Chairman's Report
It takes years of planning to develop successful companies, particularly those investing in new frontiers.
I am pleased to report that Wasabi is now well placed to participate in what your directors expect to be major changes in energy markets, locally and globally, over the next few years. We expect these changes to be driven by concerns about carbon emissions and their effect on global warming of the atmosphere.
Wasabi has taken strategic positions in a number of innovative energy projects and companies that will realise their full potential as governments impose measures to limit carbon emissions and to increase the use of cleaner and renewable fuel sources for power generation and transport.
The most advanced of these projects is the Kalina Power Cycle. Wasabi has worked on and invested heavily in the Kalina Cycle for many years and it is now on the verge of commercialisation.
Wasabi has increased its ownership in Global Geothermal, the company which holds the intellectual property rights to the Kalina Cycle, to 96% and now has the incentive to ensure the process is made widely available.
The Kalina Cycle can deliver up to a 50% improvement in power generating efficiency over traditional methods and is particularly well suited to generating power from industrial process heat, and from geothermal sources.
One new plant utilising the Kalina Cycle was commissioned during the year in Germany bringing the number of such plants to four in Japan, Germany and Iceland. Three of the plants utilise process heat and the fourth relies on a geothermal heat source.
The major development recently has been Global’s licensing agreement with Shanghai Shenge New Energy Resources Science and Technology (SSNE) of China. Under the agreement, Global has been paid a licensing fee and will receive royalties based on the power generating capacity that SSNE installs in the future.
We expect this to lead to multiple applications of the Kalina Cycle in China, furthering its global acceptance as the preferred process for generating electricity from industrial waste heat.
We also expect global demand for the Kalina Cycle to increase as the cost of emitting carbon is priced into processing costs as governments introduce new regimes to govern power generation and its uses.
Wasabi has taken a broad view of the way energy markets might develop in the future and has thus taken positions in waste heat producers, geothermal power and uranium exploration companies as well as a strategic 25% stake in Australian Renewable Fuels, a company that owns two refineries in Australia with an installed annual production capacity of 90 million litres of biodiesel. With this investment we are acquiring a complete understanding of this important and growing area of the renewable fuel market.
The other project in which Wasabi has invested is a water company, AquaGuardian Group (AGG). AGG’s first product is AquaArmour, a plastic module developed and designed to greatly reduce water losses caused by sun and wind evaporation. It is suitable for deployment on large water storage reservoirs and dams and is in the early stages of commercialisation.
The importance of water conservation has been emphasised by the continuing drought in south eastern Australia and earlier problems in the north when city and town water storages proved inadequate to supply normal urban demands. It is expected the water market will also undergo considerable change in the years ahead.
AquaArmour has application in other countries as well and AGG is engaged in discussions with plastics manufacturers and distributors to license AquaArmour outside of Australia.
Wasabi’s investments and projects are outlined in more detail in the Directors’ Report in the 2009 Annual Report. I recommend that you read it.
John Byrne
Executive Chairman
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