Plasma gasification involves heating waste products and other materials to extremely high temperatures using a constant flow of electricity. According to TopBits.com, this “maintains a field of extremely intense energy powerful enough to disintegrate the shredded garbage into its component elements. The byproducts are a glass-like substance used as raw materials for high-strength asphalt or household tiles and ‘syngas,’” a mixture of hydrogen and carbon monoxide that can be converted into hydrogen, natural gas, ethanol, or other fuels.

Alter NRG (TSX: NRG; OTCQX: ANRGF), a Canada-based provider of clean alternative energy, is one of the key players in the market for plasma gasification technology and is focused on its large-scale commercialization.  It operates primarily through a subsidiary, Westinghouse Plasma Corp, an industry leader in plasma gasification technology since 2002.  Westinghouse, acquired by Alter NRG in 2007, provides clean and renewable energy solutions from municipal solid waste (MSW) and biomass and converts it into syngas, electricity, or ethanol.

As of the most recent quarter (1QFY10), non-food biomass converted into clean, pressurized syngas is now flowing from Westinghouse’s plasma gasification plant in Madison, Penn., which provides syngas to an adjacent semi-commercial ethanol conversion facility operated by Coskata, Inc.  Westinghouse has also entered into agreements to provide an estimated $50 million in engineering services and equipment for Coskata’s first (fully) commercial ethanol facility, Project Flagship.

In its results for the first quarter of fiscal 2010, Alter NRG announced that it has 20 projects worldwide that are in the engineering phase of development, with a total sales pipeline of over $500 million upon successful development. According to the Company, a total of 45 proposed projects are in progress globally using Westinghouse plasma technology.

Plasma gasification of municipal solid waste is only beginning to gain recognition as a viable, large-scale energy source primarily because until recently, despite its benefits to the environment, it was less expensive to pay the “tipping fees” and other costs to dump waste in landfills than to process it using plasma gasification.  As the technology has become more cost-efficient and landfill space has become scarcer, though, gasification has achieved what might be referred to as “landfill parity,” and in many areas it has become the more economical of the two alternatives. As the public begins to appreciate the growing economic as well as environmental benefits of this revolutionary technology, companies like Alter NRG will be the first to benefit from changes in the way we think about waste management, energy generation, and environmental stewardship.

Disclosure: The subject security is a client of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.

But what if we could stay warm without relying so much on our electric and gas companies and better yet, what if the solution was accessible almost anywhere?

As it turns out, the ability to heat buildings and homes using the earth’s own natural heat source has been around for over 50 years. It’s called geothermal technology and it’s one of the most basic forms of reusable energy. Now geothermal technology is grabbing the headlines as Congress and the President consider imposing mandates on renewable energy use and global leaders return from climate talks in Copenhagen.

One company joining the renewable energy discussion is Alter NRG (OTCQX: ANRGF; TSX: NRG), an emerging clean, alternative energy company which recently acquired Clean Energy Developments Corp., an award winning and leading integrator of products for geoexchange products to the commercial and residential building industry.

Geoexchange uses energy, in the form of heat, stored 10 to 15 feet under the Earth’s surface. The Sun’s energy heats up the surface of the earth as well as underneath. At depths of 10 to 15 feet under the surface, temperatures remain stable year-round due to insulation from the layers of rock and dirt. During the winter it is warmer than the above ground temperature and during summer it is cooler. The geothermal heat pump transfers heat stored in the ground into buildings or houses during the winter and transfers it back into the ground during the summer. These pumps can be used for space heating and cooling and also water heating.

Geoexchange facts:

• A geoexchange system can reduce energy consumption and corresponding emissions by more than 40% compared to air source heat pumps and by over 70% compared to electric resistance heating with standard air-conditioning equipment.
• Just one geoexchange system installed in an average home is the equivalent of planting 750 trees.
• Each geoexchange system represents a savings to homeowners of 30% to 70% when heating and 20% to 50% when cooling.
• Since the geothermal pump is using a reusable energy source and decreasing the need of fossil fuels, the consumer is reducing their carbon footprint while lowering operating costs.
• A geoexchange system has a typical payback period of 5 to 6 years for larger installs.

So what does a plasma gasification company like Alter NRG want with a Geoexchange company? Well, with the acquisition of Clean Energy Developments Corp., Alter NRG looks to enter into the fast growing Canadian geoexchange market. According to Ted Kantrowitz, VP of the Canadian GeoExchange Coalition, early reports indicate that the geoexchange industry is growing between 40% and 260% depending on the region.

