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Capstone Turbine (CPST) and the Renewable Future


The alphaDIRECT Insight

A combination of increased corporate focus on ESG (Environmental, Social and Governance) principals, government policies, regulations and better economics are creating strong tailwinds for the broader renewable energy sectors. This plays very well into Capstone’s core product offerings, in our view, as they are able to effectively and economically supply power while reducing both NOx and CO2 for its customers. Based on Capstone’s analysis, the Company has a global installed power base that has managed to lower CO2 emission to the tune of approximately 350,000 tons in FY19, while simultaneously generating financials savings of approximately $253 million dollars for its customers.  We believe Capstone’s energy systems are highly complementary to these broader megatrends and actively support the EPA’s Natural Gas STAR program focused on reducing methane emissions within our domestic oil and gas operations while also supporting energy efficiency initiatives through CHP and the Department of Energy’s regional CHP Technical Assistance Partnership. It is also noteworthy that Capstone’s products can run on biogas or renewable natural gas, which we believe is a growing component in the market and can enable customers to generate power with essentially a net-zero carbon footprint.

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Shawn Severson: First, I would like to thank you, Jim, for taking the time to speak with alphaDIRECT again today. Last time we spoke, we discussed the microgrid opportunity and drivers and how this sector is impacting Capstone. Today’s focus will be on Capstone’s renewable future. A couple of weeks ago, there was a climate strike march in New York City that received worldwide attention. Can you start by talking a bit about the imminent change in global energy and the global change in the energy market, and also how people’s attitudes are changing?

Jim Crouse: Climate change and renewable energy are in our daily news cycles, and for good reason as energy production and its environmental impacts are important topics both locally and globally. While the path to a 100% renewable future will be debated for many years to come, it is a fact that governmental policy and regulations are going to continue to drive toward renewable and decarbonization of all energy consumption. This drive is partly the result of rapidly changing attitudes around the world–for example, a recent UK study showed that 84% of people support or strongly support the use of renewable energy to provide electricity, fuel and heat. As a result, governments at all levels, from countries to cities, are setting targets or goals for carbon reduction. This drive now also includes companies large and small, with some adding dedicated employees or teams of employees focused on finding ways to achieve these goals. People are looking for products and services that can cost-effectively help meet these targets and goals in the timelines that have been established.