recurring revenues for the company for many years. Over the next 25 years, Astra could generate between $180 and $200 million in revenues from the two projects.
Sunworks Inc. (NASDAQ: SUNW) is one company well poised to benefit as the world tries to fight climate change by directing investments toward renewable energy sources. With the world's annual pace of solar installations expected to quadruple over the next eight years, the company is staring at a massive opportunity. Its prospects in the segment are based on the fact that it provides photovoltaic and battery-based power and storage systems for commercial and residential markets.
In the race to strengthen its prospects amid the multibillion-dollar opportunity, Sunworks confirmed the appointment of Mark Trout as the CEO of its wholly-owned solar business on July 12, 2023. He is taking over from Sunworks Chief Financial Officer Jason Bonfigt
Mr. Trout brings over 35 years of senior commercial development and operational experience that should greatly benefit Sunworks solar business. Given his depth of experience in the residential solar and advanced technology industries, he will be looked upon for direction. Sunworks CEO Gaylon Morris expects Trout to help build a residential solar platform of scale in the regional markets.
The appointment comes on the heels of Sunworks entering into a definitive agreement with a single ESG-focused institutional investor for the purchase and sale of 4 million shares of the company's stock on June 8, 2023. The company expects gross proceeds of about $4.6 million from the offering. A good chunk of the money is to go towards working capital to support the company's endeavors in developing high-performance solar and battery storage solutions.
Gevo (NASDAQ:GEVO) is another company flexing its muscle in the multi-billion renewable energy sectors while offering renewable gasoline and diesel, isooctane, isobutene, renewable natural gas, and sustainable aviation fuel. As a premier provider in the fast-growing sustainable aviation fuel market, the company inked a Master Services Agreement on July 24, 2023, with a subsidiary of McDermott International Ltd.
The agreement provides front-end engineering, early planning, and prices for multiple sustainable aviation fuel facilities in North America. The first Net Zero 1 facility that is to be located in South Dakota is to produce up to 65 million gallons of sustainable aviation fuel, diesel, and renewable gasoline once it comes online.
The McDermott subsidiary has agreed to provide engineering execution planning and pricing for the engineering procurement and construction of Gevo's Net Zero 1 project. The Net Zero Plant Design has been chosen because it is cost-effective, reliable, and scalable, thus able to meet the surging demand for sustainable aviation fuel and renewable hydrocarbons.
"Gevo's Net-Zero Plant Design, with its focus on carbohydrates as feedstock, has been carefully chosen for its exceptional cost-effectiveness, reliability, and scalability to meet the surging demand for sustainable aviation fuel and renewable hydrocarbons. This MSA is the first step towards adding McDermott as a project EPC partner. In addition to Axens, Praj, and Fluid Quip, adding McDermott to our team, fortifies further our capabilities in project execution and modularization, especially when teamed with Praj. In an increasingly challenging project environment over the past years, this collaboration is designed to ensure we stay on track, manage costs, execute our NZ-1 project, and be capable of executing additional NZ projects,” stated Dr. Chris Ryan, President and Chief Operating Officer of Gevo.
The plant will produce sustainable aviation fuel that is in high demand and generate 550 million pounds of high-value nutritional products. All the electricity needed to power the plant is to come from wind energy, affirming the company's sustainable and environmentally friendly approach to fuel production.
In May, Gevo reiterated its commitment to returning value to shareholders through stock buybacks. It announced a $25 million repurchase program to opportunistically repurchase shares while maintaining the company's ability to fund development projects. The repurchase affirms the Board's strong belief that the company's shares are undervalued and boast tremendous upside potential. The repurchase is also expected to enhance the company's value in the years ahead.
Ring Energy, Inc. (NYSE American: REI) a company engaged in the acquisition, exploration, and development of oil and natural gas assets in Texas, has moved to strengthen its presence in the Permian basin. The company agreed on July 5, 2023, to acquire the assets of Stronghold II Operating LLC.
The acquisition should double Ring Energy's production capacity reserve and projected cash flow. Under the terms of the agreement, Ring Energy is to pay $200 million in cash at the closing of the deal, with $15 million in deferred cash payments due in six months.
Ring Energy CEO Paul McKinney expects the acquisition to diversify the company's commodity mix further and provide increased optionality upon closing. The company is also expected to benefit from an increased inventory because of its high rate of return drilling.
Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, “We are pleased to announce our agreement to acquire Founders’ conventional oil and gas assets in Ector County, Texas. These assets strategically expand our existing operations in the southern portion of the Central Basin Platform, allowing us to capture operating cost and G&A synergies associated with a larger core operating area. These assets are similar to the Stronghold assets acquired last year, having stacked pay zones of high-quality rock with proven performance. Like the Stronghold assets, we intend to leverage our extensive expertise in applying the newest conventional and unconventional technologies to optimally develop the inventory of undeveloped drilling locations afforded by the Transaction.”
Ring Energy has been on an acquisition spree to strengthen its hold and prospects in the lucrative oil and gas business. On July 11, 2023, the company entered into an agreement to acquire Founders Oil & Gas IV assets for $75 million in cash. The acquisition further strengthens its foothold in the Permian Basin.
With the acquisition, Ring Energy hopes to capture cost synergies, enhancing its operational efficiency. The acquisition, expected to close by September 30, 2023, should be accretive and benefit the company and shareholders.
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