Clean Energy hasn’t been able to take full advantage of this sleeping giant due to poor capitalization for the past few years. However, Alter NRG’s strong balance sheet, with over $30 million in cash reserves, will allow them to take full advantage of Clean Energy’s potential and compete on larger projects throughout the highly fragmented Canadian market. This acquisition fits perfectly with Alter NRG’s vision of “Commercializing growth technologies through developing environmentally sustainable and economically viable alternative energy projects.”

Alter NRG believes it can become the market leader in turnkey geoexchange systems and will be able to generate over $100 million in sales per year from this segment within the next 3 to 5 years, which would represent an earth shattering 1,963% growth in revenue over FY08 revenue of $4.8 million.

Now that’s a growth strategy I can warm up to.

Alter NRG Corporation (TSX: NRG; OTCQX: ANRGF)

Alter NRG owns a proprietary plasma-based gasification technology developed by its wholly owned subsidiary, Westinghouse Plasma Corporation (WPC), for converting various feedstocks into commercial syngas. (The process can even convert waste to energy, providing an alternative to landfills.) In many cases, the syngas can be produced at a lower operating cost of $2 to $4 per MMBtu, net of by-product revenues, and provides a fixed cost of energy in volatile commodity markets.

During the second quarter, Alter NRG substantially completed the construction of Project Lighthouse, a commercial demonstration facility developed by Coskata Inc. (Coskata) that uses the Westinghouse Plasma Corporation (WPC) gasification solution to turn biomass into ethanol. The 40,000 gallon-per-year cellulosic ethanol facility will begin operation in the third quarter 2009 and represents a significant milestone in the development of cellulosic ethanol from non-food feedstocks. This commercial demonstration will increase the utilization rate of the WPC gasification facility and is anticipated to provide approximately $3 million in revenue to the Company during 2009.

Coskata, a developer of next generation biofuels, has partnered with General Motors, who will use the next-generation ethanol produced at the demonstration facility at their Milford Proving Grounds to run in their E85 capable fleet of vehicles.

Other activities reported by Alter NRG for the second quarter include:

Announced the signing of an alliance agreement with Uhde Engineering Consulting (Shanghai) Co. to provide engineering services, marketing services and jointly pursue business opportunities predominantly in the Asia Pacific region, including China. This alliance agreement provides Alter NRG presence on the ground in China and Southeast Asia through a well respected and capable engineering firm.

Travelled to China to follow up on interest generated from the initial visit in Q1 of this year. Alter NRG is currently advancing discussions with numerous large, credible Chinese companies and advancing a signed memorandum of understanding into a definitive agreement. The interest in China and Southeast Asia for the Westinghouse technology has been significant and the central government has aggressive plans to utilize renewable energy solutions.

Continued the commissioning of the world’s largest hazardous waste-to-energy (WTE) facility in Pune, India. The facility is working through commissioning and expects to be operational in late Q3 or Q4 of this year.

Advanced discussions in the European market with sizeable companies, respected engineering firms and governments that are looking for renewable energy alternatives. This has resulted in advancing submissions into several WTE projects in the UK and EU, being shortlisted for plasma projects in advanced stages of regulatory approval and also advancing project developments with strategic partners in the area. The European market has very favorable incentives and regulatory framework.

Advanced commercial discussions for a 75 tonne per day WTE project located in Dufferin County, Ontario. Alter NRG submitted into a request for proposal process and was selected as the technology provider.

Alter NRG continues to advance discussions with industry-leading engineering companies, well-capitalized energy companies and project developers who have interest in the Westinghouse technology. According to the Gasification Technologies Council, worldwide gasification capacity is projected to grow 70 percent by 2015. With their strong Westinghouse brand and commercially proven technology, Alter NRG is well-positioned to capitalize on the growing demand for clean energy solutions.

Disclosure:  Alter NRG Corporation is a client of RedChip Companies, Inc.  RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.

Under terms of the license agreement, Uhde will license, market and promote the Alter NRG technology in waste-to-energy (WtE) projects and other developments. The alliance agreement includes a preferred engineering relationship for engineering and procurement support for the projects requiring the syngas conditioning and gasification expertise that Uhde Shanghai and Alter NRG, respectively, can provide their customers.

This latest alignment demonstrates Alter NRG’s commitment to capitalizing on the Chinese waste-to-energy market –- a vast market valued at $19.9 billion in 2008 which is projected to reach more than $25 billion over the next five years. With a modernizing population of 1.3 billion, China is the world’s largest solid-waste producer and is quickly becoming the world’s largest energy consumer.

China’s waste and energy needs offer a huge market opportunity for WtE companies, and the country is ready to invest. This year, approximately 5 percent of China’s $586 billion economic stimulus package will go toward “sustainable environment” projects with another 9 percent allocated for “technology advances,” which are expected to include initiatives for clean technologies. With Westinghouse’s clean and proven plasma gasification technology (already in use at plants in India and Japan), Alter NRG is poised to capitalize on the Chinese energy market.

Alter NRG’s plasma gasification technology, originally developed by their wholly owned subsidiary, Westinghouse Plasma Corporation, produces valuable and clean syngas from a multitude of cheap and abundant feedstocks. Converting waste into electricity is the most common application of plasma gasification technologies, which can provide renewable and clean energy solutions from a wide variety of feedstocks and provide a wide variety of energy outputs –- including hydrogen, liquid fuels like diesel, and ethanol, and syngas. Syngas is a gas mixture containing varying amounts of carbon monoxide and hydrogen and is a form of synthetic natural gas with many applications, including use as an intermediate in producing synthetic petroleum for fuel or lubricants.

Plasma gasification technology can also being used to retrofit existing coal-fired power plants to gasify coal and biomass, helping to reduce greenhouse gas emissions. In April 2007, Alter NRG entered an agreement with one of the largest power companies in the U.S. — NRG Energy — to retrofit the coal-fired power station at Somerset, Massachusetts, to use the Westinghouse Plasma proprietary gasification technology to produce syngas. Alter NRG will look to partner with other industry-leading companies to pursue additional opportunities for its coal retrofit solution including in China, which has a number of non-scrubbed coal-fired plants.

In other news, Alter NRG released their 1Q09 results. The Company has increased plasma technology sales and service revenue for the quarter to $1.1 million from $0.7 million in the first quarter of 2008, a 57% increase. The current sales are primarily for engineering services to advance commercial projects with technology equipment sale generally ranging from $10 million to $50 million upon successful development. However, there is certainly more on the horizon for the alternative energy company. 

As the world moves towards clean, renewable energies, companies like Alter NRG, who are paving the way by developing the new technologies required, are poised for prominence.

To access RedChip’s full research report on Alter NRG or to view an interview with Alter NRG’s CEO Mark Montemurro, visit their profile page at www.RedChip.com.

Alter NRG owns Westinghouse Plasma Corporation (WPC) and its proprietary plasma gasification technology; which can gasify coal, biomass, petroleum coke, and almost any other material waste (household or industrial) to derive hydrogen and carbon monoxide, which can then be converted into high-value diesel, ethanol, hydrogen and steam. The technology has been used commercially in Japan for more than five years and is the only plasma gasification technology in the world that has been used on a commercial scale for the gasification of municipal solid waste (MSW).

You read that correctly:  Alter NRG has been successfully converting solid waste into energy. Municipal solid waste can range from composite waste (clothing, waste plastics such as toys) to domestic hazardous waste (pesticides, old paint); but the category used for fuel production is biodegradable waste such as food, kitchen waste, and paper. The process can reduce harmful emissions by 60% to 95%. Around 80% of the energy input is transformed into reusable energy and only 2% to 5% is used by torches during the process.

Project-wise, the company has remained extremely busy having advanced 12 projects into the engineering stage. These opportunities are located worldwide with nine in the United States, one in Europe and two in Southeast Asia. Alter NRG is working with Fortune 500 company, NRG Energy, Inc., on a Somerset, Massachusetts coal power plant retrofit, which is the first commercial-scale plasma gasification project to obtain regulatory approval in North America. Additionally, Alter NRG announced Canada’s first coal-to-liquids project and issued public filings including the Fox Creek Public Disclosure Document and Terms of Reference. The project will gasify Alter NRG’s coal reserve, which contains enough coal to produce 40,000 barrels per day of diesel and naphtha for 50 years.

Alter NRG trades on the Toronto Stock Exchange (TSX) and recently began trading on the OTCQX marketplace, the premier tier of the U.S. over-the-counter market. Last year, the Canadian alternative energy company saw continued growth and an expansion of assets, including a bought-deal financing of $46 million and graduation from the TSX Venture Exchange (a public venture capital marketplace for emerging companies) to the TSX Exchange, which handles more well-established equities.

With its commercially proven plasma technology, the Westinghouse brand, and a strong customer base — (the company has hundreds of proposed projects by developers and international opportunities and alliances with industry leaders) — Alter NRG is well-positioned for growth. For the full year 2008, Alter NRG’s revenue, interest and other income grew 87% to $4.8 million, up from $2.6 million in 2007.

To view the executive interview and company presentation made by Alter NRG at the RedChip Investor Conference in San Francisco (March 24, 2009), visit http://www.redchip.com/visibility/investor.asp?symbol=ANRGF.